The Education Department (ED) announced plans to cancel about $1.3 billion in student loan debt for 41,000 borrowers who had previously qualified for discharge but failed to receive it because of incomplete paperwork and waived certain procedures for another 190,000 borrowers.

“Borrowers with total and permanent disabilities should focus on their well-being, not put their health on the line to submit earnings information during the COVID-19 emergency,” Education Secretary Miguel Cardona said in a statement. “Waiving these requirements will ensure no borrower who is totally and permanently disabled risks having to repay their loans simply because they could not submit paperwork.”

Some borrowers will now see their cancellations go into effect without them having to submit additional earnings documentation during the pandemic. If they made any payments between March 2020 and now, they would also be refunded that money. And about 190,000 borrowers who are in the three-year monitoring period wouldn't have to submit earnings documents going forward to qualify for a discharge.

Some experts in the space noted that the policy was misguided in the first place.

"This is really a tiny step and one that honestly shouldn't have even been necessary," Persis Yu at the National Consumer Law Center told Yahoo Finance. "It's pretty outrageous that the department allowed these loans to be reinstated during the pandemic in the first place. ... so while it's important that they're doing this action, it's not so much a cause for celebration."

For a borrower to qualify for a total and permanent disability discharge under current law, they'd have to submit an application form and then provide documentation of their earnings for three years for consideration. If they miss out on paperwork during this three-year monitoring period, their debts would be reinstated.

According to one report, around 400,000 borrowers across the country in 2019 technically qualified for a total and permanent disability discharge. But since the process is opt-in and they would need to apply to ED to get cancellation, Yu noted, they've missed out.

"We are talking about by definition, about a population that has disabilities, and some of those disabilities are cognitive, like ... traumatic brain injuries," Bethany Lilly, co-author of the report and senior director of income policy at The Arc, told Yahoo Finance. "There's a chunk of this population that isn't going to be very good at paperwork."