States urge Betsy DeVos to forgive loans of students with disabilities

Student loan representatives from seven states and Washington, D.C., sent a letter Tuesday to Education Secretary Betsy DeVos and Social Security Commissioner Andrew Saul asking them to erase the federal loans for more than 53,000 student borrowers with permanent disabilities in their jurisdictions.

The letter says those students have received notices that they may qualify to have their loans forgiven under Title IV of the Higher Education Act, but just 10 percent of them have been granted relief.

"It is therefore critical that as Secretary you use your regulatory authority and access to borrower information to create the least onerous path to relief for this population, both as they apply for relief and to satisfy the monitoring requirements," the letter, signed by ombudspersons in Colorado, Illinois, Maine, Nevada, New York, Virginia, Washington state and D.C., says.

The ombudspersons say these borrowers have life-long disabilities and are unable to work or they can't engage in substantial activities because of a physical or mental ailment that has lasted for five years or more.

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The law "is an important safeguard meant to ensure that any borrower who is unable, due to disability, to work and earn the income needed to repay his or her loan is released from the obligation to do so," the letter adds.

Angela Morabito, a spokeswoman for the Department of Education, said that the current process requires the agency to receive an application from a student borrower before a loan discharge can be done.

"But we are interested in providing automatic discharge to these borrowers and believe the FUTURE Act makes this a possibility — but will require the department to undergo negotiated rulemaking," the Morabito added. The bipartisan FUTURE Act of 2019 was signed into federal law in December, and seeks to streamline parts of the federal student aid system.

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The Social Security Administration did not immediately return a request for comment Tuesday on the ombudspersons' letter.

The request for federal assistance comes after the Trump administration last August agreed to eliminate the student loan debt of veterans with disabilities. That amounts to an estimated $30,000 for each of the more than 25,000 eligible veterans.

"The debt of these disabled veterans will be entirely erased. It will be gone," President Donald Trump promised during a speech at the annual American Veterans convention in Louisville, Kentucky. "Sleep well tonight."

Trump also said in a Presidential Memorandum at the time that the discharging of loans was "overly complicated and difficult, and prevented too many of our veterans from receiving the relief for which they are eligible. This has inflicted significant hardship and serious harm on these veterans and has frustrated the intent of the Congress that their Federal student loan debt be discharged."

Winston Berkman-Breen, the student advocate and director for consumer advocacy at the New York State Department of Financial Services, said it's not only veterans but student borrowers with disabilities in general who need help. He said many of them may not know they're eligible for loan forgiveness under the law, or even if they do, aren't in a position to go through the "bureaucratic, paper heavy applications that are burdensome."

"If you're someone with a permanent disability, opening your mail can be a challenge. Working to get proof of your disability from Social Security can be a challenge," Berkman-Breen said. "So all we're doing is asking the federal government to put the same effort into civilians as they have with veterans."

Under the Obama administration, there was an effort to compare the Education Department's database of federal student borrowers with those who are also on the Social Security Administration's list of Americans with permanent disabilities. They found about 387,000 people who overlapped, and almost half were in default on their student loans.

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Through the effort, the Education Department began contacting those student borrowers about their ability to get their loans forgiven.

The ombudspersons say that is it incumbent on the federal government to continue its efforts and "reduce the number of steps these borrowers must take themselves."

Persis Yu, a staff attorney and director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, said it's "not just enough" that the Education Department is identifying borrowers who are eligible.

"We know a large percentage of folks are in default and even though the department has said they're not pursuing collections against this pot of borrowers, in the future, they could have collection actions taken against them," Yu said. "Whether many of these people don't know they're eligible, have outdated addresses or simply their disability is affecting them, the numbers show they're not being reached."