From: The Honorable Seth Moulton
Join Bipartisan Letter in Support of Student Loan Borrowers with Total and Permanent Disabilities
Deadline COB: Friday, March 31st COB
Every year, tens of thousands of student loan borrowers with disabilities who have been granted a Total and Permanent Disability (TPD) discharge for their loans unexpectedly find their loans reinstated merely because they did not verify their income. For
individuals and families already struggling to keep up with medical bills and other health care costs, the reinstatement of loans previously discharged creates undue hardship and financial strain.
Encouragingly, the Department of Education and the Department of the Treasury recently signed a Memorandum of Understanding (MOU) to allow student loan borrowers to consent to multi-year, automated sharing of income tax data to determine eligibility for
income-driven repayment plans. These plans require borrowers to certify their income annually, and currently many borrowers lose their access to affordable payments because they do not successfully complete this process.
Because borrowers participating in the TPD discharge program also must comply with an annual income certification requirement, the precedent set by the MOU for income-driven repayment plans should apply to those who are totally and permanently disabled.
Please join us in sending a letter to the Department of Education and the Social Security Administration encouraging these agencies to implement tax income data sharing to ensure that the federal government can provide necessary student loan relief to disabled
borrowers and their families.
To sign the letter, or to request more information, please contact Eric Kanter (Eric.Kanter@mail.house.gov) in Congressman Moulton’s office, Adrian Anderson (Adrian.Anderson@mail.house.gov)
in Congresswoman Bonamici’s office or Katherine Loughead (Katherine.Loughead@mail.house.gov) in Congressman Costello’s office.
Member of Congress
Member of Congress
Member of Congress
March XX, 2017
The Honorable Betsy DeVos
U.S. Department of Education
400 Maryland Avenue, SW
Washington, DC 20202
Ms. Nancy A. Berryhill
Acting Commissioner of Social Security
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235
Dear Secretary DeVos and Acting Commissioner Berryhill:
We write to express our support for continued efforts by the U.S. Department of Education (Education) and the Social Security Administration (SSA) to assist student loan borrowers who have total and permanent disabilities. We are encouraged by the current
data match between Education and SSA to identify borrowers with disabilities who qualify to have their loans discharged because of their disability and notify them of their options. However, we write today because improvements are needed to ensure borrowers
who are initially approved for a disability discharge are actually able to complete this process.
Student loan borrowers may receive a Total and Permanent Disability (TPD) discharge if the Social Security Administration (SSA) or a doctor determines that an individual is unable to work because of a severe disability for which medical recovery is not expected.
Once a TPD discharge is granted, the borrower is subject to a three-year income monitoring period, during which time Education has the authority to reinstate the student loans if the borrower has substantial earnings from work.
Unfortunately, many borrowers with disabilities whom Education has already determined qualify for a TPD discharge will find their loans reinstated because of shortcomings in the current income monitoring process, which is intended to ensure these borrowers
are unable to work. According to a recent Government Accountability Office (GAO) report, “…borrowers must take action to manually submit the income verification form each year during the three-year monitoring period” regardless of the severity of an individual’s
physical or mental disability. Additionally, the report indicates that Education does not provide clear and prominent communication to borrowers that failure to submit this income verification form results in
the reinstatement of their student loans.
Every year, tens of thousands of borrowers with disabilities who have been granted a TPD discharge unexpectedly find their loans reinstated merely because they did not verify their income. We have heard from our constituents that this policy causes undue
emotional and financial hardship. As families try to cope with expensive medical bills and the declining health of a loved one, it is unacceptable that they are forced to be confronted with student loan repayments on loans that Education had already approved
for discharge. Furthermore, the SSA already collects the earnings records needed to determine whether borrowers are meeting this income requirement.
Encouragingly, Education and the Department of the Treasury recently signed a Memorandum of Understanding (MOU) to allow student loan borrowers to consent to multi-year, automated sharing of income tax data to determine eligibility for income-driven repayment
plans. These plans require borrowers to certify their income annually, and currently many borrowers lose their access to affordable payments because they do not successfully complete this process. Because borrowers participating in the TPD discharge program
also must comply with an annual income certification requirement, the precedent set by the MOU for income-driven repayment plans should apply to those who have a total and permanent disability.
Allowing Education and SSA to share earnings data with borrowers’ consent would provide significant relief for tens of thousands of families and would more efficiently maintain records of a borrower’s financial situation. Furthermore, it would save Education
unnecessary administrative costs incurred by processing paper income verification forms and carrying out needless loan reinstatements against borrowers who have little or no earnings. Under such a system, borrowers who chose to consent to an automated system
when they applied for TPD discharge would no longer need to complete an annual income verification form during the three-year monitoring period.
As your agencies continue to find ways to help borrowers with disabilities understand their options for their student loans, we ask that you evaluate the feasibility, as recommended by the GAO, of implementing an automated income verification process to
meet the income monitoring requirement. Should such a system prove feasible, we urge that it be swiftly implemented.
While working on a broader solution, Education and SSA could mitigate the effects of the current income verification process for many borrowers through improvements to the existing data sharing agreement that identifies borrowers eligible for TPD discharge.
Education requires borrowers’ earnings not to exceed the federal poverty guideline for a household of two during the income monitoring period. For most individuals receiving SSDI, the substantial gainful activity earnings threshold SSA uses to evaluate SSDI
eligibility is actually higher than Education’s threshold. As a result, continued receipt of SSDI benefits generally implies that an individual has earnings below Education’s threshold. By incorporating additional
SSA data elements into the current data sharing agreement, Education could in many cases receive sufficient information to determine that borrowers are meeting its income requirements even without sharing detailed earnings data. We urge you to explore this
Congress has long recognized that borrowers who are no longer able to experience any labor market benefit from their education because they have a disability should not be made to repay student loans. The actions described above could help fulfill this promise
and make life easier for borrowers with disabilities and their families. We appreciate your attention to this important matter.