Disabled borrowers may be able to get their student loans forgiven

The Education Department (ED) enacted reforms recently on behalf of borrowers who become disabled, according to ProPublica. Under federal law, borrowers who develop severe and lasting disabilities are entitled to get their loans forgiven.

ED issued new rules earlier this month that make it easier for disabled borrowers to get their federal student loans forgiven. The rules recognize certain disability findings by the Social Security Administration (SSA) as sufficient grounds to discharge student loans. This will allow many borrowers to avoid a lengthy double review.

The reforms came after an investigation early last year by ProPublica and the Chronicle of Higher Education found that the department’s system for evaluating disability was “erratic, duplicative, and dysfunctional.” It was keeping many genuinely disabled borrowers buried in student debt.

Streamlining the application process, improving communication with applicants, and creating a new role for lawyers and family members of disabled borrowers who wish to serve as their representatives are some of the reforms made, which will go into effect on July 1, 2013.

With the new system, disabled borrowers will be able to submit award letters from SSA as proof of their disability. If the award letter says the beneficiary is not scheduled for a medical review for at least 60 months, that means that the borrower has a long-term disability and is immediately eligible to be forgiven of  federal loans.

If you or someone you know needs help with Social Security Disability benefits, contact the disability lawyers at Fleschner, Stark, Tanoos & Newlin.