The Department of Education's office of Federal Student Aid has retroactively waived interest on loans held by more than 47,000 current and former active-duty service members.
According to a release from the Department of Education, the move was made possible by a data-matching agreement with the Department of Defense that substantially improves access to a student loan interest-waiver benefit for many service members with federal student loans.
"Brave men and women in uniform serving our country can now focus on doing their jobs and coming home safely, not filling out more paperwork to access their hard-earned benefits," said FSA Chief Operating Officer Richard Cordray.
Under the Higher Education Act, service members deployed to areas that qualify them for imminent danger or hostile fire pay have no interest accrual on certain federal student loans that were first disbursed on or after Oct. 1, 2008.
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In the past, only a small proportion of eligible service members successfully accessed this benefit. DOE waived interest for only approximately 4,800 service members in 2019 when it did not have the data-match in place, the release states.
Now the DOE is able to identify federal student loan borrowers who serve on active duty by matching records to DoD's personnel records. As a result, the DOE can automatically provide the student loan interest benefit to eligible service members.
The announcement means that service members are not required to take any action to receive the interest rate benefit. Prior to this new automation, service members had to make individual requests for the benefit and provide additional information confirming their eligibility.
Veterans and service members with student loans may be eligible for special programs that forgive interest on their loans, or even cancel their entire loan liability in special circumstances. What's better, the Department of Education is working with other government agencies to provide these benefits automatically with no action necessary on the borrower's part.
Reach Julia LeDoux at Julia@connectingvets.com.
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