Biden's Education Dept. just made 323,000 borrowers eligible for $5.8 billion in student-debt relief

college graduation — Andreas Rentz/Getty Images

Education Sec. Miguel Cardona announced 323,000 borrowers with disabilities will get $5.8 billion in student-debt relief.
He also is "indefinitely" waiving the requirement for those borrowers to submit proof of income.
Borrowers will no longer have to undergo a burdensome process to get relief, advocates said.
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President Joe Biden's Education Department just took a major step in ensuring borrowers with disabilities burdened by student debt can get relief.

On Thursday, Education Secretary Miguel Cardona announced in a press release that 323,000 borrowers who have a total and permanent disability (TPD) will get $5.8 billion of their student debt automatically discharged. The department also announced it will be "indefinitely" waiving the policy for TPD borrowers to require proof of income, which in the past has resulted in a reinstatement of loans if borrowers don't respond.

"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," Cardona said. "This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support."

Established under President Barack Obama, anyone determined permanently disabled by a physician, the Social Security Administration, or the Department of Veteran Affairs are eligible for federal student-debt cancelation, with a requirement to submit documentation during a three-year monitoring period to verify that their incomes did not exceed the poverty line.

In March, Cardona waived that requirement for 230,000 borrowers with disabilities for the duration of the pandemic, saying at the time it would "ensure no borrower who is totally and permanently disabled risks having to repay their loans simply because they could not submit paperwork."

Cardona said in Thursday's announcement that while he is permanently getting rid of the paperwork requirement, he will also consider waiving the three-year monitoring period.

Bethany Lilly, the director of income policy at The Arc, an organization advocating for people with disabilities, told Insider following the department's announcement that now, borrowers with disabilities do not have to undergo "an incredibly strenuous and bureaucratic process that doesn't really work."

"I am so excited for these borrowers," Lilly said.

Insider previously reported on the difficult process borrowers with disabilities had to go through just to get the student-debt relief to which they were entitled, with experts saying the paperwork requirements and monitoring period were unnecessary and burdensome steps.

According to the press release, the change will go into effect in September and borrowers will then be notified of their debt discharges, and the department expects all discharges to occur before the end of the year.

Two weeks ago, six bipartisan senators urged Cardona to quickly discharge loans of borrowers with TPD and asked him to get rid of the administrative burdens that accompany the process.

Student-debt relief under Biden now stands at approximately $8.7 billion for about 455,000 borrowers.

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