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Ed. Dept. to Forgive Loans More Easily for Those Who Become Disabled

The U.S. Department of Education issued new rules this month that make it easier for borrowers who become disabled to have their federal student loans forgiven, Propublica and the Chronicle of Higher Education report.

The news outlets say the Education Department hasn't announced the rules publicly, but the new rules for the first time recognize findings by the Social Security Administration as sufficient to forgive student loans. The shift, the news organizations said, will allow many borrowers to avoid a lengthy double review to determine whether they truly are disabled. Federal law allows the loans of people who develop severe and lasting disabilities to be forgiven.

An investigation last year by Propublica and the Chronicle found that the department's system for evaluating disability was "erratic, duplicative and dysfunctional," and keeps many genuinely disabled borrowers buried in student debt. In the past, the department had resisted one key to addressing the problem: waiving a second review for borrowers who Social Security already found to have long-term disabilities.

From the story:

"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, 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 ... 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, 2013.

The department was pressured by disability advocates in Congress, including Democratic Sen. Tom Harkin of Iowa, the chairman of the Senate education committee, and Rep. George Miller of California, the top Democrat on the House education committee.

The changes to the loan program's rules are part of a number of proposed new and revised regulations.

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