Time is running out for military service members to apply for student loan forgiveness, and the Consumer Financial Protection Bureau is calling on student loan services to take the lead in helping identify eligible borrowers.
In a blog post released on Monday, the CFPB urged student loan servicers to help military borrowers submit their requests for public service loan cancellation before the Oc. 31 debt relief deadline for payments that were not previously eligible.
“Many military borrowers have student loans that exceed the average mortgage for a home in America,” the CFPB post said. “For military borrowers, failure to have their PSLF application approved will result in them needlessly paying thousands or tens of thousands of additional dollars on their student loans.”
In 2007, Congress created the PSLF program to encourage students to enter public service professions, including teaching, public health, public safety, and other professions by canceling their student loan debt. if they made 120 months of payments on that debt while working for a qualified person. employer. But for years, military borrowers have complained about the barriers preventing them from obtaining the benefits and protections available.
The CFPB published a report in 2012, documenting complaints of “sloppy student loan service”, detailing problems with payment deferrals and difficulties obtaining guaranteed protections under the Member Civil Assistance Act, among others.
A borrower filed a complaint, cited in the report, saying his loans were suspended automatically without an affirmative request or his authorization.
“I did not request that my account be placed on forbearance and as a result of this action it is currently accruing interest,” the borrower said. “To make matters worse, my account is accruing interest at the incorrect and higher interest rate.”
In 2020, the Government Accountability Office reported that nearly 177,000 active duty service members had qualifying federal loans or loans that could be consolidated to be eligible for forgiveness under the PSLF, but only 124 service members actually received this relief, according to the bureau’s post. .
Last October, the Ministry of Education temporary changes announced PSLF program rules to increase access for one year. Now, those who are eligible must apply within the remaining three months before the end of October in order to receive benefits.
Because the application requires information provided by the applicant’s student loan officer, the CFPB has called on loan officers to proactively identify and alert their military borrowers that PSLF benefits are available.
“Between active duty, travel between duty stations and the pressures of military life, it’s critical that student loan managers be especially mindful of the needs of the military,” the CFPB post said. “Student debt management is a serious issue – it’s not trivial amounts of money.”
The office also urged the services to clearly inform military borrowers of the PSLF waiver and all of its benefits, writing, “This outreach is the right thing to do.” Miscommunication of benefits granted was a complaint of borrowers in the past.
“The military has dedicated their lives to protecting the United States – it’s time to protect their financial future,” the CFPB wrote.