Student Loan Debt Concept Photo: Getty Images

US cancels $5.8bn in student loans for disabled borrowers September

*The United States Education Department discloses it will start discharging the debt of over 300,000 borrowers who are unable to maintain gainful employment due to a permanent physical or psychological medical impairment from September 2021

Alexander Davis | ConsumerConnect

In a move to ensure that quality educational opportunity is made available for all in the country, the United States (US) Education Department has announced that it will begin automatic cancelling of the student loans of more 323,000 severely disabled borrowers.

ConsumerConnect gathered the Education Department in a statement Thursday, August 19, 2021, said it would start discharging the debt of borrowers who are unable to maintain gainful employment due to a permanent physical or psychological medical impairment. The action will take effect starting in September.

United States President Joe Biden

US Secretary of Education Miguel Cardona said: “Today’s (Thursday’s) action removes a major barrier that prevented far too many borrowers with disabilities from receiving the total and permanent disability discharges they are entitled to under the law.

“From day one, I’ve stressed that the Department of Education is a service agency.

“We serve students, educators, and families across the country to ensure that educational opportunity is available to all.”

Referencing certain initial burdensome rules, the Department further stated that the action is being carried out through the Total and Permanent Disability (TPD) discharge programme of the government.

While the move is intended to help many struggling borrowers, critics have argued that potential beneficiaries may face challenges in submitting a formal application.

Some may even be unaware that they qualify, they suggested.

Cardona further said: “We’ve heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it. “This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support.”

The education agency noted that over $5.8 billion in student debt will be wiped out as a result of the move.

The changes introduced will go into effect starting in September, and all of the loans are expected to be discharged by the end of the year, said the Department.

Kindly Share This Story