WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) announced today that, following his request, the Department of Education and Department of Veterans Affairs (VA) are taking action to help disabled veterans across Maine and the nation.

Senator King today released a letter from then-Secretary of Education John King informing him that the Education Department and the VA have taken steps to discharge disabled veterans of their federal student loan debt. The move by the Departments is the direct result of a bipartisan request from Senator King and Senators Rob Portman (R-Ohio) and Chris Coons (D-Del.) who urged the Departments in November 2016 to work together to identify disabled veterans and discharge them of their loans.

“Thank you for your November 14, 2016, letter to the Secretary of Veterans Affairs, Robert McDonald, and me urging our agencies to streamline the process to ensure that any veteran who meets the requirements for total and permanent disability discharge is discharged of his or her federal student loan debt,” then-Secretary of Education John King wrote. “Secretary McDonald and I agree wholeheartedly with the need for such streamlining. Consequently, our agencies worked together to develop a computer matching agreement that will assist the Department of Education in its efforts to ensure that borrowers of Title IV loans with disabilities can apply for total and permanent disability discharge of their loans more efficiently and effectively.”

Senator King released the following statement in response: 

“After suffering a disabling injury, no veteran should be expected to return home and reach into their pockets to pay back a federal student loan,” Senator King said. “I am glad that the VA and the Education Department have taken these important steps forward, which will help identify more veterans and finally lift this unnecessary financial burden off their shoulders. I look forward to working with the Trump Administration to ensure that this data match will continue to be carried out in the coming months.”

The letter received yesterday by Senator King informed him that the Education Department and the VA have entered into a computer matching agreement to identify permanently disabled veterans with outstanding federal student debt. Under current law, disabled veterans with a total disability rating are allowed to have their federal loans discharged. However, a lack of coordination between the two departments has risked leaving behind potentially thousands of veterans who could be relieved of their student loan burdens. Senator King and his colleagues requested that the Departments work together to identify more veterans by conducting a data match and to streamline the discharge process.

In the letter, Secretary King also noted that the Education Department cannot fully automate the loan forgiveness process for disabled veterans due to the potential tax consequences facing the student loan borrower. Current law treats forgiven student debt as taxable income, which can result in thousands of dollars in immediate tax liability. To address that issue, Senators King, Portman, and Coons last year introduced the Stop Taxing Death and Disability Act – which was inspired by the tragic story of a Maine family – and would end the Internal Revenue Service’s misguided policy of collecting taxes on discharged federal student loans following death or disability.

To read the complete letter, click HERE.

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