Hundreds of Thousands of Older Adults and People with Severe Disabilities are Eligible for Federal Student Debt Forgiveness but Bureaucratic Barriers Prevent Relief

Justice in Aging joins advocates in filing a rulemaking petition asking US Department of Education to discharge debt

Washington, DC—Data from the Social Security Administration show that some 625,000 individuals with disabilities, many of whom are older adults, are entitled to student loan debt forgiveness due to “total and permanent disability” but two-thirds of those borrowers, about 400,000 people, have not received relief, despite the fact that the US. Department of Education knows these individuals are entitled to have their debt forgiven.

Today, Justice in Aging, Student Defense, and Community Legal Aid Society, Inc. of Delaware submitted a Section 553(e) Rulemaking Petition calling on the US Department of Education to discharge that debt.  

The Department of Education and the Social Security Administration have a data-matching agreement that allows the Department to proactively identify eligible student borrowers and provide automatic relief. However, some 400,000 eligible older adults and people with disabilities have not been provided relief and continue to suffer under the weight of student debt.

Many either don’t know they are eligible for relief, or are unable to navigate the lengthy and confusing application process in order to prove what they’ve already proven to the Social Security Administration—that they are totally and permanently disabled. The petition filed today asks the Department of Education to use the information from the Social Security Administration and provide automatic relief to those who are eligible.

In recent years, student loan debt has been growing at alarming rates for adults age 50 and older, and among these older borrowers, in 2015 approximately one-third were in default. Once they are in default, the federal government can take up to 15 percent out of their monthly Social Security benefits. The statute protects just $750 each month from this garnishment, leaving these beneficiaries with income at less than 75 percent of the federal poverty level.

“Older adults, including people with disabilities, are facing substantial bureaucratic barriers in discharging their student loans. The Secretary of Education must act immediately, especially in light of the COVID-19 pandemic, to relieve them of these debts that are forcing them into poverty when they are no longer able to work,” said Kate Lang, senior staff attorney with Justice in Aging. 

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