It’s a big day today! Obama plans to forgive $7.7 billion worth of student loans from people with severe disabilities. People with disabilities are already eligible for forgiveness, but the Obama administration and the Department of Education are trying to identify everyone that is eligible. They will be notifying candidates that may not even know that they could have the loans forgiven.
They can use their Social Security status to apply for loan forgiveness. The agency has identified over 300,000 people that qualify for forgiveness in its first review. Some 179,000 of the disabled people are in default on their loans. Around 100,000 people are at risk of having their Social Security Disability Income (SSDI) benefits garnished. This is needed to make sure that people who are eligible for loan forgiveness also don’t have their SSDI payments revoked as well. Some people don’t have any other income besides their disability payments.
Some are wishing that the Department of Education would automatically stop the garnishment of the Social Security checks since not everyone is aware of the fact that their loans could be forgiven. Some people with psychological disabilities may not understand the material they get or how to fill out the application.
Unfortunately, some people may have to pay taxes on the loans that are forgiven. The Obama administration has promised to change that in the 2017 budget so that borrowers don’t get penalties.
Many people with student loans that are decades old are still having their Social Security checks garnished because of it. This needs to stop.
Adam Minsky, a lawyer specializing in student loans, was “cautiously optimistic” and he had this to say:
“When you’re already totally and permanently disabled it can be challenging to go through this process without some help. If this helps people that are clearly eligible for discharge get one with less red tape, less waiting and less uncertainty, that’s great.”
Featured image Getty/Chip Somodevilla