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2.5. Disability and Student Debt Relief Program

Students with Disabilities debt-relief Program
If you’re totally and permanently disabled, you may qualify for a discharge of your federal student
loans and/or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.

Bureaucracy Jams Up Student Debt Relief for Disabled Borrowers

Recently announced student debt forgiveness for ‘totally and permanently disabled’ people leaves many at the mercy of a bureaucratic and somewhat random process.

On August 19, the U.S. Department of Education announced that it will automatically wipe out $5.8 billion in student debt for some borrowers with disabilities, removing a hurdle in the bureaucratic obstacle course that keeps Americans from accessing resources they’re owed. People who are “totally and permanently disabled” have been able to apply for loan discharge for decades. But the program is underused, since current rules make people undergo a three-year monitoring period to prove that they are poor. Approved beneficiaries have been bounced for failing to supply regular proof of low earnings. Others are deterred from applying altogether by the complicated rules.

The idea behind the new relief is simple: If you develop a work-limiting disability after taking on student loans, that debt should be automatically canceled. “This is going to be a smooth process for our borrowers,” Education Secretary Miguel Cardona said in a press call on the changes. “They’re not going to have to be applying for it or getting bogged down by paperwork.” But the automatic relief was confined to a small subgroup, leaving most disabled Americans still stuck in the bureaucratic morass. And even within the qualifying group, the long-delayed benefit may not reach all members.