President Obama is forgiving student loans for 400,000 people

Obama student loan forgiveness for people with permanent disabilities

The Obama administration is working to forgive the student loan debt for 400,000 Americans with permanent disabilities. The move will help safeguard those individuals’ Social Security payments.

The Education Department on Tuesday announced a new process to better identify hundreds of thousands of borrowers who are eligible to apply for the already existing federal loan-forgiveness program.

The program is only available to individuals who have been permanently disabled and can no longer work.

Under Secretary of Education Ted Mitchell says too few borrowers have been taking advantage of the program because they may not know about it or the process of applying is too complicated for many borrowers to complete.

Mitchell says one applicant spent 7 years getting their loan forgiven.

Letters from the department will be sent to about 387,000 people that the agency has identified as eligible. Loans worth about $7.8 billion will be forgiven if all borrowers take advantage of the program. 179,000 of those people have student loans that are currently in default.

As part of his Student Aid Bill of Rights President Barack Obama has called for a more streamlined process to have those loans forgiven in the future.

The Department of Education will also work more closely in the future with the Social Security Administration to identify people with federal student loans who were also receiving disability payments and deemed permanently disabled.

The loan forgiveness program involved a three-year monitoring program. If a person’s income goes up during that time, they may be asked to start making payments again.