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Education Department to revamp disability rules

On behalf of Jeffrey Rabin of Jeffrey A. Rabin & Associates, Ltd. posted in SSD on Thursday, July 26, 2012.

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Imagine having student loan payments that you are barely able to keep up with. Then you get sick or in an accident, and suddenly you have mounting medical expenses, and are unable to work. Shouldn’t your loans be forgiven if you are genuinely disabled?

The answer is “yes” and federal laws are supposed to eliminate debt for those with lasting disabilities. But, the Education Department is finding out, it doesn’t always work that way. While those relying on disability payments certainly cannot afford to pay back student loans, some of them have seen their debt mounting.

The Education Department hopes to change that and is revamping its system. Proposed changes include making clearer lines of communication for borrowers and streamlining the process of applying to have student loans forgiven due to disability.

One idea was to tie the application process directly to the Social Security Administration’s standards for disabilities so that some disabled borrowers could skip the application process completely. The Education Department rejected this suggestion, however.

There are other notable changes the department may implement, including allowing a borrower to nominate a representative, such as an attorney, to handle all communication. The department would also have to issue detailed replies to applicants explaining why their application was rejected. As it is now, some people get little or no explanation, which can be exceptionally frustrating.

While the changes should help in the long run, some are disappointed the department won’t use the same standards as the SSA, which could help applicants avoid, as one consultant puts it, “jumping through the same hoops twice.”

Source: Huffington Post, “Disability review program broken for student loan forgiveness, under review by Education Department,” Sasha Chavkin, July 19, 2012

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