Journalism in the Public Interest

Education Department Bureaucracy Keeps Disabled Borrowers in Debt

Borrowers who become severely disabled are entitled to get federal student loans forgiven.  But the program for deciding whether they qualify is opaque, dysfunctional, and according to government reports, redundant.

Scott Creighton of Tampa, Fla., is having his Social Security disability checks garnisheed by the Education Department to pay down his debt on student loans. Seriously disabled borrowers are entitled to get federal student loans forgiven, but the program for deciding whether they qualify is opaque, dysfunctional and redundant. (Brian Blanco/ProPublica)

This article is a collaboration among ProPublica and the Center for Public Integrity, which are independent nonprofit investigative newsrooms; and the Stabile Center for Investigative Journalism, at Columbia University.

It was co-published with the Chronicle of Higher Education.

Tina Brooks can't sit or stand for more than half an hour before the pain in her lower back becomes intolerable. She suffers severe headaches and memory loss, and she has lost most of the vision in her left eye. Five doctors and a judge from the Social Security Administration have all determined that she is fully disabled and unable to work.

A former police officer and mother of two, Brooks fractured a vertebra in her back, damaged three others in her neck, and suffered a concussion when she fell 15 feet down a steep rock quarry while training for bicycle patrol. But even though Social Security approved her disability claim, she has been mired for more than five years in an unsuccessful struggle to persuade the Department of Education to accept that she is too disabled to work again -- and to forgive the $43,000 that she borrowed in federal student loans.

"I'm a cop, and I know how to fill out paperwork," Brooks says. "But when you're trying to comply with people and they're not telling you the rules, I might as well beat my head on the wall."

Under federal law, borrowers who develop severe and lasting disabilities after taking out federal student loans are entitled to have their debts forgiven. The system was meant to be compassionate: to spare former students who become disabled from a lifetime of ruined credit, garnisheed benefits, and spiraling debt. But an investigation by ProPublica and the Center for Public Integrity has found that the process of discharging the loans of disabled borrowers is broken.

These borrowers, whose ailments often make it hard for them to navigate a complex bureaucracy, confront a byzantine system that has resulted in many applicants' being rejected for unclear reasons, and has led many others to simply give up. Despite demands for improvement from Congress, the courts, and its own internal watchdog, the Education Department has repeatedly failed to heed basic recommendations for fixing the process.

An unpublished internal report by the federal student-aid ombudsman in 2009, obtained through a public-records request, urged the Education Department to resolve "fundamental deficiencies" in the disability discharge process. It proposed changes to address the problems of "no written medical standards for determining disability," "no formal appeals process" for denials, and "undue burden and costs" on borrowers, who must obtain required medical forms from their doctors at their own time and expense. The ombudsman has twice recommended that the department consider scrapping its review altogether -- and instead contract the decisions out to the Social Security Administration or other agencies with "mature and proven processes" for evaluating disability.

None of these recommendations has been followed.

The department has been more responsive to reforms ordered by Congress and the courts, but applicants have seen little change. Congress passed a law in 2008 creating an expedited loan-discharge process for veterans and easing the standard for discharge, from a full disability that is either indefinite or terminal to, instead, five years of full disability. In 2009 a federal court in Missouri found that the program's communication with borrowers was so poor that it was unconstitutional, violating applicants' due-process rights.

In 2010 the department put into effect changes including the facilitated process for veterans and the relaxed discharge standard ordered by Congress, along with a new online system for handling submissions that allows borrowers to check their application status on the Web. It also provides more informative correspondence and a more detailed application form for borrowers, steps proposed by the ombudsman and an internal department task force.

"We know that there have been problems and shortcomings with the system and the process for some time," says a department spokesman, Justin Hamilton. "We have been working to remedy those, including the development and implementation of a new system to better serve the needs of this community."

But advocates who work with student borrowers say they have yet to see those reforms reflected in the experiences of their clients.

"They've made some improvements now, to their credit, but I think the actual, on-the-ground practice of getting information to borrowers is still the same," says Deanne Loonin, an attorney with the National Consumer Law Center and director of its Student Loan Borrower Assistance Program. "We're still seeing the same kind of problems we've seen for a long time."

