Portman, Colleagues urge Education Secretary to cancel delinquent student loans for Americans with permanent disabilities
Total and Permanent Disability (PDT) borrowers face costly delays and bureaucratic hurdles in receiving a benefit to which they are entitled under the Higher Education Act of 1965
August 5, 2021
WASHINGTON DC – Yesterday, US Senators Rob Portman (R-OH), Chris Coons (D-DE), Angus King (I-ME) and Tammy Duckworth (D-IL) and US Representatives Ron Kind (D-WI) and Brian Fitzpatrick (R-PA) signed a bipartisan, bicameral letter urging US Department of Education Secretary Miguel Cardona to move forward quickly with developing rules to automatically pay off overdue student loans over of 517,000 Americans with total and permanent disability (PDT).
While the Higher Education Act of 1965 allows people with PDTs to cancel their unpaid federal student loans, these borrowers face significant challenges that are both administratively burdensome and unnecessary in the process. income application and tracking process. Unfortunately, this has resulted in hundreds of thousands of eligible borrowers not getting the debt relief they are entitled to. However, many of these rules in place are not specified by law, which means that the Department of Education has the power to change the regulations of the TPD program and make student loan repayments automatic for borrowers with a PDT once identified.
“While the Department has made improvements to the TPD process over the past few years, more can be done to address inequities and program burdens. Therefore, we continue to lead a bipartisan and bicameral effort so that Americans no longer face costly delays or bureaucratic hurdles in receiving a benefit to which they are entitled under the law, ” wrote the lawmakers. “The Ministry can eliminate unnecessary red tape and provide quick relief to borrowers with an interim final rule to automate discharges under the TPD program. We continue to urge the ministry to act on our request as soon as possible. “
REMARK: In 2017, Portman’s Stop Taxation of Death and Disability Act, a bill to remove the federal tax penalty for federal student loans canceled due to death or total and permanent disability, has been passed. He also signed several letters, sent in February 2018 and October 2019 respectively, to the Department of Education urging the Department to make the student loan discharge process automatic as soon as a borrower is identified through matching agreements with the Department of Veterans Affairs (VA) and the Social Security Administration (SSA). In December 2019, Portman and a bipartisan group of lawmakers urged the Department of Education’s Acting Inspector General to investigate the federal student loan process for Americans with PDTs in response to an alarming situation report of the National Public Radio which found that between March 2016 and September 2019, only 28% of borrowers identified through the correspondence of SSA data as eligible for the TPD discharge actually saw their loans canceled or are on the right way for that to happen. In April of this year, Portman introduced bipartite and bicameral legislation that would allow a parent whose child develops total and permanent disability to qualify for a student loan discharge.
The letter is available here and is copied below.
August 4, 2021
Honorable Miguel Cardona
US Department of Education
400 Maryland Avenue, southwest
Washington, DC 20202
Dear Secretary Cardona:
We are writing to urge the United States Department of Education (the “Department”) to move quickly to automatically pay off the loans of the more than 517,000 student loan borrowers who have been identified by the Social Security Administration (SSA ) as having a total and permanent disability (TPD). Under Section 437 (a) of the Higher Education Act 1965, individuals with PDTs are eligible for cancellation of their unpaid federal student loans. Under the Tax Cuts and Jobs Act, 2017, federal student loans canceled due to death or TPD are exempt from federal income tax. In addition, under the Promotion of Undergraduate Talent by Unlocking Resources for Education Act 2019 (FUTURE Act), the ministry is required to streamline the TPD student loan discharge process. While the Department has made improvements to the TPD process in recent years, more can be done to address inequities and program burdens. Therefore, we continue to lead a bipartisan, bicameral effort so that Americans no longer face costly delays or bureaucratic hurdles in receiving a benefit to which they are entitled under the law.
The department is currently using data provided through twinning agreements with the SSA and the Department of Veterans Affairs (VA) to identify federal student loan borrowers with disabilities who may be eligible for the TPD student loan discharge. Once notified, these borrowers must apply for release and, if the borrower has been matched through the SSA, then must undergo a three-year income monitoring period to verify that they continue to have no income and must submit additional documents to complete the process. If the borrower does not meet the income requirements or provide the required documents, the Ministry will reinstate the borrower’s obligation to repay the canceled loans. However, the requirements for submitting claims and undergoing income testing are not specified by law. As such, the Ministère has full authority to modify the regulations and make automatic student loan repayments for borrowers holding a PDT.
On August 21, 2019, President Trump signed a presidential memorandum directing the Secretary of Education and the Secretary of Veterans Affairs to change regulations and automatically pay off federal student loan debt for veterans who hold the post. ‘a PDT. The ministry was able to quickly issue new rules and “determined that there are good reasons for developing interim final rules and that such action is in the public interest.” However, the memorandum did not apply to the hundreds of thousands of borrowers matched via SSA data, despite the same circumstances. It is unnecessary and contrary to the public interest to submit to lengthy negotiated regulations to provide a student loan discharge to severely disabled borrowers, as they are entitled to under the law, when information is already filed with the government. federal government to verify their eligibility.
Therefore, the ministry should issue as soon as possible an interim final rule that (1) provides automatic student loan discharges to those with a PDT designation on SSA records by eliminating the application process, and (2) eliminates the monitoring period. Eligible borrowers should then receive their loan release promptly after their initial determination of disability has been certified by the SSA and no later than 90 days. Eliminating the application and follow-up period will align the process for borrowers with an SSA designation with the process that applies to borrowers with a VA designation.
The Ministry can eliminate unnecessary red tape and provide quick relief to borrowers with an interim final rule to automate discharges under the TPD program. We continue to urge the Ministry to respond to our request as soon as possible, and request a response to this letter no later than August 30, 2021. For your knowledge, we have attached the letters of February 15, 2018, 9 October. 2019 and December 6, 2019 that we forwarded to the previous administration.