A sobering figure for Veterans Day: 200,000 servicemen owe nearly $ 3 billion in student loans

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Those who serve our country are struggling to access the student loan forgiveness promised to them by the government, new evidence suggests.

A sobering figure for Veterans Day: Around 200,000 servicemen owe nearly $ 3 billion in student loans and yet only 17,534 have officially started the process of repaying their loans under the forgiveness program. public service loans. according to published data Wednesday by the Student Loan Borrower Protection Center, an advocacy group.

The program, which has been in existence since 2007, allows borrowers working in the public service to have their federal student loans canceled after ten years of payments. The best way for borrowers to make sure they are on the right path to forgiveness is to file a document, known as the Certificate of Employment form, which allows the government and contractors to hiring to manage the student loan program to verify that they are in qualifying employment.

The SBPC report, based on a request for open files, found that a small fraction – the 17,534 borrowers representing almost 9% of military borrowers overall – completed these forms. In addition, almost a quarter of those ECF forms were turned down, an “extravagant” rate “for borrowers who were assuming the epitome of public service,” said Seth Frotman, executive director of SBPC.

“What we’ve seen time and time again is sadly that military families are often the canary in the coal mine when markets are broken or programs crash – they pay the price,” he said. said Frotman. Indeed, the student-loan officers have been charged in the past to deny military members an interest rate cap on their loans to which they were entitled during their military service.

The challenges faced by the military in accessing the PSLF mirror larger obstacles civil servants of all types were confronted with accessing the program. To be eligible, borrowers must have the right type of federal student loan, work for a qualified employer, repay under a qualifying repayment plan, and have the correct number of payments.

Borrowers largely navigate these requirements through their student loan services, the companies the government hires to manage the student loan program; any wrong information can derail their progress towards forgiveness. The borrowers accused the service agents in both lawsuits and elsewhere to provide incorrect or insufficient information about the program.

In 2017, the first year, borrowers were eligible to cancel their loans under the program, about 99% who applied were refused. The acceptance rate has increased as program requirements are better understood and borrowers are more likely to have the type of federal student loan that qualifies, but it remains relatively low at nearly 3%, according to the data. released in september by the Ministry of Education.

Members of the military face particular obstacles in navigating the student loan program. For example, the SBPC found that approximately 10,000 military personnel are on military borrowed time, a status that allows them to withhold their loan payments during certain periods of service, but does not allow them to accumulate credits towards the PSLF. This is despite the availability of income-based repayment plans, which allow borrowers to repay their loans as a percentage of their income – in some cases, payments can be as low as $ 0 – and build credit to PSLF. .

“Having been the lowest level soldier there is, it really is a 24/7 job, you are at the mercy of whatever they tell you to do, whenever they tell you to do it, ”said Mike Saunders, director of military and consumer protection at Veterans Education Success. “If it takes hours on the phone with your student loan manager to sign up for income-based repayment, you don’t have that. ”

While the military face unique challenges, they also enjoy unique protections under the Higher Education Act. the Act on the HEROES enacted in 2003, grants the Secretary of Education the power to “waive or change any requirements or regulations” related to federal student aid programs for certain borrowers, including those who are on active duty in the military.

The SBPC urges the Secretary of Education to use this authority to waive the administrative requirements for applying for PSLF for borrowers who have served on active duty for at least 10 years. This would allow immediate and retroactive loan forgiveness for these borrowers.

“What we really want to do is get back to the basic idea, which was this promise the government made to officials across the country and especially military borrowers – that if you give back to your country for 10 years, “your loans would be forgiven,” Frotman said.

Any Secretary of Education could accept this suggestion, but Frotman, who worked at CFPB under the Obama administration – first as a senior advisor to Holly Petraeus, deputy director of military affairs and as a ombudsman for student loans – said the idea corresponded with a Biden administration, which campaigned to prioritize issues important to military families and first responders.

“It really articulates something that I think is well within the vision of the government that they are trying to present,” Frotman said of the suggestion.

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