As Betsy DeVos Arrives In Dallas For Conservative Confab, Disabled Veterans Still Wait For Federally Authorized Debt Forgiveness

DALLAS, TEXAS — As Secretary of Education Betsy DeVos arrives in Dallas today for the Turning Point USA Young Women’s Leadership Summit, consumer watchdog group Allied Progress called on her to demonstrate real leadership and forgive the student debt of 42,000 permanently disabled veterans as authorized by federal law.

Recently, the Attorneys General of 51 states and territories called on DeVos to waive burdensome paperwork requirements to forgive the debt of these American heroes. Notably absent from this list was Texas Attorney General Ken Paxton, one of just three AG’s nationwide who declined to support debt relief efforts for these disabled veterans.

“For all their talk about getting government out of the way, DeVos and Paxton think these vets should fill out a form and take a number if they want their federally authorized loan forgiveness,”said Derek Martin, Director of Allied Progress. Martin continued, “Instead of throwing up barriers and shirking responsibility, DeVos and Paxton should use their power to do something about this problem. It’s the least they can do for those who’ve made incredible sacrifices for this country. Honoring America’s veterans isn’t a complex issue – it just requires the will to act.”

In their letter, the 51 Attorneys General said, “Because America’s veterans deserve better, we ask the Department to develop an automatic discharge process to ensure that all eligible veterans can have their student loans forgiven. Any concerns that some disabled veterans might not want their student loans discharged can be addressed by providing veterans notice and an opportunity to opt out of loan forgiveness or to seek reinstatement of their loans.”

Under federal law, veterans who are “totally and permanently” disabled are entitled to have their student loans cancelled, but the Department of Education requires they fill out cumbersome paperwork to secure this debt forgiveness. While the Department has already identified eligible veterans and alerted them to their rights, they are still required to fill out an application before the more than $1 billion in debt they collectively owe can be forgiven. The Department has cited “tax concerns” and other potential consequences in the face of bipartisan calls to proactively wipe out this debt. As the Attorneys General note however, “the Department could notify borrowers eligible for automatic discharges of the potential state income tax consequences and allow them to opt out of having their loans automatically discharged or request to have their loans reinstated.”

WHAT YOU NEED TO KNOW:

Education Secretary Betsy DeVos Will Be In Dallas, Texas, For A Conservative Conference Hosted By Turning Point USA.

On June 6, Education Secretary Betsy DeVos Is Scheduled To Speak At The Turning Point USA Young Women’s Summit In Dallas, Texas.

On June 6, 2019, Education Secretary Betsy DeVos Will Speak At The Turning Point USA Young Women’s Leadership Summit In Dallas, Texas. [“Young Women’s Leadership Summit Agenda 2019,” Turning Point USA, accessed 06/06/19]

Turning Point USA Is A “Conservative Group” That Has “Repeatedly Been Accused Of Engaging In Half-Truths And Unethical Behavior.”

Turning Point USA Is A “Conservative Group” That Has “Repeatedly Been Accused Of Engaging In Half-Truths And Unethical Behavior.” “In its six years of existence, Turning Point USA has repeatedly been accused of engaging in half-truths and unethical behavior — whether secretly funneling money to student-government candidates or placing college faculty members on a poorly researched (and arguably McCarthyesque) Professor Watchlist. None of that has slowed the meteoric rise of the conservative group and its charismatic leader, Charlie Kirk. Kirk continues to be a regular guest on Fox News. He rubs elbows with the Trump family and Republican members of Congress. Donors gave his organization nearly $10 million last year.” [Michael Vasquez, “Leaked Memo From Conservative Group Cautions Students to Stay Away From Turning Point USA,” The Chronicle of Higher Education, 06/15/18]

Texas Attorney General Ken Paxton Refused To Join 51 Other AGs In Calling On Betsy DeVos Stop Requiring Permanently Disabled Military Veterans To Fill Out Onerous Paperwork To Qualify For Student Loan Forgiveness.

In May 2019, A Bipartisan Group Of 51 State Attorneys General Signed A Letter To Betsy Devos Requesting That She Automatically Cancel The Student Debt Of Eligible Disabled Members—Instead Of Requiring Them To Fill Out Paperwork First.

