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Nearly 400,000 Disabled Borrowers May Have Student Loans Forgiven

Hundreds of thousands of borrowers who are permanently disabled could have an estimated $7.7 billion in student loans forgiven, the Department of Education announced Tuesday.

Starting next week, the Department of Education will send letters to 387,000 people who have been identified as eligible for what is called a "Total and Permanent Disability" loan discharge because they are disabled and cannot work. The Department of Education and Social Security Administration worked together to identify borrowers who have been receiving disability payments and are eligible to have their loans discharged.

Those borrowers will now be able to bypass the traditional disability discharge process, which requires proof of their disability, and instead just fill out and sign the application in the letter they receive from the Department of Education.

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The move is part of President Obama's Student Aid Bill of Rights — a push to help Americans get a handle on onerous student loan debt.

"Too many eligible borrowers were falling through the cracks, unaware they were eligible for relief," Education Under Secretary Ted Mitchell said in a statement.

He described the case of one woman whose breast cancer treatments left her permanently disabled and unable to work. It took her seven years of repeated attempts to finally get a disability discharge.

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"Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due."