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May 18, 2016

Senate Unanimously Approves King Amendment Supporting Disabled Veterans

Amendment would help ensure that more permanently disabled veterans are able to have student loans forgiven

WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) announced today that an amendment he offered yesterday to help permanently disabled veterans has been unanimously approved by the Senate. The bipartisan amendment, offered successfully by Senator King and Senators Rob Portman (R-Ohio) and Chris Coons (D-Del.) and included in the Military Construction and Veterans Affairs (MilCon-VA) appropriations bill, would help more disabled American veterans obtain the student loan forgiveness benefits they are entitled to under current law. The Maine Bureau of Veterans’ Services, the American Legion, Student Veterans of America, and Veterans Education Success have all endorsed the amendment.

“Veterans who fought bravely for our country and are permanently disabled shouldn’t be caught in government red tape trying to have their student loans forgiven,” Senator King said. “The Senate’s unanimous approval of my amendment was the right thing to do and brings us one step closer to ensuring that disabled veterans are not stuck having to pay student loans bills they don’t have to.”

More specifically, Senator King’s amendment would require the Department of Veterans Affairs (VA) and the Department of Education to streamline the disability verification process and conduct a data match 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. For more information on the amendment, click HERE.

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.

            “While I welcome the Senate’s action as a positive step forward, it only solves one part of what is a larger problem,” Senator King continued. “Under current law, parents who lost a child or individuals who become disabled have their loans discharged only to find out later on that they still have to pay taxes on the forgiven debt. That’s not right and it needs to change. I urge my colleagues to take up and pass the Stop Taxing Death and Disability Act which I introduced with Senators Coons and Portman to ensure that no American is unfairly taxed after the death of a child or the onset of a long-term disability.”

The Stop Taxing Death and Disability Act would eliminate a tax levied on families whose student loans are forgiven after the death or permanent disability of their child. While the federal government forgives certain federal student loans in the case of the death or disability of the borrower, the Internal Revenue Service still levies an income tax on this cancelled debt which can result in tens of thousands of dollars in immediate tax liability.


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