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U.S. Discharges Student Debt for Disability; Broad $10K Lags

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The Department of Education announced Aug. 19 that it would automatically discharge federal student loans for 323,000 borrowers who qualify as totally and permanently disabled. Their debt totals $5.8 billion.

Those who qualify for the loan discharge have been identified through a data match with the Social Security Administration. Previously, individuals with federal student loans had to apply for a loan discharge by sending in documentation of their disability from the U.S. Department of Veterans Affairs, the SSA or a physician.

“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 Miguel Cardona, the secretary of education, in a press release. “This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support.”

Future borrowers also won’t have to apply for disability discharges; rather, they’ll be automatically identified based on........

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