Senators Collins, King Join Bipartisan Call for Immediate Discharge of Outstanding Federal Student Loans for Permanently Disabled Americans

Washington, D.C. — U.S. Senators Susan Collins (R-ME) and Angus King (I-ME) joined Chris Coons (D-DE), Rob Portman (R-OH), Tammy Duckworth (D-IL), and Cory Gardner (R-CO), along with U.S. Representatives Ron Kind (D-WI), Brian Fitzpatrick (R-PA), Jim Langevin (D-RI), and Don Young (R-AK), in sending a letter urging U.S. Secretary of Education Betsy DeVos, U.S. Secretary of Veterans Affairs Robert Wilkie, and Commissioner of Social Security Andrew Saul to immediately discharge outstanding federal student loans for totally and permanently disabled Americans.

 

Under the 2017 Tax Cuts and Jobs Act, federal student loans that are discharged by the Department of Education due to the death or total and permanent disability of a borrower or the death of a borrower’s child are no longer required to be included in the gross income of the borrower. Since Congress has removed the potential tax consequence associated with this type of loan forgiveness, the Senators and Representatives have been urging the Department to automatically discharge outstanding federal student loans for totally and permanently disabled Americans, including veterans.

 

In response to these efforts and efforts of other members of Congress, on August 21, 2019, President Trump signed a Presidential Memorandum that directs the Secretary of Education and Secretary of Veterans Affairs to discharge federal student loan debt for totally and permanently disabled veterans. However, the memorandum does not apply to tens of thousands of totally and permanently disabled individuals, many of whom will continue to carry student loan debt which they are legally entitled to have forgiven.

 

“On this issue, the bottom line is simple: Now that Congress has removed the tax consequence associated with loan forgiveness, the U.S. Department of Education should automatically discharge outstanding federal student loans for all totally and permanently disabled Americans,” wrote the Senators and Representatives.  “These Americans should no longer face costly delays or bureaucratic barriers to receiving a benefit that they are entitled to receive under the law.”

 

"Hundreds of thousands of disabled Americans are entitled to immediate student loan discharges under the law, but the Department of Education is not giving them relief, and in many cases is even seizing the disability benefits they depend on to survive.  We deeply appreciate this bipartisan effort to ensure that these men and women are not forgotten, and join in their call to the Department to act without further delay," said Student Defense Senior Counsel Alex Elson.

  

Click HERE to read the letter.