New Student Loan Forgiveness Application for Borrowers With Medical Issues

Education Department updates student loan forgiveness application for borrowers with disabling medical conditions, expanding access and simplifying the process.

The Education Department has announced an updated student loan forgiveness application for borrowers with disabling medical conditions. The new application reflects significant recent regulatory changes to the longstanding disability discharge program, which aims to expand access to student debt relief and simplify the process for disabled borrowers to apply for, receive, and retain student loan forgiveness.

The Biden administration enacted new regulations for Total and Permanent Disability discharges last July, codifying several temporary TPD flexibilities implemented during the Covid-19 pandemic and broadening access to loan forgiveness under the TPD program. One of the most important changes is the expansion of avenues to receiving student loan forgiveness for borrowers receiving Social Security disability benefits. The eligibility criteria have been relaxed, allowing more flexibility for borrowers who qualify for Social Security disability benefits based on a compassionate allowance or have a disability onset date five years prior to applying for TPD relief.

The rule changes also expand the categories of medical providers who can certify that a borrower is disabled on a medical provider's certification, allowing physician's assistants, nurse practitioners, and independent psychologists to certify a borrower's eligibility for relief under the TPD program.

Furthermore, the new regulations formally end the longstanding practice of post-discharge income monitoring after student loan forgiveness has been approved, eliminating the cumbersome administrative requirement that often resulted in borrowers having their loans reinstated due to minimal employment income or failure to submit a timely monitoring form.

The updated TPD discharge application incorporates the recent regulatory changes and is designed to make it easier for borrowers to apply for student loan forgiveness, with further revisions in the works. The Biden administration has approved $10 billion in student loan forgiveness under the TPD program during the last two years, including borrowers who were approved for discharge under the pandemic-era flexibilities and those who have benefited from a data-sharing initiative between the Social Security administration and the Education Department to identify disabled student loan borrowers.

In addition to the TPD program, the administration is developing a new student loan forgiveness program under the Higher Education Act, targeting several categories of borrowers for relief, including those facing hardships due to medical issues. The Education Department has been conducting multiple rounds of negotiated rulemaking to determine the eligibility criteria for the new loan forgiveness plan, with final regulations expected to be published in 2024.

Overall, the updated student loan forgiveness application and recent regulatory changes reflect the administration's commitment to expanding access to student debt relief and simplifying the process for disabled borrowers to apply for, receive, and retain student loan forgiveness. These changes aim to provide greater flexibility and support for borrowers with disabling medical conditions, ensuring that they can access the relief they need without unnecessary barriers or administrative burdens.