U.S. Federal Student Loan Repayment Forgiveness

Introduction

President Obama and his administration plan to forgive $7.7 billion in federal student loans held by Americans that are currently disabled. The student loan debt burden has been a huge problem for individuals that are permanently disabled. Even with programs existing that allow for these debts to be forgiven, hundreds of thousands of borrowers simply don't know that this program exists nor how to apply.

Main Digest

With this new update, The U.S. Department of Education and President Obama took steps to help these individuals. Working hand in hand with the Social Security Administration, the department has been seeking out borrowers that are receiving disability payments and have the status of 'Medical Improvement Not Expected'. There have been a total of 387,000 matches out of which 179,000 are currently in default and at risk of having their social security benefits as well as tax returns garnished.

Effective this week, borrowers who are in this group will receive a letter from the government outlining the steps needed to receive a discharge and total forgiveness of their federal student loan debt. The process for discharge is much simpler than it used to be in the past with no proof of disability needed. Borrowers who receive this letter will simply need to sign it and send it back.

While this new change is a great step toward helping Americans tackle their student loan debt, the $7.7 billion is only half of one percent (0.5%) of the total $1.344 trillion in federal student loan debt. Aside from this program there are other options available for borrowers that do not fit this criteria. Income driven repayment and forgiveness plans have been gaining popularity and helping millions of borrowers drop their monthly payment to as little as $0/month.

Student Debt Advocates has been advising borrowers on such repayment and forgiveness plans for multiple years. With over 15,000 people that have been advised, there has been real steps toward made toward making a dent in the student loan debt load burden that borrowers have struggled with.

Helpful Resources:

• Consequences of Student Loan Default
• Student Loan Debt: Undue Hardship Assistance
• New U.S. Student Loan Repayment Plan Proposed
• Total and Permanent Disability Claims on Student Loans
• Joint Efforts to Protect and Support Student Loan Borrowers
• Student Loan Discharge Process for Disabled Veterans Made Easier
• Student Loans Linked With Lower Net Worth and Housing Values After College

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Cite This Page (APA): Langtree, I. C. (2016, April 21 - Last revised: 2023, November 29). U.S. Federal Student Loan Repayment Forgiveness. Disabled World. Retrieved September 13, 2024 from www.disabled-world.com/disability/finance/forgiveness.php

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