Department of Education Eliminates $5.8 Million in Student Loan Debt
On August 19, 2021, the Department of Education announced that they will eliminate student loan debt for “over 323,000 borrowers who have a Total & Permanent Disability (TPD).”
Eliminating Loan Debt for TPD Students
Through a new regulation announced in mid-August, the total amount of student loan debt to be discharged is estimated at $5.8 million.
These discharges will happen automatically through data-sharing processes between the Department of Education (DoE), the Department of Veterans Affairs (VA), and the Social Security Administration (SSA).
So far, the Biden administration has approved about $8.7 billion in student loan discharges, impacting over 450,000 students.
The DoE has also extended the pause on student loan repayment, interest, and collections to January 31, 2022. That move has saved billions of dollars for over 40 million students.
“Brave men and women in uniform serving our country can now focus on doing their jobs and coming home safely, not filling out more paperwork to access their hard-earned benefits,”
Interest Waivers for Current and Former Soldiers
Subsequently, the DoE announced on August 20, 2021 that it has “retroactively waived interest on loans held by more than 47,000 current and former active-duty service members.
Additionally, using the same data-matching processes used to identify totally and permanently disabled students, the DoE has taken steps to automatically grant these waivers.
Historically, the Higher Education Act mandates that service members who received Imminent Danger or Hostile Fire pay should not accrue any interest on federal student loans.
Any student loans awarded to these Veterans on or after October 1, 2008 should not have accrued interest. Sadly, though, many of the loans had garnered interest charges.
“Brave men and women in uniform serving our country can now focus on doing their jobs and coming home safely, not filling out more paperwork to access their hard-earned benefits,” declared Richard Cordray, the FSA Chief Operating Officer. “Federal Student Aid is grateful to our strong partnership with the Department of Defense, and we will seek to reduce red tape for service members wherever possible.”
RELATED: Student Loan Tax Deduction
What Happens Next?
Since the DoE indicated that these processes are automatic and retroactive, there should be nothing you are required to do.
For inquiries or concerns related to these topics, call the Department of Education at 800-USA-LEARN (800-872-5372).
For general information about your current federal student loans, contact the Federal Student Aid Information Center by calling 800-4FED-AID (800-433-3243).
(Image courtesy of Natalie Schorr via Shutterstock)
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