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Disabled People Can Now Qualify for Student Loan Forgiveness. Here's How

Other than medical expenses, Americans experience the most debt in the form of student loans. Ranging anywhere from $1000 to $100,000, and sometimes higher, college debt disproportionately impacts certain communities more than others. One such group is the disability community, and there are a couple of reasons for this.

People who experience permanent disabilities often encounter a fair number of medical expenses that can be rather pricey. Higher education degrees can also be expensive, and if you’re already paying out of pocket for healthcare, it’s easy to see how taking out student loans for your education couldn’t just be the most convenient option at the time, it may be the only option. Some disabled people also have conditions that are so severe they impact their ability to find employment, either limiting them to part-time work or making it difficult to work at all.

For people who go to college and need to financially support themselves, but cannot work, student loans may be a necessary evil with the potential to outweigh the costs later down the road. For people who find themselves in this position (have a disability, student loan debt, and cannot be employed), some recent news from the government may be something you can take advantage of.

Student debt forgiveness has become somewhat of a hot-button political issue with legal questions and economic implications dominating the debate. However, a recent decision from Secretary of Education Miguel Cardona spells good news for the disability community. In addition to automatically canceling the debt of over 41,000 disabled Americans, Secretary Cardona last month re-instated a federal rule originally from the Obama administration that makes “anyone determined permanently disabled by a physician, the Social Security Administration, or the Department of Veteran Affairs… eligible for federal student-debt cancellation.” However, the current enactment of the rule is even better than the first.

The Obama-era rule required a lot of paperwork. Applicants for the cancellation had to frequently submit documentation of their income and disability status for three years to “verify that their incomes did not exceed the poverty line.” Secretary Cardona has eliminated that requirement in its entirety. The waiver of this administrative headache is more impactful than some may, at first, appreciate. With the rule and its changes, more than 230,000 Americans are now eligible to receive federal student loan cancellation. There are three avenues for determining whether you can apply for this forgiveness (all resources and applications mentioned will be linked at the bottom of this story):

Personal physician diagnosis and documentation 
 

A licensed physician is authorized to provide you and the Department of Education (DOE) certified proof of your status as someone who is “totally and permanently disabled and unable to engage in any type of gainful activity caused by a physical or mental impairment…” There are more nuances to this avenue if, unlike the others, this is your first time having to prove your disability status to the government for financial assistance/benefits. There will be some additional hoops to jump through and additional criteria to meet. You should consult the resources from the DOE linked at the end of this story, as well as with your physician, to determine the next steps, if you do not already qualify under one or both of the next methods of applying for the cancellation.

Social Security 
 

One common political entity that is often the center of controversy, reform, and exception is the Social Security Administration (SSA). The SSA provides benefits to many demographics of Americans, including elderly, unemployed, and disabled people. In other programs aimed to provide financial assistance, there are often exceptions carved out to exclude people who receive SSA benefits. With this new loan forgiveness rule, people who receive benefits through the Social Security Disability Insurance or Supplemental Security Income programs may also be eligible to apply, though it depends. Some people who have outstanding federal student loans and receive SSA benefits will actually be proactively contacted by the DOE and will not have to supply any additional documentation (though again, there are nuances to who will be contacted). For those the DOE does not actively reach out to, but still receive SSA benefits and have a disability that would qualify under the new rule for forgiveness, they can still be eligible to apply.

The Department of Veteran Affairs (DVA)
 

This specifically applies to people who are veterans, having served active duty or reserves in one of the five branches of the military. The veteran must be classified by the DVA as having a condition that is “100% disabling” and, just like the first two, impedes the person’s ability to work entirely. The DOE will actively reach out to veterans notifying them of this new rule. Though veterans also have other avenues of pursuing loan forgiveness related to their service, this will open another, potentially less complicated, path to loan cancellation. Veterans who are not contacted by the DOE or the DVA may still be eligible and can apply with information from the DVA as they have their own systems of tracking health information.

This information is not advice from a physician, lawyer, or financial advisor. I am simply another disabled person who happens to be in college myself. I’ve seen student loan debt overwhelm my peers to the point of immense emotional distress. Anxiety and fears of defaulting or putting pressure on their families, especially during the coronavirus (COVID-19) pandemic, only make things worse. And with permanent disabilities that threaten employment status, that pressure and anxiety are dialed up even higher. This information, and the linked resources below, are meant to simply guide and help people find relief from what could be a very impactful financial burden in the midst of a global financial crisis. I hope these resources prove to be helpful, and that one way or another, you find relief in these times of hardship.

For more details on the action from the DOE and FAQs, click here.

For more details on the application process itself, or to begin the application, click here.

To contact the actual servicer that will be handling applications, you can email: [email protected] or call 1-888-303-7818

Getty image by zimmytws.