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Yesterday, President Trump announced at a rally in Louisville, Kentucky he was directing the Department of Education to automatically discharge the federal student debt for veterans with a total and permanent disability, impacting approximately 25,000 veterans. This step will provide relief to these veterans, many of whom are likely struggling to repay their debts, and it’s a much-needed step that will help thousands. But President Trump needs to do more. The Trump Administration should build on this progress and provide that same relief to the thousands of non-veterans who meet the same definition of disabled, leaving them unable to repay their loans—a right entitled to them under the same law.
Federal law provides that students who become totally and permanently disabled are eligible to have their federal student loans canceled—known as a total and permanent disability (TPD) discharge. These 25,000 veterans were already eligible for this forgiveness under this law, but disabled borrowers are required to apply for the discharge and provide needed documentation. Applying for this forgiveness can be a cumbersome process, especially for disabled people who are likely facing health issues. An effort last year to proactively identify eligible veterans and send them the application still left some borrowers slipping through the cracks. Advocates have instead called on the Department to simply cancel the debts for all eligible recipients.
The Department of Education pushed back because debt forgiven through a TPD discharge could be considered taxable income—a legitimate concern. Bipartisan legislation introduced to address this flaw by exempting the canceled loans from federal income taxes was eventually included as one small part of the GOP tax reform bill. With this fix, those same bipartisan legislators called on the Department to discharge the student debt of disabled Americans, including veterans. Additionally, 51 attorneys general pushed Secretary DeVos to use her power to discharge the debt automatically. Though it took time, disabled veterans are going to see their much-deserved forgiveness. Now, it’s time for the other disabled Americans.
Most students pay for higher education—often with student loan debt—so they can graduate and find a good job with family-sustaining wages. Students who borrow to attend are leveraging their financial future for the hope their investment will pay off with a job and salary sufficient to repay their debt. But for students who become permanently disabled and are unable to work—veterans or not—that investment stops paying off.
Forgiving the debt of disabled veteran students is the right thing to do for those who served the country, but as one of the many unique benefits in the federal loan program, the law goes further. The Trump Administration shouldn’t stop here. Federal protections like TPD discharges shouldn’t come with burdensome strings attached, especially for those Americans who are struggling the most. With the taxation problem fixed, the Department of Education should take the needed steps to identify and automatically discharge the debts of other eligible Americans.
