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The next front? Student loan servicing and the cost to our men and women in uniform

Today, I joined the Secretary of Defense at the Pentagon to announce a report about the servicing obstacles that servicemembers face in paying off student loan debt. The report, “The Next Front? Student Loan Servicing and the Cost to Our Men and Women in Uniform,” shows that servicemembers are having a hard time accessing the student-loan repayment protections granted to them under federal rules.

Since I began this job almost two years ago, I’ve visited over 40 different military installations – talking to senior leaders, military service providers and thousands of servicemembers and spouses. One thing I’ve heard repeatedly is that servicemembers are entering the military with – and sometimes because of –student-loan debt, and, as a result, are facing both financial challenges and paperwork challenges. And unfortunately they are not always getting the information they need from their loan servicers about programs and policies that could help them reduce that debt significantly while they’re on active duty.

We’re hearing that servicemembers are having problems getting their lenders to correctly apply their SCRA rights. They also don’t know about their repayment alternatives, and are getting inaccurate or incomplete information about their options. And they’re confused by eligibility requirements for benefits that are so complicated that they either can’t figure out what they’re entitled to or don’t realize that taking one benefit might exclude them from being eligible for another, more helpful, one.

One particular conversation with a young sailor stands out. He was just out of basic training at Naval Station Great Lakes. He told me that he entered the Navy with over $100,000 in student loan debt – and no degree! He joined the Navy because it was the only way he believed he could “make it,” but most of his Navy paycheck was going towards paying off those loans.

How he chooses to pay off his debt is not a matter of just a few dollars and cents. That young sailor could pay nearly $25,000 extra if he doesn’t receive his Servicemembers Civil Relief Act (SCRA) six-percent interest-rate cap while he’s on active duty. And if he stays in the Navy for 10 years but doesn’t know about or doesn’t use the Income-Based Repayment plan, the Public Service Loan Forgiveness program, and the SCRA rate cap, he could lose out on nearly $76,000 that he could have cut off his debt in those 10 years.

We’ll be teaming up with DoD to get the word out about military student-loan benefits and consumer protections. We’ve developed a “Guide for Servicemembers with Student Loans” with information on repayment options, as well as an FAQ section for military student loan borrowers. Servicemembers with problems in the servicing of their student loan debt can also file a complaint at And we want servicemembers to know that even if you didn’t ask for student loan repayment benefits when you entered active duty, it’s not too late to do it now!

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