US cancels student debt for more than 40,000 disabled Americans

By: | March 30, 2021

The U.S. Education Department is canceling student debt for more than 40,000 Americans who were previously granted loan forgiveness because of disabilities but later had their debt reinstated after they failed to submit certain paperwork, the agency announced.

The action targets a loan forgiveness program that aims to help people with disabilities but that critics say carries overly burdensome rules. After being granted loan forgiveness, borrowers are required to submit documentation of their earnings for three years. If their earnings go beyond certain thresholds — or if they fail to submit documentation — they’re back on the hook for their loans.

Acknowledging the program’s challenges, the Education Department said it will relax the rules during the coronavirus pandemic and consider other changes to the reporting requirements in the future.

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