Education Department Cancels $5.8 Billion in Debt For Borrowers with Permanent Disabilities

Yesterday the U.S. Education Department announced it will cancel $5.8 billion in outstanding student loans for borrowers unable to work because of permanent disabilities. According to the agency, the move will benefit over 320,000 ‘total and permanent disability’ borrowers. Education Secretary Miguel Cardona said “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.” The Education Department said that qualifying borrowers will be identified automatically through a Social Security Administration data match and the agency will pursue permanently eliminating the monitoring period in October.

Since taking office, President Biden has faced pressure from Democrats for broad debt forgiveness including calls to cancel $50,000 in student debt per borrower. Biden has so far resisted but has also said he would support a move by Congress to cancel $10,000 per borrower. Earlier this month he extended the pandemic-related suspension on federal student loan payments until January 31st.