The clock is ticking for military service members to apply for student loan forgiveness, and the Consumer Financial Protection Bureau is calling on student loan servicers to take the initiative to help identify eligible borrowers.
In a
“Many military borrowers have education loans that exceed the average mortgage for a home in America,” the CFPB post said. “For military borrowers, failing to get their PSLF application approved will force them to pay thousands or tens of thousands of extra dollars on their student loans unnecessarily.”
In 2007, Congress created the PSLF program to encourage students to go into public service professions, including teaching, public health, public safety and other professions by forgiving their educational debt if they have made 120 months of payments on that debt while working for a qualified employer. But for years, military borrowers have complained of the obstacles that prevented them from obtaining the benefits and protections available.
The CFPB published a
One borrower submitted a complaint, quoted in the report, stating that his loans were put into forbearance automatically without an affirmative request or his permission.
“I did not ask for my account to be placed in forbearance and as a result of this action, it is currently accumulating interest,” the borrower said. “To make matters worse, my account is accumulating interest at an incorrect and higher interest rate.”
In 2020, the Government Accountability Office reported that nearly 177,000 active-duty service members had eligible federal loans or loans that could be consolidated for eligibility for forgiveness under the PSLF, but only 124 service members had actually received that relief, according to the bureau’s post.
Last October, the Department of Education
Because the application requires information provided by the applicant’s student loan servicer, the CFPB called on loan servicers to proactively identify and alert their military borrowers that the PSLF benefits are available.
“Between active duty, moves between duty stations, and the pressures of military life, it is vital that student loan servicers are particularly attentive to service members’ needs,” the CFPB post said. “Managing student loan debt is a serious issue — these are not trivial amounts of money.”
The bureau has also prompted servicers to clearly inform military borrowers about the PSLF waiver and all of its benefits, writing: “This outreach is the right thing to do.” Poor communication of afforded benefits was a complaint from borrowers in the past.
“Service members have dedicated their lives to protecting the United States — it’s time to protect their financial futures,” the CFPB wrote.
