This month, September 2021, more than 300,000 student loan borrowers with disabilities will begin to have their loans discharged by the Department of Education (DOE), thanks to new regulations announced by Education Secretary Miguel Cardona in August.
The decision will eliminate upwards of $5.8 billion dollars in debt and implement key reforms to the total and permanent disability discharge program (TPD), reforms that the Reeve Foundation and other organizations have been advocating to change, that will make it easier for eligible borrowers to enroll in this program and stay enrolled.
The Higher Education Act of 1965 created the TPD discharge program, which allows student loan borrowers with a total or permanent disability, preventing them from engaging “in any substantial gainful activity” to have their federal loans forgiven. However, the program has not been achieving its goals or reaching its target community.
While the Department of Education has had a regular data matching and enrollment agreement with the Department of Veterans Affairs, all other qualifying borrowers were responsible for proactively submitting an application and collecting supporting documents, like a physician’s letter, to prove their disability. This has proven overly burdensome and created a needless barrier between the program and the people it is meant to serve.
Additionally, a three-year financial monitoring requirement added more bureaucracy, and led to the cancelation of discharge benefits for eligible borrowers due to filing delays. These bureaucratic rabbit holes meant that roughly 200,000 people, otherwise eligible for loan discharge, would pay almost $6 billion in a 12-month period, according to a Social Security Administration Inspector General report.
In April, the Christopher & Dana Reeve Foundation joined 16 other disability rights groups in a letter to Secretary Cardona and Social Security Administrator Andrew Saul, requesting the Department of Education reform these unnecessary provisions that have made it difficult for those who need the program most to gain access. We asked the Department of Education to match data with the Social Security Administration, as they do with the Department of Veterans Affairs, to automatically enroll eligible borrowers into TPD, as well as eliminate the 3-year financial monitoring requirement all together.
We are so pleased to report that is exactly what the Department intends to do.
“This new regulation allows the Department to provide automatic TPD discharges for borrowers who are identified through administrative data matching by removing the requirement for these borrowers to fill out an application before receiving relief,” the Department of Education said in a statement.
This does not mean that the Department is eliminating the TPD discharge application all together. Individuals who are not receiving benefits from the Veterans Affairs or Social Security, and may not be identified for automatic enrollment, are still able to apply using a physician’s letter. Anyone with questions one what option applies to them should contact the Department of Education.
The Department of Education and the Social Security Administration conduct quarterly data matches. The next one is scheduled for September 2021. Individuals who match the data set will be automatically enrolled into the TPD program.
“Borrowers will receive notices of their approval for a discharge in the weeks after the match, and the Department expects that all discharges will occur by the end of the year."
