The U.S. Department of Education announced last week it would wipe out $5.8 billion of student loan debt held by 323,000 borrowers who have a total and permanent disability (TPD). Eligible debt holders won’t even need to apply for the forgiveness: The Biden administration will automatically discharge the loans in September by using Social Security Administration records to identify those people who are listed as disabled.
This marks the third round of student debt cancellation issued by the Biden camp since moving into 1600 Pennsylvania Avenue. The previous rounds were for borrowers who attended schools like ITT Technical Institute and Corinthian Colleges that the Department of Education determined used deceptive or illegal practices.
In total, the Department of Education has approved cancelling $8.7 billion in student loan debt held by more than 450,000 borrowers.
But in the grand scheme of things, that’s only a tiny percentage of all U.S. student loan debt. Indeed, the $8.7 billion amounts to less than 1% of all student loan debt. As of the second quarter of 2021, U.S. borrowers hold more than $1.73 trillion in student loan debt.