Rejections Untallied

It is unclear how many borrowers seeking loan discharges are needlessly turned away, mostly because the department has released only limited data on the program. The statistics it provided show that from 2007 to 2009, the department received 174,718 such applications. About 45,000 were rejected or remained unresolved, but the data did not distinguish between the two.

The department did not provide reasons for its denials, or track how many borrowers were rejected during other stages of the lengthy assessment process.

For instance, borrowers are often rejected during an initial review by private lenders and nonprofit guarantors that are subsidized by the government. Those rejections are neither monitored nor subject to appeal within the department, despite recommendations by the ombudsman to either make the reviews more accountable or eliminate them altogether.

More than three-quarters of outstanding student debt is held by the federal government, according to statistics compiled by Mark Kantrowitz, an author and consultant on student financial aid. In the strict world of student loans, even bankruptcy is usually not sufficient reason for debts to be forgiven, and most private loans cannot be discharged for disability regardless of a borrower's condition.

The Education Department says it has to set its own high bar for debt discharge -- and not accept disability findings from Social Security -- because of the tough standard set out for it by Congress. Other agencies can always cut off benefits if a patient recovers, it says, while the decision to discharge a loan is permanent.

The department also says that it must be vigilant in protecting taxpayer dollars against fraudulent applications to cancel loans. Until 2000 the department accepted discharges made by government-subsidized lenders. It added its own review only after an audit found that some borrowers were earning wages again after receiving disability discharges.

But experts say the current system often fails to provide disabled borrowers with the relief they are legally entitled to receive.

"It certainly would be a more ethical method, and it would also be more efficient to have the student-loan discharges rely on Social Security Administration determinations instead of having a separate duplicative process," Kantrowitz says. The disability review by Social Security details the conditions that are eligible, explains how those conditions should be documented, includes a formal process for appeal, and pays for applicants to undergo evaluations by doctors.

Policewoman's Frustration

Tina Brooks's accident occurred during police training for bicycle patrol in January 2000, when she fell from her bicycle on an off-road course and tumbled 15 feet down the walls of a rock quarry. Despite years of physical therapy and a spinal-fusion operation, the back pain that resulted from her injuries got so bad that she couldn't sit, stand, or walk for more than a few minutes at a time.

In 2004 her doctors told her that her condition was permanent. She applied to Social Security for disability benefits, and in 2006 a Social Security judge ruled that she was fully disabled. Brooks thought she was done proving her disability to the government.

But canceling her student debt turned out to be far harder.

Her application to discharge her student debt had been approved by the lender and the guarantor in 2005. But soon after her disability approval from Social Security, Brooks received a letter saying that she needed to resume her payments on her student debt. It came from Affiliated Computer Services (ACS), a contractor hired by the Education Department to provide customer service and manage information for programs including the disability discharge review.

It turned out that the Education Department had rejected Brooks's application -- but she had not received notice when the decision was made, and she had not been provided with a reason for the denial.

(Findings by the Government Accountability Office and meeting minutes from the Education Department show that officials repeatedly criticized ACS's performance. In 2010 the department hired a new contractor, Nelnet, to handle disability discharges. ACS says borrowers received "a consistently high level of service" during its tenure. Nelnet says its communications and application processes are "intuitive, clear, compliant, and up to the department's high standards.")

In July 2007, on the advice of a customer service agent from the department, Brooks submitted her entire application again. This time, when she repeatedly contacted the department about her application, it told her that she had not provided enough information. Because the program has no written medical standards, no one could tell her what information she needed to provide.

"It's so frustrating to not understand what they're looking for," Brooks says. "It's like taking a college exam and it's blank, but you have to fill in the answers."

She turned to the federal student-aid ombudsman for help but was told that the department wouldn't change its decision. "Current regulations do not provide for appeal of decision made by the Department," the ombudsman wrote to her in August 2008.

So far, Brooks has been able to receive temporary deferments on her payments on the basis of economic hardship, through a separate process that is unrelated to the disability review. But the deferments are scheduled to run out this year, and she says she has no way of paying off her loans. More than $4,000 in interest has accrued during the years Brooks has struggled with the department, swelling her debt to $47,500. Citing legal obligations to protect borrowers' privacy, the department declines to comment on her case.

Anxious to avoid default, Brooks applied again in December 2010 to discharge her debt. Her application is under review, and she has been advised to expect a decision shortly.

