President Donald Trump signed an executive order on Wednesday making it easier for totally disabled veterans to have their student loans forgiven.
“Congress enacted a law that has been on the books for some time that says that military personnel, veterans who become totally and permanently disabled as a result of their military service are entitled by federal law to have their federal student loans forgiven,” said Schmidt. “That is the law. The problem that we focused on fixing and that the President has now ordered fixed is that, simply because that law is on the books doesn’t mean that service personnel who have qualified for it know about it, or focus on claiming that benefit.”
The action Wednesday cuts some of the red tape.
“Out of about 42,000 disabled veterans who are qualified under federal law to have their loans forgiven, only about 9000 had actually taken the step to apply for that forgiveness,” said Schmidt. “Twenty-five thousand had loans that were in default and in some cases moving to collection.”
This flips the process around.
“Instead of waiting for a qualified, disabled veteran to ask for the loan forgiveness that Congress has provided for them, we asked that the Department of Education and Veterans Affairs be required to automatically forgive those loans and wipe them off the books. You don’t require a totally and permanently disabled veteran to go through the bureaucratic paperwork of asking for what Congress has already said they are entitled to.”
The Republican tax law in 2017 removed any federal tax liability for the forgiven loans.