President Joe Biden is freezing student loan interest for 47,000 military personnel.
Here’s what you need to know.
Another win this week for student loan borrowers: The US Department of Education retrospectively waived interest on federal student loans held by more than 47,000 current and former military personnel. This student loan exemption improves access to student loan interest exemption benefits for military personnel through a data collation agreement with the US Department of Defense.
“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,” said the Chief Operating Officer of the Federal Service student aid Richard Cordray. “The Federal Student Aid Agency is grateful for our close partnership with the Department of Defense and we will strive to reduce military red tape where possible.”
Student Loan Benefit: How Interest Rate Freeze Works
Here’s how this student loan exemption will work for qualified military personnel:
- Pursuant to the Higher Education Act of 1965, military personnel sent to areas that qualify them to pay imminent danger or hostile fire will not receive interest on certain federal student loans that were first disbursed on or after October 1, 2008.
- Historically, the student loan exemption was not available to a large number of military personnel.
- For example, in 2019, the Department of Education waived student loan interest for only about 4,800 military personnel. Why? There was no data correspondence between the Department of Education and the US Department of Defense.
- Today, the Department of Education and Department of Defense can select federal student loan borrowers who are on active duty.
- The student loan exemption can now be applied automatically.
Student Loan Benefit After Student Loan Cancellation
This military student loan exemption follows Biden’s move to cancel $ 5.8 billion student loans for disabled student loan borrowers. Biden has now canceled $ 8.7 billion for student loan borrowers, which has helped nearly 500,000 federal student loan borrowers. Biden continued to pursue a targeted student loan cancellation strategy that helped provide student loan exemption to certain groups of student loan borrowers. Today’s announcement is aimed at military personnel, and yesterday’s announcement is aimed at student loan borrowers with full and permanent disabilities. Student Loan Cancellation has previously provided assistance to student loan borrowers who fall under the Borrower Protection Rule, as well as student loan cancellations totaling more than $ 1.5 billion.
As Biden embarks on a targeted cancellation of a student loan, it is important to note that you may not qualify as this student loan forgiveness does not apply to all student loan borrowers. Many federal student loan borrowers and private student loan borrowers are not eligible for forgiveness on this type of student loan. Therefore, make sure that you understand all possible student loan repayment options. Here are smart ways to pay off student loans and save money:
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