Biden administration automatically erasing student debt for borrowers with severe disabilities

The Biden administration will automatically wipe out federal student loan debt for borrowers who have a total and permanent disability, as it has done for veterans with a severe disability, meaning more than 323,000 borrowers who receive more than $5.8 billion in automatic student loan discharges. 

The federal government currently allows for the elimination of federal student loan repayments for those identified as having a total and permanent disability, but the Education Department's new rule would nix application paperwork and make the debt elimination automatic for borrowers who are already identified as having a total and permanent disability through the Social Security Administration. The Education Department also says it will try to eliminate the three-year monitoring period in which borrowers' debt could be reinstated if they do not respond to requests for income information.  "Today's action removes a major barrier that prevented far too many borrowers with disabilities from receiving the total and permanent disability discharges they are entitled to under the law," Cardona said in a statement Friday. "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. This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support."