This article has been updated.
The Biden administration announcement Friday that he will retroactively waive interest on student loans for thousands of active and former military service members.
Federal law provides that military service members deployed on missions that qualify them for special compensation may be eligible for a waiver of their interest on certain federal student loans. However, the military must affirmatively ask for this relief; it is not provided automatically. Documentation requirements for the application can be expensive and must include a formal request with a statement and signature from a certifying officer, a copy of military orders indicating the member is serving in a hostile area, or a statement of leave and pay demonstrating danger pay hostile or imminent. As a result, many military service members are not aware of or requesting the benefit, resulting in continued increase in interest and growth in pay while deployed.
Today’s announcement by the US Department of Education will provide for an automatic and retroactive waiver of interest for qualified members of military service. The relief will apply to interest that has not been canceled during the time of a member serving in a hostile zone, for federal student loans that were first disbursed on October 1, 2008. The Department will use data matching tools in coordination with the United States Department of Defense to grant relief automatically. About 47,000 soldiers receiving federal student loans are expected to benefit, according to the Department of Education.
âThe brave men and women in uniform serving our country can now focus on their jobs and return home safely, without filling out more paperwork to access their hard-earned benefits,â said Richard Cordray, director of federal student aid operations, in a press release. âFederal Student Aid is grateful for our strong partnership with the Department of Defense, and we will seek to reduce paperwork for the military where possible. “
Today’s action follows a similar initiative announced yesterday by the Ministry for borrowers with disabilities. The Biden administration will write off the federal student loan debt of more than 300,000 borrowers as part of the Total and Permanent Disability (TPD) release program. Like the interest benefit on student loans given to military service members, TPD’s release program has always required borrowers to expressly request relief – a task that can be difficult or impossible. for those struggling with debilitating health issues. The department will use data-sharing tools in coordination with the Social Security Administration to identify federal student loan borrowers who are already determined to qualify for a PDT discharge, so that the student loan discount can be applied automatically.
These steps are consistent with the Biden administration’s stated goal of providing âtargetedâ student loan forgiveness. The administration has implemented this, so far, by expanding the cancellation of federal student loans under existing programs, including the recent cancellation of $ 500 million in federal student loans through the Human Rights Advocacy Program. borrowers, or by automating student loan cancellation and discharge programs to remove barriers. that can prevent borrowers from obtaining relief.
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