Student Loans and Disability Benefits: Hope on the Horizon?

On March 10, 2015, President Obama issued “A Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers.” The fact sheet of the President’s statement establishes a number of important rights that student loan borrowers should have and includes some hope for those saddled with these loans but also facing the daunting task of life with a disability.

According to the fact sheet, the Department of Education must work “with the Social Security Administration to ensure that disability insurance recipients who can discharge their student loans are not instead seeing their disability payments garnished to repay defaulted loans.”

This means that by 2016 the DOE may have a process in place to stop collection efforts and suits against disabled borrowers receiving SSDI. The process is likely to ensure that these borrowers are referred to the disability discharge process (DDP) instead of continued collection efforts.

The fact sheet does NOT give the DOE authority to automatically stop student debt collection from all SSDI beneficiaries but, at the very least, establishes a firm policy that the DOE and SSA work out a process that would allow meaningful consideration of the DDP based on the particular facts of any given case.

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