The Biden administration announced Thursday that it is moving to wipe out $5.8 billion in federal student loan debt held by more than 300,000 people with severe disabilities, a step progressives welcomed while also demanding that such relief be extended to every borrower in the United States.
In a statement, the Education Department announced a new regulation that will erase student loan debt for an estimated 323,000 borrowers who have a total and permanent disability.
The policy, which is set to take effect next month, will eliminate a rule that requires people with total and permanent disabilities to apply for student loan debt relief. Under the new regulation, eligible relief recipients will be identified through data-matching with the Social Security Administration and will have their student loan debt canceled automatically.
“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,” said Education Secretary Miguel Cardona. “We’ve heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it. This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support.”
Aaron Ament, president of the National Student Legal Defense Network, said the Education Department’s move will be life-changing for many borrowers facing large student-loan payments.
“This is a huge moment for hundreds of thousands of borrowers with disabilities who can now move on with their lives and won’t be trapped in a cycle of debt,” Ament told the Associated Press.
Lawmakers and activists who have been pressuring President Joe Biden to enact far-reaching student debt relief said the Education Department’s Thursday announcement once again demonstrates that the administration has the legal authority to cancel student debt without congressional approval, despite House Speaker Nancy Pelosi’s (D-Calif.) recent claim to the contrary.
“This is an average of $18,000 per borrower,” The Debt Collective said of the Education Department’s new regulation. “Do lawyers have legal concerns? Nope. Do politicians have political concerns? No. So let’s do this on an even larger scale.”
“Now do the rest of the $1.8 trillion,” the group added.
As the Education Department noted in its statement, the Biden administration has unilaterally discharged a total of $8.7 billion in student loan debt for 455,000 borrowers since taking office in January.
“Grateful that the Biden administration has formally recognized its authority to cancel student debt,” said Rep. Mondaire Jones (D-N.Y.). “He must now do this for everyone.”
Earlier this month, under pressure from progressive members of Congress, the Education Department extended a pandemic-related moratorium on federal student loan payments through January 31, 2022. But the administration has yet to provide any indication that it plans to pursue the kind of permanent, sweeping student debt relief that activists and some Democratic lawmakers are demanding.
At the beginning of April, White House Chief of Staff Ron Klain said that Biden had directed the Department of Education to prepare a memo on the president’s authority to cancel student loan debt via executive action. Four months later, the memo has yet to be released.
“Just cancel all the student debt,” progressive organizer Melissa Byrne tweeted Thursday. “Many borrowers with disabilities are not certified. Cancel all the student debt.”
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