Last month, we wrote about the U.S. Department of Education program which claims to forgive the student loans of those who are unable to work because of a disability. Many people who have attempted to take advantage of this program have lodged complaints, alleging that the confusing application process, which mirrors many of the procedures used for the determination of Social Security Disability eligibility, is tedious and frustrating. Moreover, many applicants are denied with little to no explanation and even fewer possibilities for recourse.
After several years of ignoring the complaints and recommendations to alter the program, the Department of Education has begun to take note. Officials are now promising an overhaul of disability loan forgiveness, with proposed fixes for both the short and long term.
According to the department, it will begin by conducting a review of the application and approval procedures to determine whether either creates an undue burden on applicants and whether there are any quick fixes that can be made to alleviate such burdens. The department has also pledged to start sharing data with other federal agencies, including the Social Security Administration, in order to alleviate some of the burden of documentation on applicants. In addition, applicants will now have to apply for loan forgiveness only once, instead of multiple times for private and federal loans, as was previously the case.
In the long term, the department will begin an in-depth study of the program, considering whether to scrap its review process and rely on determinations made by the SSA or other federal agencies. The department is also considering combining its review with SSA procedures in order to ensure that both agencies receive the information they need.
The department has pledged to release new proposed rules by summer. It remains unclear when the new regulations will go into effect.
Source: ProPublica, “Education Dept. Pledges to Overhaul Dysfunctional Disability Review Problem”, Sasha Chavkin, 24 February 2011