22 leading Veterans and Military Service Organizations submitted a public comment to the US Education Department thanking the Education Department for moving forward with a process to ensure totally and permanently disabled (“TPD”) veterans’ legal right to loan forgiveness is honored. The letter also requested the Department keep the process running smoothly and alert Veterans and Military Organizations of any delays, given media reports of a delay; alert veterans to the state tax implications; and – most important – make whole those veterans who were wrongly put in default on loans that should have been forgiven, impacting their VA benefits, tax refunds, and access to credit.

January 27, 2020

Secretary Betsy Devos

US Education Department

Office of Postsecondary Education

400 Maryland Avenue SW

Washington, D.C. 20202-2241

RE: Comments on Total and Permanent Disability Discharge of Loans Under Title IV of the Higher Education Act; Docket ID ED-2019-FSA-0115.

Dear Secretary DeVos:

The undersigned organizations, collectively representing millions of members, veterans, military families, and survivors, wish to thank President Donald J. Trump for signing, and you for putting into action, a Presidential Memorandum that will significantly streamline the process to erase federal student loan debt for totally and permanently disabled veterans. Through the Total and Permanent Disability (TPD) Discharge process, veterans who have been determined by the Department of Veterans’ Affairs (VA) to be 100 percent service-connected disabled or deemed Individually Unemployable (IU) will now have their student loan debt automatically discharged by the U.S. Education Department (ED) unless they decide to opt-out.

We appreciate ED’s collaboration with VA to identify the approximately 25,000 veterans currently eligible for automatic loan forgiveness, and for continuing the review on a quarterly basis.

We are aware of recent media reports about unexpected delays faced by implementing the Presidential Memorandum. In order to stay fully up to date on the status of the program, we would appreciate quarterly in-person meetings to help us better inform our members and to identify any potential problems before they can negatively impact those who we represent.

Also, we ask that ED make it clear to these severely disabled veterans what the state tax implications might be. In December of 2018, only 9 states did not follow the federal rule on the discharge of student loan indebtedness due to death or disability. It would be a minimal task for ED to have a subject matter expert stay on top of state tax implications and convey that information to veterans so they can make an informed decision.

Further, we ask you to work with the Treasury Department and VA to “make whole” the veterans who were wrongly put in default, in violation of their legal rights. In November of 2018, ED’s records indicated that over half of TPD-eligible veterans were wrongly put in default of federal student loans that they were eligible to have forgiven. Being put in default on federal student loans caused these veterans to suffer damaged credit scores, the impact of which makes life far more expensive for many necessities of 21st-century life: housing, telecommunications, automobiles, insurance and more. Worse, defaulting on federal student loans can result in the garnishment or offsetting of a veteran’s much-needed VA disability payments and tax returns.

We understand you plan to reach out to credit reporting agencies with updated information regarding the status of now-forgiven loans, and we understand that the ultimate resolution will depend on whether or not the loans went into default before or after the veterans’ effective date of disability, as is fair. We thank you for those steps.

However, we also urge you to return any wrongly garnished or offset payments to those who desperately need them and who wrongly lost them. These veterans, who by virtue of their service to our nation have become severely disabled, were eligible to have these loans forgiven. Instead, a mistake by ED that wrongly put them into default resulted in them losing the very payments that Congress and VA intended to make up for the lost use of their bodies and minds.

When they raised their right hands to take an oath to defend this nation, these veterans with 100 percent service-connected disability ratings or IU designations wrote a check payable up to and including their life. For that, we owe it to them to do the right thing.

We look forward to your reply.

MSO-VSO Public Comment on TPD Discharge Interim Final Rule