Biden administration announced on Friday that he would retroactively waive student loan interest for thousands of current and former military personnel on active duty.
Federal law provides that military personnel sent to missions requiring special pay may be waived interest on certain federal student loans. However, members of the armed forces must affirmatively request this relief; it is not automatically provided. Documentation requirements for the request can be burdensome and must include an official statement along with the statement and signature of the certifying official, a copy of a military order showing that the soldier is serving in a hostile area, or a leave and earnings certificate showing payment for a hostile or imminent danger. As a result, many members of the armed forces are not aware of or apply for benefits, resulting in constant interest accrual and increased balance during service.
Today’s announcement by the US Department of Education provides for automatic rollback and interest waiver for eligible military personnel. The Department will use data matching tools in coordination with the US Department of Defense to automatically deliver assistance. According to the Department of Education, approximately 47,000 military personnel with federal student loans will benefit.
“The brave men and women in military uniform serving our country can now focus on getting their jobs done and returning home safely, rather than completing additional paperwork to gain access to their hard-earned benefits,” the chief operating officer said in a statement. Director of the Federal Student Service Richard Cordray. “The Federal Student Aid Service is grateful for our close partnership with the Ministry of Defense, and we will strive to reduce the red tape for the military where possible.”
Today’s action follows a similar initiative announced yesterday by the Department for Disabled Student Loan Borrowers. The Biden administration will cancellation of federal student loan debt of more than 300,000 borrowers through the Permanent Disability Discharge (TPD) program. Like the military student loan interest rate relief, TPD’s layoff program has historically required borrowers to affirmatively apply for assistance – a task that can be difficult or impossible for those struggling with debilitating illnesses. The department will use data sharing tools in coordination with the Social Security Administration to identify federal student loan borrowers that have already been identified to be eligible for a TPD statement so that student loan forgiveness can be applied automatically.
These steps are consistent with the Biden administration’s stated goal of ensuring “Targeted” student loan forgiveness… The administration is still implementing this by expanding the forgiveness of federal student loans through existing programs, including the recently cancellation of $ 500 million federal student loans under the Borrower Protection Program to Maturityor by automating student loan forgiveness and repayment programs to remove barriers that might prevent borrowers from getting help.