Navigation Disability Discharges for Student Loans
On August 19, 2021, the Department of Education announced that more than 323,000 student loan borrowers who receive Social Security disability benefits will have their student loans discharged. This is because those borrowers had been placed in the “Medical Improvement Not Expected” category for Social Security’s continuing disability reviews. The designation of “Medical Improvement Not Expected” indicates that Social Security does not believe the borrower’s medical condition would be likely to improve at any point in the future and the person will continue to remain eligible for Social Security disability.
While the Department of Education granting Total and Permanent disability (TPD) discharges for Social Security disability recipients in this category is not new, borrowers previously had to apply for the discharge. However, the Department of Education and Social Security will now work together and share data so that these discharges will be automatic. The Department of Education will send a letter to those that qualify for a TPD discharge based on information that they receive from the VA or Social Security. The Department of Education has stated that unless the borrower tells them that he or she does not want to receive a TPD discharge by a date specified in a letter sent to the borrower, the Department of Education will automatically discharge the borrowers’ federal student loans. Those who have not received a letter from the Department of Education notifying them that they qualify for a TPD discharge due to information from the VA or Social Security but who believe that they do indeed qualify can submit a discharge application accompanied by documentation of his or her VA or Social Security disability determination.
