President Donald Trump signed an executive order Wednesday canceling student loan debt for all permanently US disabled war veterans.
What We Know:
- The executive order calls for an “expedited” loan process for disabled veterans to allow student loan debt to be discharged “with minimal burdens.” Also, the bill will exempt the eligible veterans from paying federal income tax on these government loans. This legislation is an improvement on the current program called Total and Permanent Disability Discharge which was excessively complicated, resulting in only 20 percent of the eligible pool of veterans taking advantage of these loans.
- Trump signed the order after speaking at the American Veterans National Convention; “The debt of these disabled veterans will be completely erased. That’s hundreds of millions of dollars of student loans debt for our disabled veterans,” Trump said. The order will affect around 25,000 veterans, saving them from an average of $30,000 in debt.
- The legislation is considered a response to a recent letter signed by 53 state attorneys general urging Secretary of Education Betsy DeVos to discharge the student loans of disabled veterans. “As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us,” the letter read. “Because America’s veterans deserve better, we ask the Department to develop an automatic discharge process to ensure that all eligible veterans can have their student loans forgiven.”
- The letter also mentions the Higher Education Opportunity Act of 2008 signed by President George Bush, which requires the government to discharge veteran education loans “if a student borrower…dies or becomes permanently and totally disabled.” Furthermore, it identifies over 42,000 eligible veterans in need of this support and accuses the Education Department of being too hung up on the tax implications of implementing this large-scale debt forgiveness.
- Trump’s administration just hired student loan industry executive Robert Cameron as the Consumer Financial Protection Bureau’s student loan ombudsman; in this job, Cameron will help to protect people with student loans from being exploited by the industry.
Many presidential candidates like Bernie Sanders have also discussed the importance of educational debt forgiveness in fostering opportunity.
