51 attorneys general call on Betsy DeVos to cancel up to 42,000 disabled veterans’ student debts – USA TODAY
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WASHINGTON — In a letter sent to Education Secretary Betsy DeVos on Friday evening, 51 attorneys general called on the Education Secretary to automatically cancel disabled veterans’ student debt, something that is not currently done by the Department of Education.
“We write to…urge the Department of Education to take prompt action to satisfy its statutory mandate to discharge the student loans of veterans who are permanently and totally disabled or otherwise unemployable,” wrote the attorneys general. “As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us.”
The group included attorneys general from 47 states, three territories, and the District of Columbia. Alabama, Arizona, and Texas did not sign on.
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In April last year, DeVos announced a new partnership between the Departments of Education and Veterans Affairs that would match borrowers in the Department of Education’s records system with disabled veterans in the Department of Veterans Affairs records system.
People deemed eligible for loan discharges would be mailed a letter including an application for “totally and permanently disabled” (TPD) status. Under the Higher Education Opportunity Act of 2008, if student borrowers die or become permanently disabled, they are eligible to have their loans forgiven, so a successful granting of TPD status would allow for the complete discharge of student loans.
The attorneys general argued that automatically canceling the student debt would benefit veterans whose severe disabilities might prevent them from filling out the necessary forms.
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Education Department spokesperson Liz Hill told Politico that “while ‘automatic discharge’ may seem like a simple solution, there are long-term impacts we want all veterans to have the chance to consider before their loans are discharged.”
Hill also cited “potential state and local tax liabilities” that could burden veterans after their loans were forgiven and veterans’ potential inability to take out other student loans in the future if their current ones were forgiven.
Anticipating this criticism, the attorneys general wrote that “we think it likely that most borrowers would prefer to have one hundred percent of their outstanding loans discharged, even if this resulted in an increase to their state tax bill,” though they considered adding a way to opt out of the automatic loan forgiveness.
According to a FOIA request filed by Veterans Advocacy Succes, an advocacy group, with the Department of Education, more than 42,000 veterans are eligible for TPD status, but fewer than 9,000 people had applied as of the beginning of May 2018, More than 25,000 eligible veterans were in default.