Federal Government Predicts that Student Loan Relief Backed by AG Grewal Will Save Tens of Thousands of Disabled Vets over $1 Billion – U.S. Department of Education Agreed to Automatically Discharge Student Loans Only After AG Coalition Led by AG Grewal Prompted Action by President

TRENTON – Tens of thousands of veterans who are totally and permanently disabled as a result of their military service are expected to save approximately $1.3 billion on their student loans over the next decade, according to recent analysis from the U.S. Department of Education. These savings are the result of a change in federal policy prompted by the advocacy of a bipartisan coalition of 52 state and territorial attorneys general led by New Jersey Attorney General Gurbir S. Grewal and Utah Attorney General Sean Reyes.

Today, in a letter to the Department of Education, Attorney General Grewal noted that the new estimates of the number of veterans affected and the amount of their savings showed why it was so important for the Department to automatically forgive the student loans of totally and permanently disabled veterans. Until recently, the Department of Education had required veterans to do unnecessary paperwork to secure relief from their student loans, even after the Department of Veterans Affairs had found that a veteran met the legal requirements for disability-related loan forgiveness.

“Veterans who put their lives on the line for their country and are now totally and permanently disabled due to their service don’t deserve to be saddled with student loan debt,” said Attorney General Grewal. “Cutting through the red tape keeping them from loan forgiveness isn’t just the right thing to do, it is the least we can do to honor our veterans’ service.”

In 2018, the Department of Education determined that over 30,000 totally and permanently disabled veterans eligible for student loan forgiveness had not completed the required paperwork. A majority of those disabled veterans had student loans in default.

In May 2019, the coalition of 52 attorneys general joined veterans advocates and Members of Congress in calling on the Department of Education to automatically discharge the student loans of eligible disabled veterans, instead of requiring them to formally apply.

President Trump signed a presidential memorandum in August 2019 directing the Department of Education to automatically forgive the student loan debt of eligible disabled veterans.

The Department of Education published an interim final rule implementing the President’s directive on November 26, 2019. The Department cited the advocacy of state and territorial attorneys general as a reason for its action.

In connection with its interim final rule, the Department estimated that switching from an “opt-in” approach to loan forgiveness to an automatic or “opt-out” approach will save already-eligible veterans who have not yet applied for relief more than $543 million. Over the next decade, additional totally and permanently disabled veterans are projected to save another $787 million.

All told, the Department of Education estimates that the new policy will save totally and permanently disabled veterans more than $1.3 billion on their student loans, or about $138.7 million per year on average, over ten years.

“The President and I don’t agree very often, but I’m glad that he instructed the Secretary of Education to do the right thing by our nation’s military veterans,” Attorney General Grewal said.

The comment letter submitted by Attorney General Grewal to the Department of Education today is in response to the Department’s November 2019 interim final rule. In addition to welcoming student-loan relief for disabled veterans, Attorney General Grewal proposed that the Department use its new loan-forgiveness policy for disabled veterans as a “model” for providing loan forgiveness to other individuals entitled to debt relief due to a disability.


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