Biden freezes student loan interest for 47,000 military service members
President Joe Biden freezes interest on student loans for 47,000 military personnel.
Here’s what you need to know.
In another victory this week for student loan borrowers, the US Department of Education retroactively waived interest on federal student loans held by more than 47,000 active and former active duty members. This student loan relief improves access to a student loan interest relief benefit for service members through a data match agreement with the United States Department of Defense.
âThe brave men and women in uniform serving our country can now focus on their jobs and return home safely, without filling out more paperwork to access their hard-earned benefits,â said Richard Cordray, director of federal student aid operations. âFederal Student Aid is grateful for our strong partnership with the Department of Defense, and we will seek to reduce paperwork for the military where possible. “
Student Loan Relief: How This Interest Rate Freeze Works
Here’s how this student loan relief will work for eligible military members:
- Under the Higher Education Act of 1965, military personnel deployed to areas that qualify them for imminent danger or hostile fire pay will have no interest accruing on certain federal student loans that have been disbursed for the first time as of October 1, 2008.
- Historically, this student loan benefit was not available to a large number of military personnel.
- For example, in 2019, the Department of Education waived student loan interest for only about 4,800 military personnel. Why? Data correspondence between the Department of Education and the US Department of Defense was not available.
- Today, the Department of Education and the Department of Defense can match federal student loan borrowers who are on active duty.
- Now, this student loan benefit can be applied automatically.
Student loan relief follows cancellation of student loans
This student loan relief for the military follows Biden’s action to write off $ 5.8 billion in student loans for disabled student loan borrowers. Biden has now set aside $ 8.7 billion for student loan borrowers, which has helped nearly 500,000 federal student loan borrowers. Biden continued to pursue a targeted student loan cancellation strategy, which has resulted in student loan relief being provided to certain groups of student loan borrowers. Today’s announcement focuses on the military, while yesterday’s announcement focused on total and permanent disability student loan borrowers. Student loan cancellation previously offered student loan relief to student loan borrowers subject to the borrower defense against repayment rule as well as a total of over $ 1.5 billion in student loan cancellations. .
As Biden does a targeted student loan cancellation, it’s important to note that you might not qualify as this student loan discount does not apply to all student loan borrowers. Many federal student loan borrowers and private student loan borrowers will not qualify for this type of student loan forgiveness. Therefore, make sure you understand all of your student loan repayment options. Here are some smart ways to pay off student loans and save money:
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