Student Loans: New Rules for Disabled Borrowers Are Big Breakthrough


Under federal law, someone who becomes severely disabled after taking out student loans is eligible to have their debt forgiven. But until recently, they’d have to jump through bureaucratic hoops to do so, even if they’d already gone through an essentially identical process to receive Social Security benefits.

Under a new set of rules, adopted earlier this month, the Education Department will recognize Social Security award letters as proof of disability, streamlining the process immensely. An investigation into the Kafka-esque nightmare of the original process by ProPublica and the Chronicle of Higher Education prompted an internal review by the Education Department, leading eventually to the much-needed reform, which will go into effect on July 1, 2013.

Inefficiency and a lack of clarity is one of the major problems with the system of student loans in this country (and there are many). Figuring out the best repayment plan, or which benefits are available, is such a daunting task that many people end up paying far more than they have to, simply because they’re confused or overwhelmed by the vast field of dense, jargon-filled documents.

And beyond the student loan conversation, lack of communication between government organizations causes not only headaches for citizens, but waste in government. One of the issues President Obama campaigned on the first time around was redundancy in government – multiple agencies repeatedly reinventing the wheel rather than sharing information and resources. Slimming down by finding and eliminating the overlap between various agencies would free up some much needed revenue that could be put toward deficit reduction and/or social programs.

The Education Department was initially resistant to changing the procedure for discharging disabled borrowers’ debts, despite pressure from advocates and lawmakers.

“It was not until nearly 3,000 public comments poured in, most of them including pleas for the department to recognize Social Security findings, that it began to reconsider its position,” Sasha Chavkin of ProPublica wrote of the Education Department.

It’s pretty impressive that the Education Department actually listened to the concerns of the people who pointed out to them how inefficient their process was. Hopefully this success will inspire consumers, organizations like ProPublica, and government agencies themselves to look critically at the way things are done and find ways to streamline.