Federal government announces COVID-related help for disabled student loan borrowers, without relief advocated by advocates
Borrowers who have received a disability-related discharge of their federal student loans will not be forced to resume repayment during the COVID-19 pandemic, the Department of Education said on Monday – an action that falls short of expectations. aid advocates hoping the Biden administration will keep its promises. borrowers with disabilities.
The announcement will reach more than 230,000 borrowers, the agency said.
These borrowers had previously had their loans paid off through a process that allowed borrowers to debt erased in cases where they are totally and permanently disabled. To prevent their loans from being reinstated, these borrowers were required to submit annual documentation for three years confirming their income.
Now, these borrowers will not be subject to income tracking during the COVID-19 emergency, the ministry said. In addition, the more than 41,000 borrowers who already had $ 1.3 billion in loans reinstated during the pandemic will have their repayments reinstated and will be reimbursed for all the payments they made during the pandemic period.
“Borrowers with total and permanent disability should focus on their well-being, not putting their health on the line to submit income information during the COVID-19 emergency,” said Miguel Cardona, the secretary of the hospital. ‘Education, in a press release.
The announcement is the latest in a series of adjustments officials have made to the total and permanent disability leave program in recent years. Meanwhile, advocates have called on the ministry to revise the program, which is notoriously difficult to access for borrowers.
The fact that 41,000 disabled borrowers were repaid their loans during the pandemic is “shocking” and shows how difficult it is for these borrowers to access the relief to which they are entitled, said Persis Yu, director of the project. assistance to student borrowers at the National Center for Consumer Law.
“It’s not an ad, it’s a confession,” she said.
Yu added that the implication that the Department would reactivate the revenue monitoring requirement after the pandemic is “unacceptable.” A 2016 government accountability office report found that 98% of disabled borrowers who had their debts reinstated did not have too high an income to qualify, but rather it was because the borrowers had not submitted the documents.
“They are making people work far too hard for their relief and this action today is unfortunately not enough to solve any of these problems,” she said.
In the weeks leading up to President Joe Biden’s inauguration, many student loan advocacy groups turn up the pressure on inbound administration to provide relief to disabled borrowers. They identified debt relief from borrowers who the government said qualified for full and permanent disability discharge, but had not received it, as an action the administration could take at the start of its tenure. .
“Let’s be clear: today’s announcement is not a victory for students,” Alex Elson, senior counsel at the National Student Legal Defense Network, said in a statement. His organization has called on the Biden administration to write off the debt of borrowers who the government knows are eligible for full and permanent disability discharge in their first 100 days.
“There are approximately 400,000 disabled borrowers who, according to the Social Security Administration, are legally liable for debt relief. The Department of Education knows exactly who they are but chooses not to do anything for them, ”the statement read.
Elson added that his organization is exploring legal options to provide borrowers with disabilities the relief they deserve.
A senior ministry official said the agency may take further steps in the future to help borrowers with disabilities.
“We believe there are a host of improvements that could be made to this program and we are exploring the options we have to make those improvements,” the official said.
Although borrowers have the right to be paid off their debt if they have a physical or mental impairment that has lasted for five years, will last for more than five years, or will result in death, they are in fact released. can be difficult.
Borrowers usually have to apply to forgive debt and prosecutions and other evidence indicate that even in cases where borrowers tell a student loan company or debt collector that they are disabled, companies do not provide them with information about the release process.
The consequences of maintaining debt can be harsh for these borrowers. In 2015, the government seized the benefits of nearly 114,000 borrowers over the age of 50; of these, more than half were receiving social security disability benefits, not social security retirement benefits, according to a 2016 Government Accountability Office report.
In 2019, the Trump-era Department of Education started to cancel automatically the debt of borrowers identified as eligible by the Department of Veterans Affairs.
In 2016, under the Obama administration, the Department of Education and the Social Security Administration started an information sharing agreement, which enabled the Ministry to access lists of borrowers who would be eligible for relief based on their Social Security disability status. The agency sends letters to these borrowers informing them of their eligibility for the program, but letters are not enough for borrowers to actually access assistance.
As of November 2019, the Ministry had sent notices to 571,527 borrowers through this SSA data correspondence, according to the documents obtained by the National Student Legal Defense Network. But of those borrowers, 353,445, or about 60 percent, had not received the discharge to which they were entitled.
The department’s senior official said taking steps to allow borrowers who have been identified as eligible through matching Social Security data to have their debt discharged automatically “are under consideration.” They include a rule-making effort and changes to the data matching agreement with the Social Security administration, processes that “take time,” the official said.
“We continue to look for what else we can do here,” the official said.
The challenges faced by borrowers with disabilities in accessing relief are another indication of the need for widespread student debt cancellation, Yu said. The Biden administration has faced pressure from activists, advocates and Democratic Senators to write off tens of thousands of dollars in student debt per borrower.
“This is just another example of the system failing, it’s another example of the student loan system designed to relieve vulnerable borrowers and fail miserably,” Yu said. [relief] everyone, you know the people who need it will get it. ”