More than 47,000 service members will have the interest retroactively waived on their federal student loans, the U.S. Department of Education announced on Friday. The new automatic waiver is intended to make the military student loan interest waiver more widely accessible to qualifying borrowers, with an estimated 880 percent more current and former active-service duty members benefiting now than in 2019.
Service members can now receive the interest waiver automatically
Under the Higher Education Act, service members deployed to areas that qualify them for imminent danger or hostile fire pay are eligible to receive interest waivers on certain federal student loans that were first disbursed on or after Oct. 1, 2008.
However, prior to the Department of Education’s announcement, borrowers had to request the waiver and submit the proper documentation proving eligibility. With no automatic data matching in place, very few eligible service members actually received the benefit; in 2019, only 4,800 members received it.
Thanks to a data matching agreement with the U.S. Department of Defense, qualifying former and current active-duty service members can now have their federal student loan interest rates waived automatically. This agreement removes a major barrier in service members receiving the relief that they’re lawfully entitled to.
“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,” said Federal Student Aid Chief Operating Officer Richard Cordray in a statement on Friday. “Federal Student Aid is grateful for our strong partnership with the Department of Defense, and we will seek to reduce red tape for service members wherever possible.”