Forgive Federal Student Loans Held by Disabled Veterans
By Charlene Crowell
Although Memorial Day is considered by many civilians as the unofficial start of summer, the true intent of the holiday is to annually honor those who lost their lives fighting for our country. The men and women who wear or have worn this nation’s uniform in military service across wars and generations are deserving of remembrance as well as appreciation.
This honor is particularly poignant for those who lost their lives in the fights for freedom, and others who returned home with permanent disabilities due to their service.
But this year on May 24, as military families, veterans’ organizations, and elected officials across the country attended ceremonies and visited cemeteries, nearly every state attorney general as well as those serving territories, made a timely and bipartisan plea to the U.S. Department of Education.
At issue is the nation’s promise to forgive federal student loan debt in its entirety for all who served and are classified by the Veterans’ Department as totally and permanently disabled.
“As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us,” wrote attorneys general (AGs) from 47 states, the District of Columbia and the territories of American Samoa, Guam, and the Northern Mariana Islands. Missing from the list of signatories are Attorneys General from Alabama, Arizona and Texas.
In today’s highly partisan atmosphere, the state officials who stood together are to be commended. Seldom in recent history have elected officials stood for a cause greater than partisan affiliation. It’s a gesture that other elected officials, including Congress should emulate on this and other serious issues.
Their letter came more than a year after more than 42,000 veterans were identified as eligible for student debt relief, due to their permanent disabilities. These men and women are saddled with more than $1 billion in federal student loans.
Life is hard enough for these veterans without wrestling with unmanageable student loan debts.
According to the Higher Education Opportunity Act of 2008, federal student loan forgiveness is the right of all disabled veterans. Forgiveness is to occur as soon as the Secretary of the Veterans Administration certifies them as “unemployable due to a service-connected condition”.
Instead, under Secretary Betsy DeVos, the Education Department wants to place the responsibility on individually affected veterans to pursue loan forgiveness, creating unnecessary barriers to a law that already guarantees debt forgiveness.
“Because America’s veterans deserve better,” continued the AGs, “we ask the Department to develop an automatic discharge process to ensure that all eligible veterans can have their student loans forgiven….The Department has the authority to automatically discharge the student loans of disabled veterans, and we urge the Department to implement the plain intent of the Higher Education Act by doing so as expeditiously as possible.”
Taking swift and corrective action would seem to be the right thing to do. Just as these and other veterans placed themselves in harm’s way to protect freedoms here and abroad, it is hard to understand why any federal official would delay or deny a benefit clearly earned. If we are truly a nation of laws, what is the problem in upholding this specific law?
As my Big Mama would have said, ‘Somebody’s got some ‘splaining to do’.
As reported by Inside Higher Ed, Secretary DeVos has not taken action on other federal loan forgiveness applications beyond the affected veterans. “More than 158,000 claims are currently pending review,” recently reported Inside Higher Ed.
As regular readers of this column may recall, the Obama Administration issued student loan regulations in 2016. But when a new administration began in 2017, many of the regulations sought and secured under President Obama were suspended or delayed – including those that affected student loan debt.
For example, the borrower defense to repayment rule grants former students who were enrolled in institutions that did not deliver the promised skills or training to pursue federal loan forgiveness. This rule was particularly needed for students enrolled in for-profit schools that frequently target veterans, have high-cost tuition and fees, graduate few students, or closed without notice – like Corinthian Colleges.
In 2017, Secretary DeVos suspended this rule from taking effect. A federal judge ruling in October 2018 voided the Secretary’s action. Yet even now, the Education Department has yet to implement the rule.
This abdication of responsibility is illustrated in the findings of the Federal Reserve’s most recent report on the economic well-being of American households. Released in May, this report tracks financial trends for all of 2018 and found that “another year of economic expansion and the low national unemployment rates did little to narrow the persistent economic disparities by race, education, and geography.”
With 44 million student loan borrowers sharing a still-climbing debt of $1.5 trillion, more actions – not inaction – ought to be the focus of the Education Department. And in prioritizing action steps, I suspect few people would object to disabled veterans being first in line for the relief they are due.
“It’s astonishing that veterans whose eligibility has already been determined by another federal agency are being forced to jump through hoops to receive what is already entitled to them by federal law,” observed Yasmin Farahi, a Policy Counsel with the Center for Responsible Lending. “Loan discharge should not be yet another burden for those who have selflessly served.”
Charlene Crowell is the Center for Responsible Lending’s Communications Deputy Director. She can be reached at Charlene.firstname.lastname@example.org.