Brooks says that she hasn't seen any improvements in the program, but that she has to keep on trying: "I don't have any other choice."

Disability Payments garnisheed

An unpublished 2008 report by the federal student aid ombudsman gave a sense of just how common such failures of communication and bureaucratic obstacles are.

The report analyzed 106 borrower complaints related to disability discharge and found that in 36 percent of those cases, borrowers' discharge applications had been rejected not because of any questions about their condition, but because their doctors had not adequately responded to requests for additional documentation.

Yet the borrowers were not told that. Instead, they received letters saying only that they were being denied because of "medical review failure." In 23 percent of the cases reviewed in the report, the borrower had already been determined by Social Security to be disabled.

In some cases, borrowers see even their Social Security disability benefits garnisheed by the federal government to pay down their student loans.

Scott Creighton, a former carpenter and draftsman living in Tampa, Fla., was declared disabled by Social Security in September 2009. Three years before, he had suffered a pulmonary embolism -- a blood clot traveled from his leg to block the main artery of his lung -- that left him unable to work a full day or repay his federal student loans.

"The claimant has the following severe impairments: deep vein thrombosis, chronic obstructive pulmonary disease, and depression," ruled Social Security Judge Christopher Messina. "Considering the claimant's age, education, work experience, and residual functional capacity, there are no jobs that exist in significant numbers in the national economy that the claimant can perform."

The Education Department is still collecting on Creighton's student loans. Soon after the judge's decision, Creighton began receiving calls from Enterprise Recovery Systems, a debt collector acting on behalf of the department. On the advice of a customer service agent, he requested a disability discharge of his debt and sent Enterprise his medical records and the Social Security judge's decision.

In November 2009, Creighton received a rejection letter from Enterprise. It said he had failed to prove that his condition had not existed when he took out his loans, even though he obtained the last of his federal loans in 1993, more than a decade before the embolism.

Enterprise told Creighton he could apply to the Education Department to forgive his loans if he would never be able to work again. But although his condition is permanent, he still hopes to work one day. Enterprise never mentioned the law easing the standard for discharge to five years of disability, Creighton says, and he decided not to submit such an application to the department.

So, for almost a year, the Education Department has been garnishing 15 percent of Creighton's monthly disability checks from Social Security to pay off his student loans. The department takes $170 out of his monthly benefit of $1,135, reducing it to $965.

"One hundred and seventy dollars may not seem like a lot, but I make less than a thousand a month on fixed income," Creighton says. "That has a huge effect on me."

Interactive timeline: Calls for Reform and One Borrower’s Struggle

Barry Schmittou

Feb. 14, 2011, 12:22 p.m.

Making matters life threatening, if you become disabled and have a disability policy governed by U.S. Title 29, the Obama and Bush administrations allowed insurance company doctors’ to ignore brain lesions of one patient, cardiac conditions, and a foot a new mother broke in 5 places, and much more, as evidenced by quotes from numerous U.S. Judges seen at

I pray ProPublica will cover this story because no one else will.

Many lives will be saved because all 150 million Americans who have health benefits through their job are at great risk if they become sick or disabled.

I presume Mr. Creighton’s smoking is part of his therapy for COPD and depression?  Don’t ask me for sympathy.

Nancy Jane Moore

Feb. 14, 2011, 4:42 p.m.

Given the rigor of Social Security disability determinations, it seems obvious that a finding of disability for that purpose should be sufficient for the student loans. It would also provide actual budget savings, because there would be no need for two reviews. That’s an easy fix in the law that would solve at least some of the problem.

Anyone who doubts that Social Security disability determinations are hard to get should note that it took Brooks two years to get one. Most people need the help of a Legal Services attorney or other professional advice to make sure they jump through all the right hoops to get the benefits they’re entitled to. If loan forgiveness is harder to get than that, the system is deeply broken.

Cecelia Smith

Feb. 14, 2011, 5:37 p.m.

