The White House has announced it will automatically erase the student loan debts for more than 300,000 Americans with severe disabilities.

According to the Department of Education, the Biden Administration's move will wipe out more than USD 5.8 billion of student debts.

"We've heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it," Education Secretary Miguel Cardona said in a statement.

The federal government offers student debt relief for people who are "totally and permanently disabled" and have limited incomes.

But the current rules require them to submit documentation of their disability and undergo a three-year monitoring period to prove they're earning little pay.

Tens of thousands of people have been dropped from the program and had their loans reinstated simply because they failed to submit proof of their earnings.