Disabled Veterans Student Loan Protection Act of 2016

To amend the student loan forgiveness program in the Higher Education Act of 1965 to include a greater number of disabled veterans and to facilitate the automatic transfer to the Secretary of Education of information regarding veterans eligible for student loan forgiveness, and for other purposes. 1. Short title This Act may be cited as the Disabled Veterans Student Loan Protection Act of 2016 2. Service-connected disability determinations (a) In general Section 437(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(a) (2) Service-connected disability determinations (A) In general A borrower who has been determined to be unemployable by the Secretary of Veterans Affairs or has been assigned a disability rating of 100 percent (or a combination of ratings equaling 100 percent) by the Secretary of Veterans Affairs or the Secretary of Defense for a service-connected disability (as defined in section 101 of title 38, United States Code), regardless of whether such borrower provides documentation of such rating to the Secretary of Education, shall be considered permanently and totally disabled for the purpose of discharging such borrower's loans under this subsection, and such borrower shall not be required to present any additional documentation for purposes of this subsection. (B) Rating of disability A determination of unemployability or disability rating of 100 percent described in subparagraph (A) and transmitted in accordance with subparagraph (C) shall be considered sufficient documentation for purposes of this subsection. (C) Transfer of information Not later than 180 days after the date of enactment of this paragraph, the Secretary of Education, in coordination with the Secretary of Defense and the Secretary of Veteran Affairs, shall create a system through which the applicable disability ratings, or alternative means of transmitting a determination of unemployability, made before, on, or after the date of enactment of this paragraph, shall be automatically transmitted from the Department of Defense or the Department of Veterans Affairs, as the case may be, to the Department of Education and shall satisfy the documentation requirement described in this subparagraph. The Secretaries shall have the authority to enter into any agreements necessary to implement the requirements of this subparagraph. (D) Notification to borrowers The Secretary of Education shall notify each borrower whose liability on a loan has been discharged under this subsection that such loan has been discharged. . (b) Effective date The amendment made by this section shall take effect on the date that is 60 days after the date of enactment of this Act.

Summary: Disabled Veterans Student Loan Protection Act of 2016 This bill amends title IV (Student Assistance) of the Higher Education Act of 1965 to modify the federal student loan discharge process for a veteran who has a total and permanent disability. Specifically, it directs the Department of Education (ED) to establish a system to automatically transmit, from the Department of Veterans Affairs (VA) or the Department of Defense (DOD), an applicable determination of unemployability or assignment of a service-connected disability rating of 100%. ED must accept, as sufficient documentation of a borrower's total and permanent disability, a determination of unemployability by the VA or an assignment of a service-connected disability rating of 100% by the VA or DOD that is transmitted in accordance with such system.