Student Loan Help for Our Disabled Veterans
As many of you know, part of my practice is in Colorado Springs, where there are a large number of military families. Whenever an article passes my computer that can help a military family, I like to pass it on.
This is one article that could help disabled veterans (and their families) who are struggling under the burden of debt from student loan obligations.
Here is the Consumer Finance Protection Bureau (CFPB) link:
There are several issues about student loan debt:
First, since the beginning of the federal student loan program those individuals who were considered total and permanently disabled could have their federal student loans forgiven. Note, that this is for federal student loans and not private loans.
Second, there was the possibility of having a loan forgiven due to death or total disability.
Third, Previously, if/when the debt was forgiven- the portion of the ‘forgiven’ debt was considered ‘income’ and therefore was taxable.
NOW>>>>Effective, January 1, 2018 due to ‘death or total permanent disability borrowers whose student loans are forgiven NO LONGER HAVE TO PAY FEDERAL INCOME TAXES ON THOSE FORGIVEN LOANS.
Thus, Now when the student loan debt is forgiven, there will be no detrimental tax consequences.
According to some data, more than 800,000 severely disabled veterans are unemployable due to a service-connected disability.
Many of these do not know that their student loan debt could be forgiven. Also, for those veterans, if/when the debt is forgiven, the ‘forgiven’ portion of the debt is no longer considered as taxable income
Veterans with student loan debt should contact their Department of Veterans Affairs for more information and if their student loan debt is forgiven, consult with a tax advisor.
It is beyond the scope of this article to address each individual circumstances with regard to specific student loan debt.
The data is from the Consumer Financial Protection Bureau…..“There are new student loan protections in place in 2018. Tens of thousands of disabled veterans and hundreds of thousands of people living with severe disabilities are now eligible for new student loan protections starting this year.”
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