WASHINGTON – In response to efforts by U.S. Senators Chris Coons (D-Del.), Rob Portman (R-Ohio), and Angus King (I-Maine), the Trump Administration has announced that they will streamline student debt forgiveness for permanently disabled military veterans. 

In February of 2018, the Senators sent a letter to urge the U.S. Secretary of Education, the U.S. Secretary of Veterans Affairs, and the Acting Commissioner of Social Security to immediately discharge outstanding federal student loans for totally and permanently disabled Americans, including veterans.

Under the recently enacted 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.  Therefore, loan forgiveness in these cases is tax exempt.  Now that Congress has removed the potential tax consequence associated with this type of loan forgiveness, the Senators are urging the Department to immediately begin discharging student loans for eligible individuals.  

The Senators’ letter is available here. In addition to Coons, Portman, and King, the letter was also signed by U.S. Senators Susan Collins (R-Maine), Tammy Duckworth (D-Ill.), and Cory Gardner (R-Colo.), along with U.S. Representatives Ron Kind (D-Wis.) and Peter Roskam (R-Ill.). 

“I am extremely pleased that the Trump Administration is taking action to discharge outstanding federal student loans for permanently disabled veterans,” said Senator Coons. “Nevertheless, we still urge the Administration to take action to ensure that all Americans who are totally or permanently disabled have their outstanding federal student loans immediately discharged.”

“I was pleased to learn that these loan discharges for veterans will be streamlined,” said Senator Portman. “We have worked on solving the problems facing permanently disabled student borrowers for quite some time, and while there remains work to be done, this announcement is a positive step forward.”

“No one in America who has become permanently disabled should have to endure the pain and financial hardship of a surprise tax bill on a forgiven loan – least of all our veterans,” said Senator King. “This is, simply, the right thing to do, and I hope that the Administration will extend the same compassion to others affected by this misguided policy.”

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