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Trump Eliminates Student Loan Debt For Disabled Veterans

Osterhout Berger Daley > Timely Issues  > Trump Eliminates Student Loan Debt For Disabled Veterans

Trump Eliminates Student Loan Debt For Disabled Veterans


President Trump signed an executive order today that will make it easier for disabled veterans to receive student loan forgiveness.

Here’s what you need to know.

Student Loan Debt Forgiveness

Trump, who signed the memorandum following his speech at the American Veterans National Convention in Louisville, Kentucky, directed the federal government to have an “expedited” process for military veterans who are permanently and totally disabled to have their federal student loans discharged. The current student loan discharge program for disabled veterans is known as Total and Permanent Disability (TPD) Discharge.

While student loan discharge for disabled veterans is not a new program, less than half of the nation’s 50,000 disabled veterans have received a student loan discharge due to a complicated application process. Today’s executive order hopes to simplify and expedite the process so that more disabled veterans can have their federal student loans discharged. The U.S. Department of Education says it plans to notify more than 25,000 eligible veterans about student loan discharge.

“Supporting and caring for those who have sacrificed much in service to our country is a priority for President Trump and the entire Administration,” U.S. Secretary of Education Betsy DeVos said. “I appreciate the President’s strong leadership on this issue and his willingness to provide much-needed student loan relief. We will continue to prioritize the needs of our nation’s veterans and provide them the help and support they have earned and deserve.”

Veterans Have A Right To Opt-Out

Within 60 days of notification of their eligibility, veterans can decline the discharge of their federal student loans. Why would a veteran decline student loan relief? There may be several reasons, but the Education Department notes that a veteran may decline student loan debt relief due to potential tax liability or if it makes it more difficult to borrow future student loans.

How Student Loan Discharge Works and How To Apply

Under the current process (which may change with today’s announcement), borrowers who are identified will be sent a letter that explains eligibility for student loan discharge as well as a Total and Permanent Disability Discharge application. The borrower then signs and returns the application to apply for the discharge.

Borrowers can also apply by email or phone.

Phone: 888.303.7818

Office Hours:

Monday – Friday: 8:00 AM – 8:00 PM (ET)

Email: DisabilityInformation@Nelnet.net

Completed applications should be mailed to: U.S. Department of Education, P.O. Box 87130, Lincoln, NE 68501-7130.

A Total and Permanent Disability application can be completed online.

Your Rights If You Have Student Loan Debt And Are Permanently Disabled

The Consumer Financial Protection Bureau estimates that tens of thousands of disabled veterans may not know that they are eligible for student loan forgiveness. Since the formation of the federal student loan program, borrowers who are considered totally and permanently disabled have been eligible to have their federal student loans forgiven.

Student loan forgiveness in this context includes:

Importantly, cancellation of your student loans here are only for federal student loans. If you have private student loans, check with your lender regarding options for permanent discharge. Many private student lenders offer similar permanent discharge benefits. In 2016, the Education Department collaborated with the U.S. Social Security Administration to identify borrowers with disabilities who were eligible for permanent discharge. The joint effort found 387,000 borrowers with disabilities, who collectively owed over $7.7 billion in federal student loans. About half of those those borrowers were in default on their student loans (and evidently not aware of the student loan forgiveness program).

Good News: No Tax Bill

The good news is that, per the memorandum Trump signed today, disabled veterans will not owe any federal income taxes on discharged student loan debt. Trump is urging states also to absolve those veterans who receive student loan discharge of state income taxes.


A positive step to help America’s heroes and families for their selfless service.