Bill would assist disabled vets on discharged loans

Reps. Ryan Zinke (R-Mont.) and Ruben Gallego (D-Ariz.), both freshman lawmakers and war veterans, teamed up to introduce a bill Tuesday that seeks to ensure disabled veterans and families of deceased veterans are not burdened by taxes on discharged loans. 

Veterans who are totally and permanently disabled currently can get their federal student loan debt discharged, but any discharged debt over $600 would be reported to the IRS, where it is considered income for federal and possible state tax purposes. 

{mosads}The Veterans Education Tax Security Act (VETS Act) would exclude federal discharged loans from gross income when a veteran is totally and permanently disabled or deceased. In certain circumstances, it would apply to parents who took out student loans on behalf of a deceased veteran. 

The bill “closes the loophole that punishes disabled veterans for loan forgiveness and makes it easier for them to make a living when they return home from the battlefield,” Zinke said in a statement.

“Our veterans have already given everything they have to support and defend our nation — some of them sacrificing life and limb,” said Zinke, a retired Navy SEAL.

Gallego, a former Marine, added, “In many instances, student loan forgiveness puts disabled veterans and their families in substantial unfair tax liability. 

“Veterans and our men and women in uniform put everything on the line to defend our country. We should stand behind them and their families during difficult times and help safeguard them from such an unfair and unexpected financial situation,” he said. 

Proud to introduce the VETS Act w @RepRubenGallego It closes a loophole that costs vets & their families thousands. https://t.co/COHGRJDKQH

— Ryan Zinke (@RepRyanZinke) March 24, 2015