In May 2019, The Attorneys General Of 51 States And Territories Signed A Letter Asking Education Secretary Betsy DeVos To “Stop Requiring That Disabled Veterans Fill Out Paperwork To Become Eligible For Federal Student Loan Forgiveness” And To “Exercise Her Power To Automatically Cancel The Debt.” “The attorneys general of 51 states and territories on Friday asked Education Secretary Betsy DeVos to stop requiring that disabled veterans fill out paperwork to become eligible for federal student loan forgiveness. Instead, they want DeVos to exercise her power to automatically cancel the debt. Veterans who are ‘totally and permanently’ disabled are entitled under federal law to have their student loans canceled, but the Trump administration’s current process for doing so is ‘inadequate,’ the bipartisan group of attorneys general wrote in a letter to DeVos.” [Michael Stratford, “51 attorneys general urge DeVos: Erase disabled veterans’ student debt,”Politico, 05/24/19]

  • In their letter, the 51 attorneys general wrote, “Because America’s veterans deserve better, we ask the Department to develop an automatic discharge process to ensure that all eligible veterans can have their student loans forgiven. Any concerns that some disabled veterans might not want their student loans discharged can be addressed by providing veterans notice and an opportunity to opt out of loan forgiveness or to seek reinstatement of their loans.’” [Letter from Attorneys General to Education Secretary Betsy DeVos, National Association of Attorneys General, 05/24/19]

Texas Attorney General Ken Paxton Was One Of Only Three State AGs Who Did Not Sign Onto The Letter Requesting Automatic Loan Forgiveness For Eligible Disabled Veterans.

Texas Attorney General Ken Paxton—Along With The AGs From Alabama And Arizona—Was One Of Three State Attorney Generals Who Refused To Sign Onto The Letter. “Texas is just one of just three states that did not sign onto a letter sent to Secretary of Education Betsy DeVos asking to forgive disabled veterans student loans. […] The states that did sign the letter are asking the U.S. Department of Education to stop requiring disabled veterans to fill out paperwork to become eligible for student loan forgiveness, but instead to cancel the debt these veterans have concurred completely. In addition to Texas Attorney General Ken Paxton, attorneys general from Alabama and Arizona also didn’t sign the letter.” [Salina Madrid, “Texas does not sign onto letter asking for forgiveness of disabled vets’ student loans,” CBS 4 News, 06/05/19]

The Department Of Education Claimed That Automatic Loan Forgiveness For Disabled Veterans Could Have “‘Unintended Consequences’” Like Raising Veterans’ Tax Bills—Even Though Loan Discharges For Disabled Borrowers Aren’t Counted As Taxable Income By The IRS And Most States.

The Department Of Education Claimed That Automatic Loan Forgiveness For Disabled Veterans Could Have “‘Unintended Consequences,’” Like Raising Their Tax Bills… 

The Department Of Education Claimed That Automatic Loan Forgiveness For Disabled Veterans Could Have “‘Unintended Consequences’” And “Could Raise Veterans’ Tax Bills Or Inhibit Them From Taking Out More Student Loans.” “In a statement to NPR, the Education Department said it recognized the sacrifices that veterans make for their country, adding that it has worked to streamline the TPD discharge process. ‘While we have worked to make this process as easy and as seamless as possible for veterans, the last thing we want to do is cause unintended consequences for them,’ according to the statement. The department said discharges could raise veterans’ tax bills or inhibit them from taking out more student loans.” [Cat Schuknecht, “47 States Call On Betsy Devos To Forgive Student Loans For Disabled Veterans,”NPR, 05/25/19]

…A Claim Dismissed By The 51 Attorneys General, Who Noted That Loan Discharges For Disabled Borrowers Are Excluded From Taxable Income By The Federal Government And Most States.

The 51 Attorneys General Dismissed The Education Department’s “Concerns About Borrowers’ Potential Tax Liability” Because, They Noted, “Federal Tax Law Now Excludes Loan Discharges For Disabled Borrowers From Taxable Income, And Most States’ Tax Codes Do Likewise.” “Although the Department of Education has raised concerns about borrowers’ potential taxliability, federal tax law now excludes loan discharges for disabled borrowers from taxableincome, and most states’ tax codes do likewise. Moreover, we think it likely that most borrowerswould prefer to have one hundred percent of their outstanding loans discharged, even if thisresulted in an increase to their state tax bill. However, in order to protect those borrowers andrespect each borrower’s right to make the choice that best fits his or her individualcircumstances, the Department could notify borrowers eligible for automatic discharges of thepotential state income tax consequences and allow them to opt out of having their loansautomatically discharged or request to have their loans reinstated.” [Letter from Attorneys General to Education Secretary Betsy DeVos, National Association of Attorneys General, 05/24/19]

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