[tabi] Education Department Adopts Crucial Reform for Disabled Borrowers

  • From: Victor Panoff <islandsdog@xxxxxxxxx>
  • Date: Mon, 19 Nov 2012 06:36:10 -0800

This related information may be of interest

Education Department Adopts Crucial Reform for Disabled Borrowers

Education Department Adopts Crucial Reform for Disabled Borrowers
by Sasha Chavkin<http://www.propublica.org/site/author/sasha_chavkin/>
ProPublica, Nov. 15, 2012, 10:19 a.m.

A student walks near Royce Hall on the campus of UCLA on April 23, 2012, in
Los Angeles. After our investigation and public pressure, the Education
Department has conducted a sweeping overhaul of its troubled disability
review program for student borrowers.
The Education Department enacted a crucial reform on behalf of borrowers
who become disabled, issuing new rules earlier this month that make it
easier for these borrowers to get their federal student loans forgiven.
The rules [1], which the department has not publicly announced, for the
first time recognize certain disability findings by the Social Security
Administration as sufficient grounds to discharge student loans. This will
allow many borrowers to avoid a lengthy double review to determine whether
they are truly disabled. Under federal law, borrowers who develop severe
and lasting disabilities are entitled to get their loans forgiven.
The reform came after an investigation<
[2] early last year by ProPublica and the Chronicle of Higher Education
found that the department's system for evaluating disability was erratic,
duplicative and dysfunctional, and was keeping many genuinely disabled
borrowers buried in student debt. The department subsequently promised to
revamp the program, but had previously resisted the key reform<
[3] of waiving a second review for borrowers who Social Security had
already found to suffer from long-term disabilities.
"They are really trying to get this right," said Deanne Loonin, an attorney
with the National Consumer Law Center and the director of its Student Loan
Borrower Assistance program<http://www.studentloanborrowerassistance.org/>
[4], who has been a persistent critic of the program.
Loonin said that the reforms made by the department are "all positive," but
that the key question is whether the new rules are implemented effectively.
She has estimated that two-thirds of her clients have some kind of Social
Security determination.
The new guidelines establish an array of changes that, in combination with
the acceptance of certain Social Security findings, represent a sweeping
overhaul of the program. These include streamlining the application process
by creating a single form and point of contact in the department, improving
communication with applicants to better explain denials, and creating a new
role for lawyers and family members of disabled borrowers who wish to serve
as their representatives. The reforms will go into effect on July 1,
The department's reversal on Social Security findings came as a surprise to
observers — and followed a lengthy campaign by advocates and lawmakers to
convince the department to overhaul its process.
In May 2011, Sen. Tom Harkin, D-Iowa, chairman of the Senate's Health,
Education, Labor and Pensions Committee, and Rep. George Miller, D-Calif.,
the ranking Democrat on the House Committee on the Education and the
Workforce, wrote a letter to the Education Department<
[5] calling on it to fix the disability discharge program in light of the
problems identified by ProPublica's investigation.
This past summer, the department proposed new rules<
[6] that revamped major elements of the program. But it insisted that its
legal mandate did not allow it to accept disability findings by Social
Security. 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. The comments included a
letter signed by more than a dozen consumer and civil rights organizations
and a letter-writing campaign organized by The Institute For College Access
and Success<http://ticas.org/about.vp.html> [7].
After receiving the comments, the department opened talks with Social
Security and became convinced that its standard for forgiving loans could
be tied to the Social Security designation Medical Improvement Not
Expected, which is used to denote long-term disabilities. "We needed a high
comfort level," said Gail McLarnon, the director of policy coordination in
the department's Office of Postsecondary Education. "These are student
loans, there's a lot of money on the line here."
She said the department's decision to heed popular demand was an "example
of public comments working exactly as it should."
When the new system comes into effect, disabled borrowers will be able to
submit award letters from Social Security as proof of their disability. If
the award letter says the beneficiary is not scheduled for a medical review
for at least 60 months — five years — that means that the borrower has a
long-term disability and is immediately eligible to discharge federal
loans. (Social Security award letters simply tell you how long it will be
until your next disability review, not that they have classified you as
"Medical Improvement Not Expected.")
Borrowers with more frequent Social Security medical reviews — which
correspond to the categories "Medical Improvement Expected" and "Medical
Improvement Possible" — will still have to undergo a medical review by the
Education Department in order to discharge their loans.
1.       https://www.documentcloud.org/documents/515166-2012-26348.html
4.       http://www.studentloanborrowerassistance.org/
7.       http://ticas.org/about.vp.html

Victor P

On Sunday, November 18, 2012, Chip Orange wrote:

> Hi all,
> I happened to come across an article describing a new student loan program
> offered by the federal government, and one interesting aspect of the
> program
> is that you can get a portion of your loans forgiven if you spend 10 years
> working in a "public service" career for a qualifying government or
> non-profit employer.  One of the specifically mentioned types of employers
> are those who serve the disabled or the elderly.
> You can find further details in the downloadable article at:
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1014622
> Make note that note only does your employment career and employer have to
> qualify, but the type of loan that you take out originally must also
> qualify.
> hth,
> Chip
> _______________________________________________
> fcb-l mailing list
> fcb-l@xxxxxxx <javascript:;>
> http://www.acb.org/mailman/listinfo/fcb-l

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