Student debt is a hot-button issue that affects many Americans, including those with disabilities. For example, if Jane Doe takes out a student loan and later in life develops a severe permanent disability that impacts her ability to work, Jane is no longer required to pay back her loan. Yet, to have her student debt cancelled, Jane must inform the government of her situation and go through a process involving forms and an income monitoring period.
This debt cancellation process has several problems. For one, NPR recently discovered that 72% of Americans with severe permanent disabilities that impact their ability to work were still paying student debts due to a mixture of unclear information about qualification and the complicated income monitoring process. For many of them, the financial impact had been too much and more than half had defaulted on their loans.
A new problem arose in 2019 when a requirement designed to prevent fraud in the debt cancellation system–an annual income documentation process that lasts for three years–caused confusion. Tens of thousands of Americans with disabilities were then informed that their debt had been reinstated. The Education Department later reversed this.
Due to confusion surrounding debt cancellation, the Education Department seems interested in reform. Advocates continue to push for automatic debt cancellation for borrowers with severe, permanent disabilities so that no one finds themselves paying back money that isn’t owed.