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May 17, 2016

King Introduces Amendment to Relieve Disabled Veterans of Unnecessary Student Loan Payments

WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) today offered an amendment to pending Senate legislation that would help more disabled American veterans obtain the student loan forgiveness benefits they are entitled to under current law. The bipartisan amendment, filed by Senator King and Senators Rob Portman (R-Ohio) and Chris Coons (D-Del.) to the Military Construction and Veterans Affairs (MilCon-VA) appropriations bill, would require the Department of Veterans Affairs (VA) and the Department of Education to streamline the disability verification process to ensure that any veteran who is permanently disabled is discharged of their federal student loan debt. Such a discharge is allowed under current law, but the lack of coordination between the Education Department and the VA is leaving behind potentially thousands of veterans who could otherwise have their loans discharged.

“Like so many Americans, a large number of our veterans have to take out student loans in order to further their education and pursue their dreams. And when they experience a life-changing disability while serving our country, the government can and should forgive that federal student loan debt,” said Senator King. “But the current loan forgiveness process only adds confusion and creates difficulty during an already challenging period for our veterans. By simply streamlining the interaction between the Department of Veterans Affairs and Department of Education, this amendment would help identify veterans eligible for this benefit and ensure that they are able to receive the student loan relief they deserve.”

The Maine Bureau of Veterans’ Services also endorsed the amendment:

“We are enthusiastically in support of Senator King's amendment,” said David Richmond, Deputy Director of the Maine Bureau of Veterans' Services. “This innovative approach is long overdue and will make an enormous financial difference to many combat-wounded veterans in Maine and across the nation.”

The Higher Education Act allows student loan borrowers who develop a permanent disability to have their federal student loans forgiven by the Department of Education. This student loan forgiveness also applies to veterans who have been determined by the VA to be unemployable due to a service-connected disability. To verify an individual’s eligibility for student loan forgiveness under the law, the Department of Education requires documentation from the Social Security Administration (SSA) or the VA regarding the borrower’s disability status. However, many disabled Americans have found the process to discharge these loans confusing and burdensome, discouraging them from following through with the process and leaving them to pay student loans they otherwise would not have to under law.

Just last month, the Department of Education and SSA conducted a data match that resulted in the identification of approximately 389,000 Social Security Disability Insurance beneficiaries who are eligible for discharge of their federal student loans – nearly half of whom were in default on their loans. Senator King’s amendment would require the VA to do a similar data match with Department of Education to ensure that no disabled veterans are being denied the benefits for which they are qualified.

The American Legion, Student Veterans of America, and Veterans Education Success have endorsed the amendment. This amendment complements related efforts by Senators King, Portman, and Coons to end an existing tax penalty on families and disabled individuals after they have student loans forgiven.

The Fiscal Year 2017 MilCon-VA spending bill would fund critical services for America’s veterans through the VA, as well as infrastructure projects at VA and U.S. military facilities.


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