I am so grateful to ProPublica for exposing the problems with the student loan forgiveness program for the disabled.  I became disabled in 2004 and forced to give up my professional career as a consultant and educator.  Since then I have struggled to live and raise my son on an SSDI income equal to 80% of the DHHS poverty guideline.  I applied twice to the US Department of Education to have my student loan forgiven according to the guidelines under the loan forgiveness for the disabled program.  The first time (around 2006), they issued a “preliminary determination” that I met the eligibility requirements for loan discharge, but then sent a rejection letter stating reasons that I didn’t understand.  Many calls and life-adjustments later, I applied a second time (in 2008).  This time they requested additional information from my doctor, which was submitted.  The application was still rejected for no logical reason.  So I gave up.  My low income qualifies me for an extended deferment, but interest on the loan continues to accrue and the debt grows by several thousand dollars each year.  I’m sending a letter to my Congressional representatives (Colorado) right this minute.  THANK YOU PROPUBLICA & CPI!!!

Fortunately, Randy Means’ sympathy isn’t worth much more than his knowledge of the issues in this article is worth.  Moreover, it isn’t even necessary or sought.. He might even be surprised that for some reason, people with mental problems seem to benefit from the effects of nicotine.
Of course, there really isn’t any Mr. Means; just someone who wants to be Mean.  One assumes that if Mr. Means has some unhealthy habit (motorcycle, skiing, surfing, road rage, etc.) that contributes to his own future problems, he will be equally willing to forgo sympathy or public assistance.

It is so easy to get on disability in NC.  I have never seen so many riding the gravy train.  One man, maybe 30, “couldn’t” work because he claimed to be bi-polar.  In short order, he was on disability and going to the gym and losing weight, he said he even might quit smoking.  The others I met were collecting and working for cash on the side.  Then there was a family of THREE collecting.  Two were in a wreck, yet got around fine, and the third was irresponsible and didn’t watch her weight.  They had money and property and could have found some way to generate an income, but why bother, the taxpayers don’t mind having the state take from their paychecks before they even get them.  The working folks don’t mind paying for the lazy & irresponsible to have big screen TVs and fancy cell phones and visits to the beauty parlor.  Yet, I have also seen a woman whose legs don’t work, working in an office, and a man with a crippled hand, working as a meat cutter, and still a third, after falling off a roof and having a serious injury and being in chronic pain, go to work using two canes to walk.

I belong to a national network of disabled people and believe me, it is not easy to get on SSDI. The paperwork is extremely detailed and difficult (even for someone with an Masters degree, like me) and you’re required to undergo extensive testing by federal examiners.  Being disabled doesn’t mean you are dead.  If its possible, many people continue to work, like the women whose legs don’t work and the man with the crippled hand.  But more likely they are forced to because they’ve been denied SSDI or its not enough to make ends meet.
The shock, pain and suffering of being disabled and having your whole life ripped out from under you, should NEVER be made light of.  SSDI recipients pay into the system all their working years.  If they didn’t pay, they are not entitled.  Until you walk in the shoes of a disabled person, Martha Cable, you haven’t a leg to stand on.  You sound like a mean, resentful person.

Maybe the system has recently been improved.  A patient brought me a form to complete (just today) to get his student loans discharged.  He’s clearly not ever going to be able to work…  I filled out the form (it just asked me to state that he is permanently disabled) and gave it to him.  It wasn’t complicated and it didn’t cost him anything as it was part of his medical visit.

Randy: I not once saw in the article where Mr Creighton smoked, maybe he did and maybe not, I don’t know but carpenters work in a lot of dust, I know I’ve been one for 38 yrs. and this (COPD) seems to me from a logical viewpoint may have been caused by the blood clot that traveled to his lung or did you inadvertently miss that part in your haste to reach your presumption. Also I didn’t see the depression thing mentioned by you. Please post where you read this stuff in the article or I guess I should say from where did you extrapolate these presumptions?

Of course the collection agency is not going to say anything. Also are they really representing the education dept or trying to collect full price on a delinquent loan that they purchased for pennies on a dollar?

Martha: Yes it is true that some people do milk the system but I also believe it’s easier to just deny something to someone and hope they go away than to disprove their story. Fraud is everywhere in our society and world. Could this be a product of socialistic policies or capitalism, as so much emphasis is put on money vs the value of life This is sad for a lot of people who actually need the help for it brings the ire of people like you and from your post you seem to lump all disabled people into your little pigeon hole. Maybe you should report these infractions but only after careful observation of these cases. Don’t let your biases influence your observations Remember Joe Friday “Just the facts ma’am.

