In an effort to strengthen the relationship between the White House and the Department of Veteran Affairs, the Department of Education announced it will be simplifying student loan forgiveness for disabled veterans.
For critics of Trump’s view on student loans, the announcement shows the administration’s willingness to tackle the challenges of student debt for disabled vets, and offers hope that more changes are on the way.
Speaking on the new initiative, Education Secretary Betsy DeVos said in a statement, “Our nation’s veterans have sacrificed much for our country. It is important that, in return, we do all we can to give them the support and care they deserve.”
According to the Census Bureau, approximately 4 million U.S. military veterans had a service-connected disability in 2016. Of these 4 million veterans, 1.3 million had a significant disability due to injuries or diseases that occurred during active military service, while roughly 800,000 veterans are unable to work as a result.
When you compare this with the bureau’s statistics on student debt, which shows that the average veteran had anywhere from $15-18,000 in outstanding loans in 2013, the problem appears staggering. Yet, the administration appears firm in its commitment to help veterans overcome financial challenges.
The Total and Permanent Disability (TPD) Discharge is a program that was originally streamlined in 2012 by the Obama administration. While the program has always been available to disabled veterans, it hasn’t always been easy to access, largely due to the program’s lack of publicity.
Now, the administration says, veterans with permanent disabilities will be reached out to directly by the Department of Veterans Affairs and the Department of Education. Working together, they plan to identify disabled veterans who are eligible for the program and assist them in completing the application for forgiveness on their student debt.
In the statement, the Education Secretary also points out the motivation behind the initiative, “Simplifying the loan forgiveness process and proactively identifying veterans with federal student loans who may be eligible for a discharge is a small but critical way we can show our gratitude for veterans’ service.”
Why wait to be contacted for a TPD Discharge? You can start the application process now by filling out our free online form. The sooner you apply, the sooner you can be eligible to have your student debt forgiven.
For veterans, the TPD Discharge program is designed for former military personnel with total and permanent disabilities that resulted during active duty. However, the program applies to anyone with similar challenges that disrupt their ability to repay student loans.
The Department of Education defines a total and permanent disability as a physical and/or mental impairment that has persisted for over five years, one that will likely to continue for that length of time, and/or a disability that could result in death.
To qualify for a TPD Discharge as a disabled veteran, you’ll first need to receive documentation from the Department of Veterans Affairs that proves the disability and demonstrates your unemployable status. Additionally, you will need to have one of the following student loans for eligibility.
If you meet the above requirements, it’s a good idea to begin filling out an application for a TPD Discharge as soon as possible. That way, you can avoid the added pressure of missing your payments, going into default, or missing an opportunity to have your debt erased for good.
Once your application is approved, the Department of Education will notify lenders of your status and have your loans discharged. What’s more, if you’ve already made payments after your effective disability date, your lenders will be required to refund you on any payments made on or after this date.
In the past, any outstanding balance forgiven through the TPD Discharge program was considered taxable by the IRS. This means that even though your debt was forgiven, you would still need to pay taxes on the forgiven amount the following year. And for some veterans, this ended up costing thousands of dollars.
However, that all changed last December when Congress passed the $3.1 trillion spending bill known as the Tax Cuts and Jobs Act.
As of January 1, 2018, anyone who is approved for a TPD Discharge will no longer have to pay federal taxes on student loans forgiven through the program. Anyone approved for the program prior to the start of this year is still required to pay taxes.
If you’re eligible for the program and you’d like to have your debt eliminated, you have two options: start the TPD Discharge application process now or wait until you’re contacted by the VA or Education Department via mail.
Those who don’t qualify for the program can also access other student loan forgiveness and repayment options for military personnel that offer great benefits and often come with lower monthly payments.
To see what options are available to you, speak with a student loan expert now at (800) 771-6358.