Action continues Attorney General Becerra’s work to advocate for and support consumer protections for service members and veterans

May 25, 2019 - SACRAMENTO – California Attorney General Xavier Becerra on Friday, as part of a coalition of 52 attorneys general, sent a letter urging the Department of Education (Department) to discharge the student loans of tens of thousands of veterans who were disabled as part of their service. In the letter, the coalition asks the Department to develop an automatic discharge program to ensure that all eligible veterans can have their student loans forgiven, rather than requiring these veterans to take affirmative steps to seek loan forgiveness – an approach that that has proven ineffective.

“Today I’ve asked the Department of Education to automatically discharge the loans of veterans with permanent and total disabilities,” said Attorney General Becerra. “These veterans have made significant sacrifices for our country. They deserve respect and honor, not additional steps and red tape in seeking student loan relief.”

The Department of Education has identified over 42,000 veterans who are eligible for total and permanent disability discharges based on information received from the Department of Veterans Affairs. Collectively, these veterans carry over $1 billion in dischargeable student loan debt—nearly $24,000 each on average. Yet fewer than 9,000 of these eligible veterans had applied for discharges as of April 2018, and over 25,000 were in default. In the letter, the coalition cites these numbers as demonstrating the inadequacy of the current approach. The coalition asks the Department to develop a process to automatically discharge the loans of veterans identified as permanently disabled, halt collection efforts, and clear the credit reports of negative reporting related to student loans.

Attorney General Becerra supports strong consumer protections for our nation’s service members and their families. Last year, Attorney General Becerra sponsored a bill to strengthen California’s existing consumer protections for service members and their families, which was signed into law in September 2018. Just a month later, Attorney General Becerra condemned Consumer Finance Protection Bureau Acting Director Mick Mulvaney for his decision to strip the agency’s oversight of lenders under the Military Lending Act. In December 2018, Attorney General Becerra announced the sentencing of Ramil “Randy” Abalkhad, owner of Romano’s Jewelers, for felony conspiracy to engage in illegal financing and debt collection practices targeting sailors and marines in San Diego.

A copy of the letter can be found here.
Source: CA. DOJ