More than 47,000 current and former active-duty military members will have interest on their student loans eliminated in the latest debt-relief effort by the Education Department this year.
Existing law allows service members who have qualified for imminent danger or hostile fire pay to have the interest waived on certain federal student loans, as long as the debt was first disbursed on or after Oct. 1, 2008. While the benefit was little used before, the Education Department used a data-matching agreement with the Department of Defense to search personnel records and find tens of thousands of people eligible to have interest on their student loans waived retroactively, the department announced Friday.
The interest waiver will be applied automatically. Service members previously had to request the benefit and provide additional information confirming their eligibility.
“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 Chief Operating Officer Richard Cordray said in a statement.
The military interest waiver is one of several actions the department has taken to eliminate student debt this year, following Education Secretary Miguel Cardona’s promise in March that the department would focus on “easing the burden of student debt.” Last week, the department used data matching to discharge $5.8 billion in student debt owed by borrowers with permanent disabilities through another existing program. Another $1.5 billion has been wiped away through so-called borrower defense claims, where the department cancels loans owed by borrowers who have been misled by their schools. Many more loans might get canceled should President Joe Biden follow through on a campaign promise to erase $10,000 in student debt for all federal borrowers.
The interest waiver program is different from the department’s pandemic-era relief measures, which have suspended payments and stopped interest from accruing on federal student loans since March 2020. The department extended that pause until Jan. 31, 2022, earlier this month.
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