The Biden administration announced on Thursday, Aug. 19, that it would cancel federal student loan debt for more than 323,000 borrowers with permanent disabilities.
New York Post citing an announcement from the Department of Education, reported that those with total and permanent disabilities would receive more than $5.8 billion in automatic student loan discharges from this debt cancellation, which is the single largest forgiveness of debt in Biden’s presidency.
“Today’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,” said Secretary of Education Miguel Cardona.
Cardona said that the Department of Education, as a service agency, should serve students, educators, and families across the country to ensure that educational opportunity is available to all people.
“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,” he added.
The secretary said that his department would continue to stop asking disabled borrowers for information on their earnings to qualify for loan cancellation even after the COVID-19 pandemic.
The department said the debt cancellations would occur automatically for disabled borrowers identified through administrative data, ending a lengthy application process previously required for loan forgiveness.
Earlier this month, the Education Department announced that it would extend its pause on student loan payments until January 2022.
The department said that it will be its “final extension of the pause on student loan repayment, interest, and collections,” and that it is a necessary move to allow borrowers more time to plan to begin repayments to avoid defaults and delinquency.
With the new action, the Biden-Harris administration has so far approved approximately $8.7 billion in student loan discharges for roughly 455,000 borrowers.