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Advocates push to forgive $8B in student debt held by disabled borrowers

Yahoo Finance reporter Aarthi Swaminathan joins the Yahoo Finance Live panel to discuss the latest with student loan forgiveness for disabled borrowers.

Video Transcript

- Well the Biden administration is facing growing pressure to act more aggressively when it comes to student loan debt. Advocacy groups this time honing in on a specific group talking about totally and permanently disabled borrowers. Yahoo Finance's Aarthi Swaminathan is following that story for us. Aarthi, what kind of amount are we talking about when we talk about forgiveness?

AARTHI SWAMINATHAN: Yeah, so we got hands on new FOI data, Freedom of Information request submitted data, by The Student Defense, one of the advocacy groups that was involved, and 818,000 borrowers are actually eligible for TPD, Total and Permanent Disability discharge since 2016. That's a really big number, but consider the fact that only 300,000 have actually gone on to get a full discharge on their student loan debt.

That's about $8.8 billion, but 517,000 borrowers are still waiting, even though they qualify. So it's really, really interesting because according to congressional law, they are entitled to a discharge because their situation is not likely to improve and they won't be able to take on higher paying jobs to pay their debt. So it's really a very strong case that these advocates are putting forward.

- Well Aarthi, I know you cover this space assiduously. Can you broaden out the discussion here? Where are we on student loan forgiveness in the US?

AARTHI SWAMINATHAN: So the debate right now is still going on about whether it's regressive or progressive. We haven't heard much from the Biden administration or the education department on whether they are doing it. So now we're sort of looking at why they are still thinking about this. And the question is whether people with more debt going to benefit. People holding higher balances, meaning people who have higher degrees and graduate students are low income people who the people we are concerned about are they going to benefit? So the debate is sort of still in the mix between academics and all these different people. So that's why it's taking some time it seems to get a definitive answer.