Federal Postsecondary Policy
Postsecondary education policy needs to be modernized to support economic development and to be more in line with the realities of low-income working adults' lives and the needs of employers. CLASP works to align adult education, job training, and higher education policies to create pathways to marketable credentials that support stable employment in jobs that pay family-sustaining wages.
Apr 12, 2016 | PERMALINK »
U.S. Department of Education to Address Indebtedness of Student Loan Borrowers with Disabilities
The Department of Education (ED) announced today that by matching student loan records against data from the Social Security Administration (SSA), it has identified 387,000 federal student loan borrowers who, due to their disability status, qualify for the Totally and Permanently Disabled (TPD) discharge, yet continue to unnecessarily struggle with student loan repayment. Nearly 179,000 of these individuals are already in default on their loans.
To address this issue, starting next week, ED will begin notifying these borrowers – who have been determined by the SSA to be TPD, meaning their disability status will not improve – of their eligibility for loan forgiveness and provide them with an application for forgiveness that they can complete through the mail or online. CLASP encourages entities that work with individuals with disabilities to raise awareness around this issue.
This push by ED will ease the burden of student loan debt for tens of thousands of disabled borrowers and potentially forgive up to $7.7 billion. Without a TPD discharge, when disabled borrowers default, they may be subject to the Treasury Offset Program capturing their Social Security disability payments to repay their student debt. This is extremely problematic, as many recipients of Social Security disability payments rely entirely on these payments to support themselves. Nonpayment of student loans can also affect credit scores, which may make it harder for borrowers to secure housing.
Like most other federal loan forgiveness options, the loan amounts discharged through TPD may be subject to taxation. The Obama Administration’s proposed FY 2017 budget calls for excluding such discharges from taxable income; if the budget were enacted, ED could automatically discharge loans for borrowers who have been identified as TPD. CLASP encourages Congressional action to prevent disabled borrowers from having to pay taxes on any discharged amounts.
- Wayne Taliaferro | Jun 10, 2016 The Case for Redesigning State Financial Aid to Better Serve Nontraditional Adult Students
- Lauren Walizer | May 20, 2016 Federal Policy Update from Washington to the 2016 Student Parent Support Symposium
- Olivia Golden | May 24, 2016 Moving America’s Families Forward: Setting Priorities for Reducing Poverty and Expanding Opportunity
- Lauren Walizer | May 11, 2016 CLASP comments on the draft 2017-2018 Free Application for Federal Student Aid (FAFSA)
- Strategy Labs | Oct 06, 2015 Lumina Foundation Highlights CLASP Higher Ed Expert