Harder, VA Committee Chair Demand Answers After DeVos Bungles Disabled Veteran Student Loan Forgiveness

WASHINGTON – Representatives Josh Harder (CA-10) and House Veterans Affairs Committee Chairman Mark Takano (CA-41) have sent a letter to Department of Education Secretary Betsy DeVos demanding answers about the status of student loan debt forgiveness for disabled veterans. Although the Trump Administration directed the department to discharge the loans of tens of thousands of totally and permanently disabled veterans, only approximately 3,300 have received forgiveness. Thousands of veterans who qualified for forgiveness and were in default never had their loans discharged instead saw their other veterans benefits taken. Particularly concerning are the conflicting reports indicating the department is not aware of the total number of eligible veterans.

"It's not clear to me if Betsy DeVos is completely incompetent or if she has it out for these veterans because they have student debt – or both," said Rep. Harder. "Regardless, she was directed to let these heroes off the hook for their debt and instead they're having their other benefits stolen. The President did the right thing with this executive order – but it doesn't do a lick of good if you've got Betsy DeVos throwing a wrench in the works."

"Disabled veterans made incredible sacrifices for our country and, like many Americans, they feel the financial burden of student loans," said Chairman Mark Takano. "It is frustrating that the Trump Administration and Secretary DeVos have dragged their feet instead of working diligently to discharge these veterans' student loans, harming those who had their wages, tax returns, or disability checks garnished in the process. Our government promised disabled veterans student loan forgiveness, and we need to keep that promise."

In August, the Trump Administration rolled out a Presidential Memorandum, expressly forgiving the student loan debt of at least 27,000 veteran student loan borrowers in default according to the department's own internal estimates. However, in October, it was revealed that the Department had been slow to implement a new rule, which resulted in only about 3,300 veterans actually having their debt forgiven. Many of the remaining veterans have had their other benefits garnished as a result of the department's failure to automatically discharge the loans in a timely manner.

The text of the letter is below and an original copy is available here.

Secretary DeVos,

We write with strong concerns about the Department of Education's ("Department") handling of the discharge of federal student loans for totally and permanently disabled veterans. While we are pleased to learn that the Department is taking steps to carry out the President's August Memorandum[1] to automatically discharge the federal student loan debts of our nation's disabled veterans, the delay in implementation has resulted in the garnishment of veterans' federal disability benefits and tax returns by your department[2].

Between August and November 2019, when the Department was directed by the memorandum to begin automatically forgiving the loans of totally and permanently disabled veterans, only 3,300 of the nearly 27,000 veterans eligible for forgiveness had their loans discharged[3]. This is an unacceptable delay for fully disabled veterans who are unable to work, as well as their families, while their financial security hangs in the balance. These veterans have made enormous sacrifices for our country, and they deserve the best we have to offer.

Prior to the August memorandum, the Higher Education Act allowed disabled veterans to apply for discharge of their student loans through the Department. While new regulations implemented automatic loan forgiveness to remove an additional barrier for the veteran, these regulations took far too long to be developed and hurt thousands of veterans by causing many to default on their loan payments. Even more egregious was the fact that veterans' other benefits were being garnished to cover the defaulted loan debts that you were already required by the memorandum to forgive.

This is not the first time your department has failed to serve student loan borrowers. We see a clear pattern of incompetence and malice towards borrowers, underscored by these instances of wrongfulness and the Department's collection on loans from former Corinthian Colleges students, even after a preliminary injunction ordered the Department to halt those collections.

In light of the glaring missteps by your department and the documented damage it has caused to more than 20,000 fully disabled veterans, we respectfully request answers to the following questions:

1. What protocols and processes will the Department implement to ensure this negligence will not occur again?
2. What is the total number of totally and permanently disabled veterans seeking a discharge of their federal student loans and how many claims has the Department approved?
3. What is the total number of disabled veterans that had their benefits and tax returns garnished due to defaulting on their student loans?
4. What is the Department's plan and timeframe for reimbursing the veterans' whose benefits and tax returns were erroneously garnished?

While your Department has taken steps to remedy this error and ensure disabled veterans are on track to receive full forgiveness of their federal student loan debt, this does not undo the damage already caused to thousands of veterans. We request timely and frequent updates on your plan to make these veterans' whole. We look forward to your response and to working with you to ensure this does not occur again.