On August 19, 2021, the United States Department of Education announced that they would be discharging outstanding student loans for borrowers with significant and permanent disabilities. This will also remove barriers for future borrowers who have or develop significant disabilities.
Benefits for Borrowers in the Billions
Estimates show this will benefit outstanding loans for more than 323,000 borrowers and erase up to $5.8 billion in debt. We consider it a significant step toward helping individuals with disabilities achieve financial stability.
The Forgiveness List
Our understanding is that the debt relief should be automatic for individuals who receive disability benefits via the Social Security Administration. The program began identifying individuals in June 2021, and more borrowers are expected to be identified in September 2021.
Exclusions and Applications
Please be aware that this program does not apply to all recipients of Social Security Disability or Supplemental Security Income benefits, just those who have been identified by the agency as belonging to a category where medical improvement is not expected (MINE). Other individuals may still get relief, but they need to apply and it’s not automatic.
Summary
- The U.S. Department of Education will forgive student loans for borrowers with disabilities.
- Discharged student loan debt will help those with disabilities gain financial stability.
- Forgiveness will also apply to future borrowers with disabilities.
- Recipients must qualify as “MINE”—medical improvement not expected.
