Trump Signs Student Debt Forgiveness for Disabled Veterans

Aug 21, 2019

Credit J. Tyler Franklin

During a speech in Louisville Wednesday, President Donald Trump announced that he will sign an order forgiving federal student loan debt for permanently and totally disabled veterans.

“Today I’m proud to announce that I’m taking executive action to ensure our wounded warriors are not saddled with mountains of student debt,” Trump said. “In a few moments, I will sign a memorandum directing the Department of Education to eliminate every penny of federal student loan debt owed by American veterans who are completely and permanently disabled.”

Trump said the action will wipe out an average of $30,000 from more than 25,000 eligible veterans, “who have made immense sacrifices for our nation.”

He added that there will be no federal income tax on the forgiven debt, and asked states to waive applicable state taxes.

“Today I’m also calling upon all 50 states to waive all applicable state taxes,” Trump said. “Most of the states have already agreed to do that.”

Trump’s move comes three months after a bipartisan group of Attorneys General — including Kentucky Attorney General Andy Beshear — sent a letter to U.S. Education Secretary Betsy DeVos asking for the change in policy.

“We now urge the Department to take action to better protect those who once protected the nation,” the letter reads. “Our veterans deserve nothing less.”

The federal government already forgives student loans when debtors are totally and permanently disabled (known as TPD). But this process isn’t automatic; you have to apply for it. In the letter the attorneys general sent to DeVos, they note that 42,000 veterans are eligible to have their loans forgiven, and these veterans carry nearly $24,000 of debt each on average. But as of April 2018, fewer than 9,000 of those eligible veterans had applied to have their loans forgiven.

Joe Chenelly, the national executive director of AMVETS, said that he initially didn’t know this was an issue for veterans, and that Trump’s order closes loopholes.

“We didn’t think there would be a veteran — a fully-disabled veteran — who would have student debt,” Chenelly said. “But we were surprised to find tens of thousands who do.”

He said though veterans are supposed to get their education paid for through the GI Bill, many veterans don’t know how to use that benefit. He added many veterans who have disabilities also take longer than four years to graduate for numerous reasons.

“The GI bill can be fairly confusing if you don’t have an expert to help navigate through that process — you can get caught with a lot of student debt,” Chenelly said. “This is a huge deal for a lot of veterans: we have a holistic approach when it comes to wellness, we don’t just want to focus on keeping them not sick, we want to help them actually living well, and one of the big pieces of that is financial, which of course is directly tied to education and debt.”

While in Louisville, President Trump also talked about a range of other issues. Those included improving wait times at the VA, getting more veterans employed and decreasing veteran suicide rates  and the recently announced Space Force that would oversee the U.S. military’s actions in outer space.

This story has been updated.