What is interesting about the comments here is that those criticizing the people on disability are using entirely subjective, anecdotal information.  In other words, they have no medical, psychiatric or legal experience or training.  They just think that people who “look okay” must be faking and/or are gaming the system.
Comments from those who have actual experience with the system seem to uniformly agree with the premise of the article.
Don’t criticize until you’ve walked in the man’s shoes, as the old saying goes.

As was so succinctly put in an earlier comment…being disabled doesn’t mean you’re dead…although, as far as employment goes, you might as well be.  There are a few employers who will look beyond a disability and see the ability of the person applying to WORK.  Then there are those employers who are looking to hire those with “documented” disabilities so they can bring their hiring practices into ADA and EEOC compliance…it’s also good for PR and don’t think they don’t capitalize on it.  However for the most part, if you’re disabled, don’t waste your time applying for WORK during an economic down-turn, recession, depression, during the months when colleges/universities graduate classes of ever eager and ready-to-work-for-cheap-without-benefits youngsters, or if you’ve been laid-off, downsized, let-go, are over age 50 etc. etc. etc.
    I am a former active duty U.S. Marine honorably discharged.  I have a Master’s degree from an Ivy League University, I have NO criminal history.  I do have PTSD, carry shrapnel and bullet fragments in my body and will for the rest of my life, suffer from bouts of depression, am age 54 and my financial/credit history is now destroyed because I was laid-off on 25 March 2007 and haven’t been able to get hired since.  Yet I’m lucky because I can walk, talk, think clearly, and work if given the opportunity.  I put myself through Graduate School after my military service and I have student loans that I continue to struggle to pay, not always successfully…but I try as do thousands of others just like me.
    For those of you who think disabled people are milking the system, faking it, are deadbeats, are useless…take a look in the mirror, because there, but for the grace of whatever deity you believe in, go you.  A stroke, a heart attack, a seizure, a car accident, food poisoning, a disease…any of those things can strike you at any moment in your life and change it forever…thrusting YOU into the ranks of the disabled.  Good Luck.

Been There: Congratulations on your accomplishments.

Since you made reference to my comment “milking the system” I sincerely hope you are not referencing to me with the deadbeat, useless comment, for if you are I did say “some”. I do realize that at any moment anyone’s life can change. I was not being critical of people who are disabled.

My neighbor who worked for 26 years and has bad arthritis, had to beg for disability.  The young man, supposed with bi-polar, was too lazy and looking for an excuse and got disability without a problem.  I was working for minimum wage, taking care of people who didn’t want to do a thing for themselves and whined and looked for everything for nothing because they are “disabled”.  I quit that job in disgust and it paid near nothing, and had to struggle to make low pay, competing with asians who get handouts from the government, to have the state take almost as much as federal does in income tax, while another neighbor, on disability, with a side cash income sits home while I struggle to get to work in a snowstorm, hoping I don’t crash my vehicle, because I can’t afford to replace it.  All the while a man in his 30’s, who was working and got injured and has a broken back and a family to support, GETS NOTHING.  The whole system is a sham.  The man with the canes, is my cousin, who refused to go on disability, so long as he could work.  How much longer can the productive continue to support all these people who aren’t and still feed their own families?  Years ago, working in a doctor’s office, there were many on welfare, who were better dressed, with hair and nails done, than the staff in the office.  Yet a little old lady comes in with $2./wk to pay her bill.  Maybe if there was alot less fraud, those who really need it, can get it, and that is how it should be.

What the heck does “supposed bipolar” mean? 
Does the person who made that comment think that someone with bipolar disorder should look and act like a Jerry Lewis character or wear a sign around his neck that says: “Mentally Ill?”
I’m impressed with the work Pro Publica is doing but I’m appalled at the ignorant meanness of some of the people who comment?

Cecelia Smith

Feb. 15, 2011, 2:13 p.m.

