The state of debt in the United States is almost laughable. I mean, we’ve reached an unfathomable debt number of more than $13 trillion. We owe more than some countries are worth.
I get it. It’s not actually funny. (I said, ‘almost laughable.’) The fact is, we as a country are literally living on borrowed time. Each president has done some sort of symbolic gesture of working to get rid of some debt. Then it turns out, nothing was really done. (See Presidents Bush and Obama on loan repayment plans.)
I don’t have to tell you student debt is one of the major contributors to this state of debt. President Trump has made many calls for reform, but still lags behind on putting together a concrete plan. (See? I don’t always love him.)
However, the president did make a move on a forgotten section of American debt: the disabled veterans. Think of this: Up until this month, those who served but cannot work still have student debt to repay. How cruel is that?
Previous administrations might not have put much thought into it, but the Donald has. This month he delivered a plan to rescue our disabled veterans from the Sisyphean task of repaying that debt.
How did it come to this?
On the campaign trail, we heard a lot of promises from Donald J. Trump. But, he kept hammering away at the idea that the Obama administration has forgotten about the military and he never would.
He may have been on to something.
In 2016, the Obama administration combed through disabled Americans records to forgive student loans for those who could not work. They found more than 350,000. Then, through the Social Security Administration, the government set about forgiving those loans. Only one problem — the SSA doesn’t do benefits for veterans — the VA does.
The veterans who could no longer work — but had loans — still received the business end of the debt crisis. An agreement was reached to send the VA files to the SSA, but it wasn’t made a priority in the waning months of the Obama administration. (Yeah, there might be something to that ‘Obama doesn’t care about the military.’)
In April, the Trump administration made it very clear they did. The Department of Education announced plans to forgive student debt for those disabled veterans. There is a belief that this move will affect thousands of veterans who are permanently disabled, many of whom could be in deep financial distress.
This strategy also comes with an outreach component. That is a fancy way of saying, ‘the department will find and explain the program to the disabled veterans.’
How will it work?
The Department of Education will run down the lists of disabled veterans, find those with student loan debt, and contact them.
Of course, there is more to it. Representatives will walk them through the process to apply and receive the debt forgiveness.
You might at this point speculate: “Why didn’t Mr. Trump do this sooner?” Excellent question.
One of the problems with loan forgiveness is that the federal government viewed it as income earned. Here is an example: a disabled veteran qualified to have his loans forgiven. However, come the next tax season, the government billed him for more than $60,000.
Under the new Trump tax plan, the federal government will no longer view forgiveness in that way. Once the ducks were in a row, this program became more feasible.
Over time the Trump administration wants to see this program become automatic for veterans with disabilities. In the future, as soon they receive that status, the loans could be forgiven.
It’s all part of the plan to make the men and women in service a priority again.
This program speaks to another point. Whether you want to believe it or not, Trump is serious about the debt issues facing American students.
It is a good strategy to first take care of the most vulnerable of our society. A gradual process to find out what works and what doesn’t, without breaking the bank. Just think if Obama had done that with the Affordable Care Act, we might have had a solution to the rising healthcare costs. Instead, we threw trillions of dollars into an empty vacuum of space.
Yes, we could forgive all student debt by mortgaging the government. But, that wouldn’t solve the core problem: college costs. If college was affordable, we wouldn’t need loans. If the federal government didn’t back the loans…you get my point.
This isn’t a solution, but a start. It is a signal to the veterans and students: help is on the way.
Article last modified on May 3, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Trump Cancels Student Debt…for Disabled Veterans - AMP.
Article last modified on May 3, 2018. Published by Debt.com, LLC .