About 25,000 permanently disabled veterans now have a path out of student loan debt thanks to a measure signed by President Trump. The executive order could save each of the veterans an average of $30,000.
According to the New York Times, Trump announced the loan forgiveness plan at the American Veterans national convention in Louisville, Ky., flanked by education secretary Betsy DeVos and deputy secretary of the Department of Veterans Affairs James Byrne.
“I am proud to announce that I am taking executive action to ensure that our wounded warriors are not saddled with mountains of student debt,” Mr. Trump said. “They have made a sacrifice that’s so great. And they’re such incredible people. And they never complain. They never complain. That’s hundreds of millions of dollars in student debt held by our severely wounded warriors. It’s gone forever.”
Debt forgiveness has been an option for permanently disabled vets since the Higher Education Act was voted into law in 1965. The act was later amended in 2008, but only ever taken advantage of by about half of the 50,000 veterans eligible. As NPR reports, a letter was sent out to those veterans during the Obama administration, but still required veterans to opt-in, filling out and submitting complex forms.
Trump’s action simplifies and speeds up the application process, and eliminates any income tax that would otherwise be charged on the forgiven debt.
“If you qualify for this because you’re a total and permanently disabled veteran, you don’t have to do the paperwork anymore,” reported NPR’s Quil Lawrence. “You can opt out if you want.”
The tax issue previously help up the Education Department from taking action in forgiving student loan debt, even after the attorneys general for 51 states sent DeVos a letter asking for such.
This measure will eliminate about $750 million in student loan debt, while the total student loan debt held by all American citizens looms around $1.6 trillion. On some cases, this debt has severely disrupted lives, resulting in wage or disability check garnishment and ruined credit scores.Whizzco