“Student Loan Forgiveness: Education Department discharges $5.8 billion for disabled borrowers” is the name of an article written and posted by a reported named Aarthi Swaminathan on Yahoo Finance on August 19, 2021. If you are wondering what the post is about, continue reading until the end.
The Education Department, which is also more popular as ED in short, is discharging a total of $5.8 billion in student debt that is held by more than 323,000 federal student loan borrowers. These students are all totally and permanently disabled. It is such a good thing for several advocates who tried their best to urge the Biden administration to make a move.
On the interview with the reporters, an Education Secretary named Miguel Cardona said that the move was in alignment with their strategies from day one to put their borrowers at the center of the conversation. He said that Educational Department is currently trying its best to make more improvements in this kind of targeted loan relief program, including Public Service Loan Forgiveness. Not only that, ED is also trying to find the best way to handle the massive backlog of borrower defense applications for debt relief.
A senior counsel named Alex Elson, who happens to be one of the groups that has been pushing Educational Department to forgive the loans, told Yahoo Finance at the national Student Legal Defense Network that the newest action was a life changing announcement for a dozens of people and it is the thing that has been demanded by them for a long time.
The amount of total student loan forgiveness for the total and permanent disability students enacted by the Biden administration is around $8.7 billion. According to the Education Department data and analysis from experts, federal actions in the current pandemic will lead to about $100 billion in total student loan forgiveness between March two years ago and September last year.
In fact, the wave of the student loan forgiveness has made the life of many people better, especially those roughly 45 million students who borrow more than $1.7 trillion. While these students and the families of these students feel relief, on the other hand, a few Democrats and a few experts are still trying to urge the Biden administration to cancel the student debt.
In a statement, a director of the National Consumer Law Center’s Student Loan Borrower Assistant Project named Persis Yu said to Yahoo Finance that the actions done by the Department will provide meaningful relief to hundreds of thousands of borrowers. He said that the action will take one step towards fixing a fundamentally broken system. However, he still thinks that it is not enough and more needs to be done. Apparently, millions of borrowers are still waiting for President Biden to fulfill his promise to provide widespread student loan cancelation.
Student loan forgiveness is clearly a life changing. In general, the ones who borrow federal loan with PTD are able to apply for debt relief through a process that was made by Congress in 1965, under the Obama administration. There is the Social Security Administration or SSA that will determine the eligibility of the borrowers.
It should be noted that these eligible borrowers would be subjected to a three year monitoring period if they opted in.
Since the beginning of the SSA collaboration, a total of 818,074 borrowers have been successfully identified as eligible for a TPD discharge and 300,405 were granted $8.8 billion. Unfortunately, the process stopped for the others 517,669 borrowers.
Apparently, the new regulation by Educational Department will apply to every borrower who is identified as eligible through the data that exist and match with the Social Security Administration. It is stated that the process will be automatic, meaning there will be no need for the borrowers to have to fill out an application if they want to get relief.
Miguel Cardona said that this process is going to be a smooth one for every borrower where they are not going to have to be applying for it or getting trapped with paperwork. He said that they recognize that these borrowers are eligible and they are trying their best to provide relief of $5.8 billion to them.
Besides, according to Educational Department note, the agency would also indefinitely extend the policy announced in March in order to stop asking these borrowers to reveal the number of their earnings. The department expects the borrowers who are affected to be notified of their approval of discharged in several weeks after the match in September and it expects that every single discharge will occur by the end of the year.
Apparently, there is discrepancy. According to the federal data that was released before, as of May 2021, there are more than 517,000 individuals that had not received the relief to which they are legally entitled. On the other hand, the latest announcement only covers 323,000 borrowers.
A senior advisor of Educational Department gave an explanation on a call that their understanding is that 517,000 is essentially the numbers that are accumulated over several quarterly matches done over multiple years. Furthermore, he said that as a result, there are some borrowers who may have applied. Besides, some of them may have applied or may have been double counted because they are essentially showing up in more than one match. Basically, 323,000 is the number of they think will get the discharge that is based after the last quarterly match they did in June, who had not yet applied. He said that those would be the most updating comprehensive numbers.
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