U.S. to cancel student loans for those with permanent disabilities
The cancellation will affect approximately 320,000 borrowers, but there’s millions more waiting for more action.
On Thursday, Aug. 19, the Biden administration announced it will cancel student loans for over 320,000 borrowers who have a total and permanent disability (TPD) and limited income.
According to the Department of Education, the borrowers will receive more than $5.8 billion in automatic student loan discharges due to a new regulation.
Borrowers will automatically be identified through a unique system from the Social Security Administration (SSA).
The new policy will go into effect beginning September and the Department expects all loans will be waived by the end of the year.
Education Secretary Miguel Cardona said he fully supports the decision to end student loans for students with permanent disabilities and hopes to serve other individuals to help them advance into their professional careers.
"From day one, I've stressed that the Department of Education is a service agency. We serve students, educators, and families across the country to ensure that educational opportunity is available to all,” Cardona said in a press release. “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.”
Cardona also stated the cancellation will highlight the mandatory benefits provided to students with permanent health conditions.
"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," he said.
The Department of Education also announced it will extend a policy developed in mid-March to stop asking borrowers to provide information on their earnings beyond the end of the national emergency.
It is also ending a three-year monitoring program, which will begin in October.
Although the new policy is a step in the right direction against the student debt crisis, millions of other Americans are hoping they will have the same opportunities when it comes to canceling their student loans.
President Joe Biden has been faced with many criticisms over not erasing or reducing student loans amid the COVID-19 pandemic.
Biden is also feeling pressure from many of his colleagues, including Sen. Elizabeth Warren, who he faced in 2020 to take the Democratic nomination for president.
Sen. Warren and Senate Majority Leader Chuck Schumer, N.Y., have pressed Biden to end at least $50,000 in student loan debt from every borrower.
According to CNN, Warren led a group of more than 50 Democrats asking the President in a letter sent back in June to push back the restart date, warning it could "create a significant drag on our economic recovery."
Warren does believe that in order to jumpstart the economy, Biden must forgive an excessive amount of student loan debt.
However, in April 2021, Biden recently announced that he will extend his student loan forgiveness policy due to the ongoing Delta variant. The extension, which was supposed to cease on Sept. 30, will now stretch until Jan. 31, 2022.