What You Need to Know
- The program will erase debt owed by 323,000 borrowers who are per
- The DOE also announced an interest waiver on loans for more than 47,000 current and former active-duty service members.
- Many student loan borrowers and their advocates want the administration to go further.
The U.S. The Department of Education will forgive approximately $5.8 billion in federal student loans owed by more than 323,000 borrowers who are permanently disabled.
The discharges will begin in September after borrowers are identified through a data match with the Social Security Administration, which pays their disability benefits.
A similar loan forgiveness program had been instituted for permanently disabled veterans under the previous administration, but that program was initially marred by delays.
The Biden administration’s DOE also announced a waiver on interest payments for student loans held by more than 47,000 current and former active-duty service members for loans made on or before Oct. 1, 2008. A data matching agreement with the Defense Department allows for that waiver.
Both new loan forgiveness initiatives are automatic. Borrowers will not have to request loan forgiveness or provide the DOE with any information, such as earnings in the case of disabled borrowers, or proof of active duty for veterans, to qualify for the new programs.
Both programs follow the administration’s announcement extending the moratorium on federal student loan interest payments until Jan. 31, 2022, which will be the final extension, according to the DOE.