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Over 47,000 Student Veterans Will Have Interest on Student Loans Retroactively Waived

Related Topics in the Ref Desk: Discharge, Cancellation, Forgiveness

By Owen Daugherty, NASFAA Staff Reporter 

Thousands of current and former active-duty military service members will retroactively see their student loan interest waived, the Department of Education (ED) announced late last week.

Through data matching with the Department of Defense (DOD), service members will not be required to take any action to receive the recently announced benefit. Prior to this automation, service members had to make individual requests for the benefit and provide additional information confirming their eligibility.

The move will apply to more than 47,000 current and former active-duty military service members, though ED did not detail how much interest accrual in total would be retroactively cleared.

"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," Federal Student Aid (FSA) chief operating officer Richard Cordray said in a statement accompanying the announcement.

Under the Higher Education Act, service members deployed to qualified areas are eligible to have no interest accrual on certain federal student loans that were first disbursed on or after Oct. 1, 2008.

ED noted that fewer than 5,000 service members and veterans requested the interest fees be waived in recent years, underscoring the barrier to the benefit that cumbersome application processes can create. The policy change transfers the burden from student veterans to officials at ED and FSA, with much of the work being done automatically through data matching with various federal agencies.

"Federal Student Aid is grateful for our strong partnership with the [DOD], and we will seek to reduce red tape for service members wherever possible,” Cordray added in his statement. 

Previously, service members had to prove past military service and that they were deployed to a qualifying area to have the interest waived. Those who qualify for the retroactive interest waiver should see the changes reflected on their accounts automatically. 

“This is necessary relief for those who served our country so honorably,” wrote House Veterans’ Affairs Committee Chairman Mark Takano (D-Calif.) in a post on Twitter. 

This is the latest move by the Biden administration to achieve its goal of providing targeted relief for student loan borrowers. Last week the administration announced it was clearing student loan debt for more than 323,000 borrowers with a total and permanent disability. 

 

Publication Date: 8/24/2021


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