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Biden Forgiving Student Debt of Disabled People, Totaling $5.8 Billion

The administration is simplifying an existing program that allows totally disabled people to have student debt forgiven.

President Joe Biden gestures as he gives remarks in the White House on August 16, 2021.

The Biden administration announced Thursday that it is cancelling student debt for people who have been diagnosed with certain disabilities, affecting more than 323,000 borrowers. This latest slate of cancellations will wipe out more than $5.8 billion in debt, according to the administration.

“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,” said Education Miguel Cardona in a statement.

The Department of Education sought to make the student loan forgiveness process simpler for severely disabled borrowers.

The federal government has a program for disabled borrowers to have their loans forgiven, but the process is often cumbersome and has been widely criticized for its lack of accessibility. Currently, disabled people seeking debt forgiveness have to navigate documentation barriers and undergo three years of monitoring to ensure that their income does not exceed the poverty line.

Large swaths of people have been dropped from the program over the years for simply failing to file proof of income, critics point out. This can lead to people having their loans reinstated if they forget to file paperwork. The monitoring program provides an extra burden for people who hope to qualify.

“The irony is that you have to work really hard to prove that you’re unable to work,” Persis Yu, an attorney at the National Consumer Law Center, told NPR in 2019. Hundreds of thousands of people at the time who could qualify for the program weren’t receiving the benefit, according to NPR.

The new guidance will allow people who have been diagnosed by a physician, the Social Security Administration or Department of Veterans Affairs to be totally and permanently disabled to have their loans forgiven automatically, without having to navigate a complicated system of paperwork.

The Biden administration is extending an income waiver indefinitely after dropping the paperwork requirement retroactively for the course of the pandemic. It is planning to pursue a rule to eliminate the requirement altogether in October, according to the Education Department.

“The Department of Education is evolving practices to make sure that we’re keeping the borrowers first and that we’re providing relief without having them jump through hoops,” Cardona said in a call with reporters, according to The Washington Post. “I’ve heard from borrowers over the last six months that the processes are too difficult so we’re simplifying it.”

President Joe Biden has come under scrutiny from the left for failing to follow through with campaign promises to cancel student debt for all. He has only offered limited debt cancellation programs that target specific groups. Progressives offered limited praise for Thursday’s move, though noted that Biden can and should do more on the issue.

“I’m very glad that [the Education Department] is taking this important step to provide long-overdue relief to borrowers with disabilities. This announcement will change thousands of lives for the better,” said Sen. Elizabeth Warren (D-Massachusetts) in a tweet on Thursday. Warren has been one of Congress’s largest advocates for cancelling student loans.

“Grateful that the Biden Administration has formally recognized its authority to cancel student debt,” wrote Rep. Mondaire Jones (D-New York) on Twitter Thursday. “He must now do this for everyone.”

Activist group The Debt Collective noted on Twitter that the administration’s move was a very limited step to resolving this economic burden on millions of former students and their families. “The Biden administration announced student debt cancellation for 300,000 people today — a major policy win that took essentially no effort. He can, and should, do the same for every borrower,” the organization wrote.

“The student debt crisis was $1.8 trillion yesterday,” the Debt Collective continued in a separate tweet on Friday, “but thankfully Biden canceled nearly $6 billion, which means the student debt crisis is at $1.8 trillion.”

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