Bill would help disabled Michigan veterans with forgiven student loan debt

Jun 12, 2018

A bill in the Michigan house would eliminate taxes for veterans that was generated by student loan debt that was forgiven.


Michigan Veteran First Lt. Will Milzarski had over 200-thousand dollars in student loan debt forgiven after two tours in Afghanistan left him with a traumatic brain injury and hearing loss.

But the loans count as taxable income, and Milzarski has since been hit with over 70 thousand dollars in state and federal taxes.

Republican State Representative Tom Barrett is the bill sponsor. He said the state can’t reduce federal taxes.

“But what we can do at the state level is put into law in our income tax code that if you have your student loan debt discharged because of a total and permanent disability due to your service in the military were not going to count that as taxable income.”

Barrett said Congressman John Moolenaar is working to have the taxes waived for Milzarski at the federal level.

He said he doesn’t know if it’s a widespread problem.

“There could be other veterans out there who face similar hardships that we’re not aware of but there was a case of specifically of a gentleman just outside of the Lansing area who had this happen to him.”

Barrett said the bill would not handle other instances of loan forgiveness - as with the Public Loan Forgiveness Program.