The Biden administration announced that it would set up more than 323 thousand borrowers with a total and permanent disability (TPD) for $5.8 billion in automatic federal student loan forgiveness. The Education Department announced that it would no longer make those classified as totally and permanently disabled apply for their federal student loans to be discharged. Instead, borrowers with TPDs will be able to receive automatic forgiveness thanks to a new rule allowing student loan servicers to match customer data with the SSA. Federal law allows student borrowers with TPDs to seek forgiveness of their federal student loans on the grounds that they would not be able to make enough to pay them off. The Education Department previously arranged a similar automatic loan forgiveness program with the Department of Veterans Affairs, but the new rule will allow nonveterans with TPDs to skip the application process.
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