Biden Administration Expands Student Loan Forgiveness for Disabled Borrowers

The Biden administration has updated its guidance on the Total and Permanent Disability discharge program, expanding the list of medical providers who can certify borrowers' eligibility for federal student loan forgiveness. The update is expected to affect approximately 548,000 borrowers with $14.1 billion in discharges.

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Aqsa Younas Rana
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Biden Administration Expands Student Loan Forgiveness for Disabled Borrowers

Biden Administration Expands Student Loan Forgiveness for Disabled Borrowers

The Biden administration has updated its guidance on the Total and Permanent Disability (TPD) discharge program, expanding the list of medical providers who can certify borrowers' eligibility for federal student loan forgiveness. This update is expected to affect approximately 548,000 borrowers with a total of $14.1 billion in discharges.

Why this matters: The expansion of the TPD discharge program has significant implications for the financial stability and well-being of disabled borrowers, who often face unique challenges in managing their debt. By providing relief to these borrowers, the administration's efforts can have a ripple effect on the broader economy and society, promoting greater economic mobility and reducing inequality.

The TPD Discharge program offers three pathways for borrowers to qualify for loan forgiveness: certification by the Veterans Administration, receiving Social Security disability benefits under certain circumstances, or having a medical provider certify their eligibility. Borrowers must demonstrate an inability to engage in substantial, gainful activity due to a physical or psychological condition that has persisted or is expected to continue for five years, or isterminal.

The new guidance clarifies key elements of the program, outlines common mistakes to avoid on the application, and provides insight into the review process for medical providers completing the certification for the first time. The reforms have resulted in over $14.1 billion in student loan forgiveness for more than 548,000 borrowers.

The Biden administration has been working on various initiatives to address student loan debt, including a proposed rule change that would give the U.S. Secretary of Education more discretion to forgive loans based on specific criteria. In early April, the administration unveiled a newstudent-loan-forgiveness planaimed at helping over 30 million qualifying borrowers who owe more than they originally borrowed due to interest, with the potential for up to $20,000 in forgiveness.

President Biden's "Plan B" student loan forgiveness initiative, set to launch this fall, aims to offer forgiveness to borrowers who qualify for existing loan forgiveness programs but have not applied or are facing financial hardship due to medical conditions and associated expenses. Draft regulations for the program are currently open for publiccomment.

The Biden administration's updates to the TPD discharge program and introduction of new forgiveness initiatives are providing significant relief to borrowers with disabilities, helping them achieve financial stability and relief from the burden of student loans. As of mid-April, the administration announced the approval of over $153 billion in student loan debt cancellation for nearly 4.3 million borrowers.