U.S. Sen. Barbara Boxer this week led two dozen Senate Democrats in urging the student loan industry to ensure military service members have all the benefits that they’re entitled to by law.
“We were alarmed to learn that some student loan servicers are providing incomplete or inaccurate information regarding service members’ options for reducing their debt —often leading individuals to make decisions that have costly long-term consequences,” the senators wrote to Student Loan Servicing Alliance Executive Director Winfield Crigler. “In one particularly egregious example, a service member was guided toward a deferment plan that ended up increasing his total debt by $25,000. This is simply unacceptable.”
Boxer’s office noted about 41 percent of service members are now carrying student loan debt, and Defense Secretary Leon Panetta said last month that the main reason why troops lose security clearances is because of financial problems.
Congress in the past has enacted loan repayment protections and benefits — such as loan forgiveness programs and interest rate reductions — to help service members manage their debt. But a report issued last month by the Consumer Financial Protection Bureau’s Office of Servicemember Affairs found many military men and women are facing significant challenges in fully accessing these benefits. Specifically, it found that some student loan servicers aren’t providing clear, accurate information about available benefits or are forcing military borrowers to clear unnecessary hurdles in order to access the benefits they deserve.
“Our brave military men and women—and their families—make tremendous sacrifices each and every day in service to our nation. They should never have to fight for full access to the benefits they have earned, including student loan repayment protections,” the senators wrote.
Read the full letter, and a list of signatories, after the jump…
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