Debt relief is on the horizon for over 300,000 in student debt and on disability, according to an August 19, 2021, announcement by the Department of Education.
The DoE announced that federally-backed student debt will be canceled, not reduced or adjusted but canceled, for all borrowers on total and permanent disability. That’s already data the Social Security Administration has, so there won’t even be additional paperwork.
The debt forgiveness will encompass nearly $6 billion out of the current $1.57 trillion in outstanding student debt in the United States, or just under 0.4 percent of the total. It will affect 320,000 of the 42 million Americans who carry student debt.
“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,” said U.S. Secretary of Education Miguel Cardona.
This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support.
Student loan relief was a keystone of President Biden’s campaign platform, after four years of struggle between Betsy DeVos’s Trump-era DoE and a series of legal rulings about predatory student loans.
The discussion is still on the table for a Presidential executive action which would cancel up to $50,000 in student debt per borrower across the board, regardless of disability, income, or earning potential. The DoE and the Department of Justice have the matter currently under review.
Over half of all students today take on student debt to attend college, most of them through federal student loans. Especially in light of the recent pandemic and the economic struggles related to it, over a quarter of those who take student loans (many taking on that debt at 17-18 years old) will default on them within 15 years due to economic hardship. Debt relief and tuition reform are vital to bring America back up to the educational standards of the rest of the developed world without indenturing our people to do so.