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AG Derek Schmidt: Department of Education should more-easily forgive student loans of disabled veterans

Release Date: May 24, 2019

Relief should be automatic, not by individual application

TOPEKA – (May 24, 2019) – Kansas Attorney General Derek Schmidt today asked the U.S. Department of Education (DOE) to automatically forgive the student loans of veterans who became totally and permanently disabled in connection with their military service.

Schmidt, along with attorneys general from 46 other states, the District of Columbia, American Samoa, Guam and Northern Mariana Islands, today sent a letter to U.S. Secretary of Education Betsy DeVos calling on the DOE to develop a process to discharge the eligible loans automatically rather than merely responding to individual applications. 

“As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us,” the attorneys general wrote. “But the Department of Education continues to require eligible veterans to take affirmative steps to secure the loan forgiveness that is their statutory right. And the requirements imposed by the Department may prove insurmountable obstacles to relief for many eligible veterans due to the severe nature of their disabilities. 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 Department of Veterans Affairs (VA) determines which veterans are eligible by law for the student-loan relief. Last year DOE identified more than 42,000 veterans determined by the VA as eligible for student-loan relief because of a service-related total and permanent disability. But by April 2018, fewer than 9,000 of those veterans had applied to have their loans discharged, and more than 25,000 had student loans in default.

Under federal law, DOE is required to discharge the federal student loans of veterans determined by the VA to be unemployable due to a service-connected condition. Although DOE currently requires disabled veterans to take affirmative steps to apply for a loan discharge, those steps are not required by law. The DOE has the authority, in its discretion, to adopt an automatic discharge process. 

The attorneys general acknowledge the federal government has taken some steps to make it easier for eligible veterans to secure student loan relief. However, they argue an automatic discharge process “would eliminate unnecessary paperwork burdens and ensure that all eligible disabled veterans can receive a discharge.” Individual veterans who wish to opt out of the loan discharge would be able to do so.

While an automatic discharge process is in development, the attorneys general propose that DOE should halt debt collection efforts targeting disabled veterans and clear their credit reports of any negative reporting related to their student loans. 

A copy of the letter sent today is available at https://bit.ly/2JBDMUr.

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