Rep. Ruben Gallego and Rep. Ryan Zinke Introduce the Veterans Education Tax Security Act (VETS Act)
Washington, DC – Today, Congressman Ruben Gallego introduced his first piece of legislation – the Veterans Education Tax Security Act (VETS Act). The VETS Act, introduced with Rep. Ryan Zinke (R-MT), will ensure that disabled veterans, deceased veterans and deceased members of the Armed Forces are not financially penalized when their federal student loans are lawfully discharged.
Currently, veterans who are totally and permanently disabled can get their federal student loan debt discharged. Unfortunately the Department of Education reports any discharged debt over $600 to the IRS where it is considered as income for federal and possible state tax purposes.
"In many instances student loan forgiveness puts disabled veterans and their families in substantial unfair tax liability," said Rep. Ruben Gallego (D-AZ). He added, "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."
The VETS Act would exclude federal discharged loans from gross income when a veteran is totally and permanently disabled, or deceased; for any deceased Member of our Armed Forces; and in certain circumstances for the parents who took out student loans on behalf of a deceased member of the Armed Forces.
Rep. Ryan Zinke (R-MT) said, "Our veterans have already given everything they have to support and defend our nation—some of them sacrificing life and limb. It's our duty to honor and support them when they return home. Veterans suffer higher unemployment than their civilian counterparts, and many are forced into low-paying jobs when they return, despite their education or specialized training, making it more difficult to make a living. I am proud to join Congressman Gallego in introducing the VETS Act because it 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."