On Wednesday, President Trump approved an executive order that pardons all student loan debt for any permanently disabled U.S. veterans.
The law, which Trump signed following a speech at the American Veterans National Convention in Louisville, Ky also clears those qualified veterans from having to give any federal income tax on the loans. Trump continued that he is pressing individual states to follow suit. Trump said, “The debt of these disabled veterans will be completely erased. That’s hundreds of millions of dollars of student loans debt for our disabled vets that will be completely erased.”
The memo Trump signed orders the government to develop an “expedited” manner so veterans can have their federal student loan debt dismissed “with minimal burdens.” Currently, just half of the approximately 50,000 disabled veterans who are qualified to have their national student loan debt forgiven have received the benefit because of a difficult application process.
Under the current process, disabled veterans can have their debt pardoned under (TPD) Total and Permanent Disability Discharge, a credit forgiveness program as long as they have a VA service-connected disability rating of 100 percent. However, as of July, only about 20 percent of the eligible pool of veterans had taken advantage of the program due to the complex nature of the application and other circumstances.
‘Trump’s statement comes days after the administration appointed a longtime student loan industry official to be the federal government’s top observer for the student loan market. Said Friday by the bureau, Robert Cameron will serve as the Consumer Financial Protection Bureau’s new student loan ombudsman.
It’s a job intended to protect student loan borrowers from poor methods in the scholar loan industry and one of the rare positions explicitly listed in the Dodd-Frank Act, after the 2008 financial crisis that formed the bureau, the law passed. It’s regarded as the go-to office for borrowers who have objections about their loans. Cameron most recently worked as the head of compliance and risk mitigation at FedLoan Servicing, which is also called the Pennsylvania Higher Education Assistance Agency.
Pennsylvania Higher Education Assistance Agency has been subpoenaed for poor industry practices, most notably for how it has managed the troubled Public Service Loan Forgiveness organization, a program created to provide student loan borrowers who serve in public service jobs to get a portion of their loan balances forgiven.
The executive order also comes as student loan forgiveness has become a major talking point among the 2020 Democratic presidential primary candidates, with contenders like Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts pushing plans to wash out student loan debt nationwide completely. Currently, Americans carry around $1.6 trillion in student loan debt.