[Blindtlk] [Nfbv-fairfax] Obama to forgive the student debt of permanently disabled people - The Washington Post

[John Bailey via NFBV-Fairfax]

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https://www.washingtonpost.com/news/grade-point/wp/2016/04/12/obama-to-forgive-the-student-debt-of-permanently-disabled-people/



Obama to forgive the student debt of permanently disabled people

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(istock)

The Obama administration plans to forgive $7.7 
billion in federal student loans held by nearly 
400,000 permanently disabled Americans.

By law, anyone with a severe disability is 
eligible to have the government discharge their 
federal student loans. The administration took 
steps four years ago to make the process easier 
by letting people who are totally and permanently 
disabled use their Social Security designation to 
apply for a discharge, but few took advantage. 
The Department of Education is now taking it upon 
itself to identify eligible borrowers and guide 
them through the steps to discharge their loans.

“Too many eligible borrowers were falling 
through the cracks, unaware they were eligible 
for relief,” said Education Under Secretary Ted 
Mitchell in a statement. “Americans with 
disabilities have a right to student loan relief. 
And we need to make it easier, not harder, for 
them to receive the benefits they are due.”

[Sidelined by disability and saddled with student loans]

Working with the Social Security Administration, 
the department has been identifying borrowers 
receiving disability payments and have the 
specific designation of “Medical Improvement 
Not Expected,” which indicates they are 
eligible for the discharge. The agencies found 
387,000 matches in its first review. About 
179,000 of those people are currently in default 
on their loans, putting them at risk of losing 
their tax refunds and having their Social Security benefits garnished.

“The creation of the matching program is a 
great first step, but the administration needs to 
go further to ensure that no borrower who has a 
right to student loan relief has their benefits 
taken,” said Persis Yu, the National Consumer 
Law Center’s student loan borrower assistance 
project director. “Borrowers receiving SSDI 
need these payments to survive.”

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Starting next week, borrowers identified in the 
match will receive a letter from the government 
explaining the steps needed to receive a 
discharge. They will not be required to submit 
documentation of their eligibility, unlike 
disabled borrowers who apply for the discharge on 
their own. Notification letters will be sent over 
a 16-week period, and followed up with a second letter after 120 days.

The letters will inform borrowers of the tax 
implication of the discharge, since the 
government has the right to tax the amount of money forgiven.

[Obama plans to make it easier to pay your student loans]


Rising student debt looms over parents and children

Play Video2:52

Many middle class families borrow to build their 
careers and send their children to college, and 
now struggle to pay back growing student loan 
debt. A new AP analysis shows it's a rising multi-generational problem. (AP)

Tuesday’s announcement is an outgrowth of 
President Obama’s Student Aid Bill of Rights, 
which directed federal agencies to overhaul the 
way Americans repay student loans.


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