Education Department Automates Discharges for Borrowers With Disabilities Following Student Defense Rulemaking Petition and Calls for Action

FOR IMMEDIATE RELEASE:
August 19, 2021

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Education Department Automates Discharges for Borrowers With Disabilities Following Student Defense Rulemaking Petition and Calls for Action 

WASHINGTON, DC – The Department of Education announced today that it will automate student loan discharges for borrowers with disabilities who are legally entitled to, but have not yet received relief. These borrowers have long been deemed eligible for the discharge by the Department of Education, through a matching process with the Social Security Administration, but, until today’s announcement, have not been afforded the relief to which they were legally entitled.

On April 19, 2021, Student Defense, Justice in Aging, and the Community Legal Aid Society, Inc. of Delaware submitted a Section 553(e) Rulemaking Petition calling on the Department to automatically discharge debt for these eligible students.

Student Defense Vice President and Chief Counsel Dan Zibel issued the following statement:

“This is a life-altering announcement for hundreds of thousands of student loan borrowers with disabilities. We have long been calling on the Department to take this step and eliminate unnecessary red tape that has kept too many people caught in a cycle of debt. Today’s step is another indication that the Department is listening to the voices of student loan borrowers.”

Under the Higher Education Act, student loan borrowers who are “totally and permanently” disabled are entitled to a complete discharge of their federal student loans. Under current practices, even after the SSA determines that an individual is entitled to such discharge, the Department still requires that individual to separately apply for relief.

According to data the Department recently released to Student Defense, as of May 2021 over 517,000 individuals had not received the relief to which they are legally entitled. The Department announced today that only 323,000 of those borrowers will receive automatic TPD discharges. Student Defense calls on the Department to provide automatic discharges to all borrowers who are entitled to them.

The Department of Education even used the Treasury offset process to take over $20 million from over 20,740 SSA beneficiaries determined to be entitled to TPD discharges.

Last year, as part of its 100 Day Docket project, Student Defense released an Action Memorandum describing how the Department of Education can automate and accelerate TPD relief. Former U.S. Senator Tom Harkin and Student Defense President Aaron Ament also called on the Biden Administration to automate the process in a January 2021 Des Moines Register OpEd.

In June, Student Defense joined 17 organizations led by the National Consumer Law Center in sending a letter to the Department again calling for the automatic discharge of this debt.
  

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Student Defense is a non-partisan, non-profit 501(c)(3) organization that works, through litigation and advocacy, to advance students’ rights to educational opportunity and to ensure that higher education provides a launching point for economic mobility.