Biden Cancels $7 Billion in Federal Student Loans for Disabled Students Through Data-Sharing Program

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On the heels of President Joe Biden officially extending the student loan payment moratorium until August 31 — claiming it “will help Americans breathe a little easier as we recover and rebuild a little from the pandemic — it seems he is also returning hundreds of thousands of disabled borrowers behind on loan payments to good standing.

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The Biden administration recently announced that it has cancelled $7 billion in federal student loan debt for some 350,000 borrowers with disabilities through a data-sharing initiative between the Social Security Administration (SSA) and the Education Department.

Through sharing information of individuals who were receiving benefits from the SSA, qualification for the Total and Permanent Disability (TPD) discharge program could be confirmed and student loans automatically cancelled.

TPD discharge is when your obligation to pay your William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loan (Perkins Loan) Program loans, and Teacher Education Assistance for College and Higher Education (TEACH) Grant Program service is discharged due to your total and permanent disability.

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In a tweet, Chief Operating Officer of Federal Student Aid (and undefeated five-time Jeopardy! champion) Richard Cordray wrote, “Working together with @SocialSecurity, Federal Student Aid has provided much-needed relief for 350,000 borrowers with approximately $7 billion in student loans.”

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In response to the COVID-19 pandemic, most federal student loans and their interest rates have been paused since March 2020. But after a series of federal student loan payment pauses and extensions by President Biden and former President Trump, advocates were calling for more than short-term solutions.

Although many Republicans and private lenders are lobbying for the president to reinstate federal student loan payments, Democrats and loan forgiveness supporters have been even more vocal in pressuring the president to extend payment obligations until the end of the year at least or abolish existing student loan balances altogether.

The Biden administration announced its intent to use this data-sharing initiative to streamline student loan relief for certain disabled borrowers in August 2021. It is believed that the Education Department will be issuing 15,000 to 20,000 TPD discharges every quarter through the initiative. In addition to the data-sharing initiative, Biden is also planning to suspend post-discharge monitoring of employment earnings and overhaul the TPD discharge program’s disability identification application process, according to Forbes.

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With approximately 43 million Americans holding student loans and the average borrower owing around $36,000, loan forgiveness would immediately boost the economic health of these individuals and help address racial and economic equity issues. While many are calling for a more comprehensive student loan program rebuild, recent TPD efforts are consistent with the Biden administration’s stated goal of providing “targeted” student loan forgiveness.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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