Martha Cable you sound like a very resentful person.  Instead of blaming those around you, who are also perhaps resentful and disempowered, why don’t you start asking why this country isn’t providing more opportunity for people like you (and others who, like you, have fallen into the “victim mindset”) to improve their lives?  At no time since the great depression has there been this big a gap between rich and poor.  Those who have, want more and will, apparently, go to any length to suck every last drop of wealth and potential they can get out of Mainstreet.  Exposing problems with the system that affect many people - working for REAL change like ProPublica is doing - makes a positive difference.  Whining and blaming others even less fortunate than you…..tell me how that helps?

well i feel for anyone on social security or trying to get on in arizona. i had a friend turned down 5 times and myself the judge was totally slanted by my 20 year old college degree and that was the end of the line thankfully i had worked for a railroad long enough that i finally got railroad disablity after 4 years now with no cost of living increases ive had to cut back everywhere

Cecelia, why does the country “have to provide”?  How about a government “by the people, for the people”?  How about the government stop taxing us at every turn, yet allowing corporation free rein to do as they please?  Corporations don’t pay taxes, they pass it on to the final cost of their product. The gov. continues to stack the deck against the middle class.  How about replacing laws that reward employers for outsourcing and shipping companies to foreign shores and keep these jobs here?  How about sending the illegals home so that employers have to pay a living wage to Americans?  Greedy contractors hire them for cash and undercut the legal, responsible business owner who pays all the required taxes for their employees.  Corporations own this country and have us all scrambling to take whatever low-paying job we can get.  The factory with the asians is owned by a former congressman who pushed throught the immigration act of ‘65,. obviously to guarantee himself a cheap labor force, subsidized by the taxpayers.  The asians there did not assimilate, nor do they do anything civicly for anyone outside their own community.  One had been here for 40 years and couldn’t speak english.
And the bi-polar guy, couldn’t take meds to go to work, but yet is fine to go to the gym?  He is fine to go hang out and BS all day?  He had a good job at a good company, but really didn’t want to work.  He’d sit and whine every day after work how his boss doesn’t understand him.  He has a son who will now learn that it is normal to be on the dole, and another generation will need to be provided for.  I know of cases where there are generations of families on welfare.  Why work if they can get a check in the mail?  Many times these folks on welfare are out stealing from those who are at work trying to earn a living.  (This I was told by folks in the factory who live in the hood.  Oh, I must be so PC, and not offend anyone).  It seems to me that greed and laziness is destroying this country.  Productivity is punished by the government by taking more and more in taxes from those stupid enough to think that being productive is good.  What happened to personal responsiblity?

Martha: Productivity was ‘punished’ by corporations who downsized and moved overseas = not by the gov.

“Personal responsibility” is the BS that is used to pit working people against EACH OTHER and makes sure that we do NOT look at the ‘personal responsibility’ of the corporations, ultra=wealthy, bankers/hedge-fund managers, etc. who have gotten 90% of the wealth that our increased productivity has provided for them.

The issue was students who have been declared disabled by SSA are having their SSD garnished, as they will garnish Social Security, BUT they DON’T tell you that the LENDERS never have to apply ANY of your payments to the principal, you can NEVER declare bankruptcy, you will lose your licenses to work, you can be hounded at work, your spouse’s estate/retirement/savings can be tapped, and YOU HAVE NOT ONE LEGAL RECOURSE, no appeal, no remedy, no credit for what you have already paid. 


Apparently, Sallie Mae recently settled a class action suit based on the use of debt collectors that were making endless robo-calls to student loan debtors, in violation of federal law.  They’re playing hardball.

“Country” isn’t just government, it’s the whole enchilada.  Interesting, I agree with much of the first part of your comment Martha Cable but then (again) you fall into blame and resentment towards “others”, be they Asian American, disabled, “illegals”, etc.  Since when were English speaking white people the only true “Americans”?  Read your history. You talk about personal responsibility and then blame.  How about working to change the system?  If we demand corporate and government accountability and restoration of democracy, maybe, if enough of us do it, we’ll actually see some change for the better.  Blaming and sending the “other” away isn’t going to change a thing.  We live in a globalized world where we compete with workers living IN India, China, etc.  As we are seeing in the Arab world, improving human rights for ALL is the only way to help ourselves.  Pitting “us” against “them” just perpetuates the Corporate Debt Slavery System, as Dorothy says!

This article is part of an ongoing investigation:
College Debt

College Debt

Total outstanding college debt is estimated at $1 trillion dollars – and with costs still soaring, the burden on students and their families shows no signs of abating. We're examining how the complicated system of college debt is putting the squeeze on families.

Share Your Story

Your input can help ProPublica's reporting.

Have you worked in financial aid or student loans? Tell us about your experiences.

Do you have student loans? Share your story with us.

Icon graphics courtesy of the Noun Project.

Get Updates

Our Hottest Stories