On 12 April 2016, the U.S. Department of Education announced that hundreds of thousands of borrowers who are permanently disabled could have an estimated $7.7 billion in student loans forgiven:
The U.S. Department of Education announced today a new process to proactively identify and assist federal student loan borrowers with disabilities who may be eligible for Total and Permanent Disability (TPD) loan discharge. This effort was called for by President Obama in his Student Aid Bill of Rights, which details measures to make paying for higher education an easier and fairer experience for millions of Americans. The Higher Education Act allows for loan forgiveness for borrowers who are totally and permanently disabled. By proactively identifying and engaging borrowers who may be eligible for TPD loan discharge, the Department is fulfilling its commitment to ensure that borrowers who are totally and permanently disabled have the information needed to take full advantage of the debt relief to which they are entitled.
“In 2012, the Administration took steps to streamline the process to allow for Americans who are totally and permanently disabled to use their Social Security designation to apply to have their loans discharged. But too many eligible borrowers were falling through the cracks, unaware they were eligible for relief. Borrowers like one such woman whose side effects from her breast cancer treatment left her totally and permanently disabled. After repeated attempts, she finally received a disability discharge—seven years after her first application,” said U.S. Education Under Secretary Ted Mitchell. “Under the new process, we will notify potentially eligible borrowers about the benefit and guide them through steps needed to discharge their loans, helping thousands of borrowers. Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due.”
As part of President Obama’s Student Aid Bill of Rights — a move to help relieve Americans of crushing student loan debt — the Department of Education will be sending letters to 387,000 people who have been identified as eligible for a “Total and Permanent Disability” (TPD) loan discharge because they are disabled and cannot work. The Department of Education and Social Security Administration are working together to identify borrowers who have been receiving disability payments and are eligible to have their loans discharged.
Those borrowers will be able to bypass the traditional disability discharge process, which requires them to furnish proof of their disability. Instead, these disabled borrowers will be able to simply fill out and sign the application sent to them in the letter they receive from the Department of Education.