“… The Department of Education will send letters to 387,000 people they’ve identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can’t work because of a disability to have their loans forgiven. The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.” …
I feel a disability coming on…
I would be alright with this if I believed the government could actually determine who was actually disabled.
There are so many fraudulent disability claims already and now tax payers get to pay for an additional $7.7 billion dollars in debt relief.
I’m generally supportive of student debt relief. However, in recent years, many have argued that the criteria for disability payments are a little loose. With the job market in a sorry state, one reason labor force participation fell was the incidence of hard-to-diagnose ailments and mysterious back pain.
That’s not to say the vast majority of people classified as disabled are committing fraud, a patently absurd claim however you slice it. However, rates have seemingly risen in recent years, and a more rigorous screening process for this loan forgiveness program might be worthwhile.
Sorry I am against this. There is already a disability provision for writing off loans. So folks are too lazy to submit paperwork to have them written off, so the government is going to make it easier??
Yes exactly, and right before the election. It is nothing but politics.
Does this now mean that those who are permanently disabled will not be able to take out student loans? If they will be allowed to, then that would be silly if those loans are then effectively, not loans.
Federal Government Finally Forgives Student Loan Debt of People Who Have Become Permanently Disabled.
(sarcasm to follow; it’s early here) Love how the Founding Father comes in to drop bombs on the CC minions. Let the Obama-bashing begin in 3 2 1…
Love the different spins on the same facts - the headline of the thread and the link in post 6. It’s either “Obama just waves his hand and lets those in debt off the hook” or “fed govt finally shows compassion to permanently disabled people.” Spin spin spin.
President Obama is not doing anything that isnt already there. There is a disability clause with student loans now, you just have to file a claim. I object to the govt making it easier to file a claim. If you are truly disabled then the least you could do is file the proper paperwork.
@partyof5 - I think that would depend on how disabled you are… There could be some people who are so disabled that they have people taking care of them so in that case getting a letter might be the only way for them to know about it.
@michigangeorgia I would venture that is a very small percentage. There is some relief for student loan borrowers, there is a disability clause and there are also income based repayments. Your balance will be forgiven after 20 years, if you sign up for the income based, income contingency or pay as you earn plan. For the life of me, I dont understand why folks dont take advantage of these programs.
No one has addressed my question…
If people who’ve been deemed to be “permenently disabled” (and that’s not hard to get these days) will have their ed student loans cancelled because the thinking is that they can’t work to pay the debts off, DOES THAT MEAN that future students who ALREADY have been deemed “permemently disabled” will NOT be able to take out student loans since the gov’t believes that they can’t EVER pay the debts back?
Or will the gov’t be silly enough to provide up to $224k in fed student loans (undergrad/grad/med/dental) to a student who is already considered to be permanently disabled…and then cancel their debt once they graduate???
CRAZY
hmmmm…will there be a tax obligation for these cancelled debts? or will those be forgiven as well.
You raise a good question. Logically it would seem to me that if a person is able to go to college and do the college work required that they are also capable of holding a job. Thus, that person should be required to pay back the loan.
^^^
Right, unless something happens to the person (that can be documented) after graduation.
Anyone who can complete a college education should be able to work in “some” capacity. If not, then fed cancellable loans should not be available.
We had a neighbor who claimed to be “disabled” because she said that she couldn’t stand and teach all-day anymore. She was collecting disability. (However, she seems to have no trouble walking around shopping centers doing very extensive shopping expeditions.)
??? She can’t teach anymore? She can’t do anything that earns money anymore??? What about teachers who teach from wheelchairs? I have another neighbor, who is a teacher, who is a paraplegic and teaches from a wheelchair.
Yes there are many milking the disability clause. I remember seeing a report about a county in Alabama, where there was an unbelievable amount of folks deemed “disabled”.
@mom2collegekids yes, the forgiven balance is taxable, unless it was part of the teacher forgiveness program.
Free things buy votes and popularity. Why one of the presidential candidates is so popular for somebody who is completely unknown? Isn’t he promoting the free things and everybody around him just clap and clap and say “yes, that is what we want to hear!!”. All this clapping does not require much brain activity though, simple “if then else” thinking is irrelevant to these clapping people.
My son had a friend who was on the verge of graduating when he was in a severe auto accident. He is brain damaged and paralyzed. That kind of a person may never be able to pay back a student loan. But disability is defined so loosely that a person I know claims to be disabled by loss of peripheral vision but spends his time playing tennis!