Federal Government Helps Disabled People Get Rid of Loans

April 19, 2016

The Obama administration is working towards ensuring that all the people eligible for the federal loan forgiveness program are identified and assisted through the process. The federal government wants disabled people to know of their eligibility and smoothen out the process for them so that maximum people can benefit from it.

Steps taken by the Federal Government

The first step taken by the government is to ensure that disabled people know that if their loans, such as student loans, are forgiven, it would have no impact on their social security payments or disability payments. Another vital step is to initiate a new process so that disabled people eligible for the forgiveness program are better identified and helped in getting the benefits.

The Beginning

President Barack Obama initiated the change last year when he called for a more streamlined process with regard to his Student Aid Bill of Rights.

The Process

The Education Department has already begun the process of identifying people who are totally disabled, cannot work at all, and eligible for the forgiveness program. The department also worked in conjunction with SSA to create a list of people who are permanently disabled, receiving disability payments and also have student loans.

The Flaws

Ted Mitchell, who serves as the Under Secretary of Education has recently stated that only a small amount of borrowers have been taking the benefits offered by the forgiveness program. He said there can be two reasons behind it. First is that people are unable to apply for the program because they don’t know about it. The second can be that the process of applying might be too complicated.

Mitchell gave an example of the second reason by saying that a woman dealing with breast cancer side effects that left her to be completely disabled tried to get her debt discharged. Unfortunately, it cost her 7 long years to get through the process. He added that it should not be like this. The government must reach out to such people and take the worry regarding the loans off their plates.

The Action Plan

The action plan of the Education Department is quite simple. They would send letters to about 387, 000 people who are eligible for the forgiveness of loans of about 7.8 billion. The letters would be sent from Monday and would inform the recipients that they are eligible for loan forgiveness. The letters would also have an application attached to it which just needs to be signed in order to avail this benefit.