Thursday, February 29, 2024

Certain Federal Student Loan Borrowers Will Have Debt Discharged

The U.S. Department of Education has announced that federal student loans will be discharged for 323,000 Americans (Photo by Tim Gouw on Unsplash)

NATIONWIDE — The U.S. Department of Education (DoE) has announced that over 323,000 federal student loan borrowers will have their debt discharged.

In an Aug. 19 press release, the DoE announced that borrowers who are considered to have a total and permanent disability (TPD) will automatically have their loans discharged, which will amount to more than $5.8 billion.

The borrowers have been identified through data matching through the Social Security Administration (SSA), beginning quarterly in September.

Additionally, these borrowers will not be asked for information regarding their earnings (an indefinite policy extension from March 2021) and the DoE is committed to pursuing eliminating a three-year monitoring period which is currently required under regulations. This last piece will be pursuant in October.

The current regulation data matches with the U.S. Department of Veterans Affairs (VA), but does not perform data matching through the SSA. The DoE notes that this only accounts for half of the borrowers eligible for TPD to receive the discharge.

Borrowers who are determined to be eligible will receive notice by the end of the year regarding their approvals for discharge under the new policy.

“We [the DoE] serve students, educators, and families across the country to ensure that educational opportunity is available to all,” said U.S. Secretary of Education Miguel Cardona. “We’ve heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it.”

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