USDA Debt and Discrimination Relief

On October 18, 2022, USDA made an announcement regarding the first of several phases of critical debt relief assistance to farmers. A second announcement was made on March 1, 2023 detailing the next phase of debt and discrimination relief. Here is a summary of what debt relief has already occurred and what farmers may expect next. 

To receive more breaking updates via text about the implementation of USDA debt and discrimination relief and how to access these programs, text the word “RELIEF” to our text line: 866.513.2803

Implemented Debt Relief 

  • With funding through the Inflation Reduction Act (IRA) Section 22006, USDA has automatically applied $800 million to FSA direct and guaranteed borrowers who were classified as delinquent (60 days or more behind) to make their loans current AND cover the next annual payment for direct loan borrowers.  
  • Farmer borrowers who had their farms foreclosed on and still had remaining debt have had this debt resolved in order to end debt collections and offsets (a type of garnishment).

Upcoming Debt Relief

  • With remaining pandemic assistance funds, USDA will provide debt relief to more complex farmer cases such as:
    1. Farmers who refinanced in order to avoid becoming delinquent borrowers,
    2. Distressed farmers or those who are at risk of loan default (This may require farmers to initiate the process with FSA. RAFI-USA will share more details when we have them.), 
    3. Those who lost their farm and still have wages garnished due to insufficient collateral to cover remaining debts
  • USDA is working with the IRS to find ways to reduce the tax burden for farmers who received debt relief payments.

Discrimination Payments Program: Under Construction

Under Section 22007 of the IRA, FSA loan borrowers may also be eligible for discrimination payments. USDA conducted a public comment period, now closed, on how this program should be structured to provide payments to farmers who have experienced discrimination through FSA’s lending process. Read RAFI-USA’s comment here.

March 1, 2023, USDA announced it opened solicitations for one National Administrator and four Regional Hubs that will develop the discrimination payment program structure. USDA will make final selections in late Spring with the hopes of opening applications for farmers by the end of 2023.

NOTE: Our current understanding is that all of these debt relief and discrimination payments will be considered taxable income. On December 9th 2022, Senator Booker introduced a bill to make all IRA debt relief and discrimination payments non-taxable, but it was not incorporated into the year-end budget bill.  To ask your legislators to support this bill click here.

If you’ve received or expect to receive a USDA debt relief payment, consult your tax advisor on the best way to proceed for your personal situation.

Wondering if you’ve received debt relief already? 
Want to apply for upcoming debt or discrimination relief? 
Here’s what you can do next:

  1. Sign up for text updates from RAFI-USA regarding USDA debt and discrimination relief. To do so, text the word “RELIEF” to our text line: 866.513.2803
  2. If you have an FSA direct or guaranteed loan, call your local FSA office or guaranteed lender and ask for the current status of your loan.
  3. If you need further assistance with your case, call the RAFI-USA Farmer Hotline at 866.586.6746, Monday-Friday, 9:00 a.m.-6:00 p.m. 

Read More:

Inflation Reduction Act Section 22006 – USDA Fact Sheet

  • A full summary of USDA’s first phase of assistance for distressed borrowers

USDA Press Release – March 1 announcement

  • Press release regarding loan payments made and upcoming discrimination relief

USDA Press Release – Oct 18 announcement

  • Press release regarding loan payments made and upcoming debt relief

USDA’s Request for Feedback – Comments Submitted

  • Read public comments on how Section 22007 funds should be used to provide payments to borrowers who experienced discrimination in the FSA lending process. (Comment period now closed.)
Ask your representatives to co-sponsor the Agriculture Resilience ActSend a message now