Delcia Lopez/The Monitor via AP
Most people who qualify for disability benefits, administered through the Social Security Administration, are not automatically eligible for loan discharge.
On August 19, the U.S. Department of Education announced that it will automatically wipe out $5.8 billion in student debt for some borrowers with disabilities, removing a hurdle in the bureaucratic obstacle course that keeps Americans from accessing resources they’re owed.
People who are “totally and permanently disabled” have been able to apply for loan discharge for decades. But the program is underused, since current rules make people undergo a three-year monitoring period to prove that they are poor. Approved beneficiaries have been bounced for failing to supply regular proof of low earnings. Others are deterred from applying altogether by the complicated rules.
The idea behind the new relief is simple: If you develop a work-limiting disability after taking on student loans, that debt should be automatically canceled.
“This is going to be a smooth process for our borrowers,” Education Secretary Miguel Cardona said in a press call on the changes. “They’re not going to have to be applying for it or getting bogged down by paperwork.”
But the automatic relief was confined to a small subgroup, leaving most disabled Americans still stuck in the bureaucratic morass. And even within the qualifying group, the long-delayed benefit may not reach all members.
Brain Fog and Chronic Fatigue
When Jon Aid first saw news reports last year about “long COVID”—the persistent side effects of COVID-19 that can stick around for months—the symptoms sounded familiar.
Aid contracted West Nile virus in 2006, while working as a self-employed plumber in Nebraska. Long after he recovered from the mosquito-borne illness, lasting effects crept in: brain fog, hot sweats, and, most debilitating, physical exhaustion.
“Sometimes I would have half a day that was going just fine, and then in the afternoon, it was overwhelming, like a pressure pushing down on you,” he said in an interview. “Then the brain fog would set in, with massive headaches. That would last for a few days. It would go away, and maybe not show up again for a week or two. But it was always coming back, more and more often.”
More than six years later, as the neurological symptoms worsened, Aid was diagnosed with chronic fatigue, a lasting side effect of the virus.
“Some mornings I would wake up, and I wouldn’t be able to go to work. Everything’s so heavy, you don’t even want to move. You’re not even hungry or anything, so you just lay back down in bed. I mean, I had days where I would just lay in bed for several days in a row,” Aid said. “It got to a point where I couldn’t run my business any longer.”
That point didn’t come until 2018, when Aid decided to apply for disability benefits. By that time, aged 58 and now living in Joplin, Missouri, he was also suffering from degenerative disc disease and shoulder pain. One of his arms has been operated on three times.
He was awarded around $1,300 per month. That covers his daily expenses, he said, but leaves him little to set aside toward the $36,000 in student debt he owes on behalf of his estranged son.
After signing up, Aid learned of a program to relieve student debt for people with permanent disabilities. He attempted to apply, but was told that the relief was only available for individuals who are not expected to recover from their disability.
“I’m pretty much just falling apart,” Aid remembered thinking, “so I did qualify.”
He didn’t, though. The eligibility requirement is part of a byzantine system for classifying people with disabilities, criticized for decades by the Government Accountability Office (GAO), an independent watchdog.
Relief for MINE Only
Most people who qualify for disability benefits, administered through the Social Security Administration (SSA), are not automatically eligible for loan discharge, even after the Department of Education’s recent changes to the system.
That’s because the agency has adopted restrictive administrative criteria for debt forgiveness.
When a claimant joins one of the Social Security Administration’s disability benefit programs, she is sorted into one of three categories: medical improvement is “expected” (MIE), “possible” (MIP), or “not expected” (MINE). The designations refer to how often the agency will perform a “continuing disability review,” checking that the person is still impaired.
In 2012, President Obama’s Department of Education, seeking to relieve debt for some people with disabilities, announced that MINE status was sufficient proof of entitlement for debt forgiveness.
“When the Department of Education was looking around to figure out how to use the Social Security Administration’s records, they latched on to the MINE category,” said David Weaver, an economist at the Catholic University of America who studies higher education debt.
Using the MINE category conveyed sympathy for the most severely disabled people, Weaver said, while it allowed the agency to sidestep anticipated criticism of being too generous with benefits.
But it masks the need for relief among all disability recipients, who are significantly poorer, on average, than others with student debt. Only 25 percent of beneficiaries have MINE status. Even though MINE was meant to serve a narrow purpose—review frequency—the Education Department now treats it as a proxy for severe disability.
But it’s an incoherent standard. Even people in categories like the “compassionate allowance list”—with illnesses like ALS, Huntington’s disease, and some inoperable cancers—often lack a MINE designation, and may not see their debt discharged.
An analysis contracted by SSA found that the determinations are highly subjective, and setting a date for a continuing disability review is “almost an afterthought.”
Beneficiaries categorized as MIP and MIE include individuals with severe health problems who cannot work long-term. One GAO analysis found that over the four-year period prior to the study, only 5 percent of beneficiaries in MIE improved enough to resume work. Another GAO report found that just 1.4 percent of people who left disability programs did so because SSA found that they had improved medically.
The “total and permanent disability” application process can also be an unnecessary hurdle. The discharge application carries a bolded notice warning borrowers that discharge may be taxable. A borrower with a $70,000 student loan balance in a 22 percent tax bracket, for example, might think she would owe a tax bill of around $15,000.
That hasn’t been true for more than three years, but the agency has not updated the paperwork.
The Department of Education’s reliance on these categories leaves the majority of disability beneficiaries at the discretion of a physician certification process, which often fails them.
In Aid’s case, the route was a dead end, thanks in part to private-sector meddling.
“I’ve tried to get a disability exemption, but every doctor I have now, the whole system down here in Joplin—no doctors will fill out the form,” Aid said. Other physicians Aid called around to in Missouri and Nebraska also refused.
When he pressed his doctor to explain why, Aid said, he was told that representatives from Nelnet, a major student loan servicer, have come to the doctor’s office and “harassed” the front-office staff when he has made similar determinations for previous patients.
Confused and Delayed Rollout
Federal data released in response to a FOIA request showed that as of May, 517,000 eligible borrowers in the MINE category still had not received debt discharge. The Education Department’s recent move was designed to speed relief to these borrowers.
But this month’s announcement only referred to relief for 323,000 borrowers. The department said on a call with reporters that it may have “double counted” recipients, but student debt advocates aren’t satisfied with that answer.
The Department of Education did not comment.
Student loan relief advocates don’t see the automation of debt discharge for MINE recipients as a signal that further relief is imminent. To some, it looks more like a temporary appeasement.
The measure had been put off for years.
Already in 2016, the Obama Education Department had all the information it needed from SSA to automate discharge for MINE beneficiaries, but it did not waive the application.
“For years, the department’s policy was illogical and unfair, requiring borrowers with disabilities to apply even though it had definitive proof of their entitlement to the discharge,” said Alex Elson, a former Department of Education attorney who is now vice president of Student Defense, a legal network for borrowers.
The Trump administration moved toward clearing some bureaucratic hurdles by automating loan discharge for eligible military veterans.
This latest change beats back another section of the bureaucratic gauntlet faced by borrowers. But the same mazelike system remains in place for most disabled people, because they were once shuffled into an administrative category somewhere along the line.
