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DOE looking to helped disabled people discharge federal student loan debt

On Behalf of | Apr 15, 2016 | Social Security Disability, social security disability 1 | 0 comments

There is no question that one of the biggest financial burdens facing people of all ages is student loan debt. Indeed, most people see a substantial portion of their employment income go toward paying down their outstanding education loans on a monthly basis.

As challenging as it can be to manage student loan payments while employed, consider the reality for disabled individuals who cannot pursue any type of meaningful employment and are in constant danger of defaulting. 

The good news for individuals in these situations is that they have viable debt relief options at their disposal thanks to President Obama’s Student Aid Bill of Rights, which for the last four years has allowed individuals classified by the Social Security Administration as being totally and permanently disabled to use this designation to apply for a discharge of their federal student loans.

As wonderful an idea as this is, the reality is that very few people have actually taken advantage of it. Indeed, the Obama Administration recently directed the Department of Education to take more aggressive measures to change this reality.

To that end officials with the Department of Education have been working alongside officials from the Social Security Administration to identify those people receiving disability benefits who have been designated “Medical Improvement Not Expected,” meaning those individuals eligible for a discharge of their student loan debt.

To date, they have identified 387,000 people with $7.7 billion in student loans who fit this criteria, roughly 179,000 of whom are currently in default and could see their SSD benefits garnished.

Starting next Monday and over the course of the next 16 weeks, the Department of Education will mail letters to these 387,000 disabled student loan borrowers informing them of the simplified steps they can complete to receive a discharge. Follow-up letters will be mailed within 120 days.

Here’s hoping that people choose to take advantage of this tremendous opportunity.


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