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Biden administration to forgive student loan debt for permanently disabled Americans

Virus Outbreak New York
Posted at 3:25 PM, Aug 19, 2021

The Biden administration announced Thursday it is forgiving student loan debt to more than 323,000 borrowers who have a total and permanent disability.

The students will be identified through existing data that matches with the Social Security Administration, the government said.

The debt forgiveness process will begin in September, according to the Department of Education.

"Today's action removes a major barrier that prevented far too many borrowers with disabilities from receiving the total and permanent disability discharges they are entitled to under the law," said U.S. Secretary of Education Miguel Cardona.

The Department of Education says borrowers will receive notices about the discharges, which it expects to complete by the end of the year.

People who elect to have their debt discharged will not have to pay federal taxes on it, but the Department of Education says there may be “state income tax consequences.” The department adds that people can opt-out of the discharge.

Borrowers are encouraged to consult with their state’s tax office to find out how they will be impacted by the discharge.