Veterans and service members with student loans may be eligible for special programs that forgive interest on their loans, or even cancel their entire loan liability in special circumstances. What's better, the Department of Education is working with other government agencies to provide these benefits automatically with no action necessary on the borrower's part.
Student Loan Interest Waiver for Hostile Fire or Danger Pay Recipients
In a recent press release, the Department of Education said it is writing off the interest on student loans of more than 47,000 veterans and military members who received imminent danger or hostile fire pay during their military service.
Federal law specifies that service members deployed to areas qualifying them for imminent danger or hostile fire pay do not have to pay interest on certain federal student loans received on or after Oct. 1, 2008. Previously, to receive this interest waiver, a member had to request it and provide proof of their eligibility by providing orders or a leave and earnings statement (LES) as proof.
Recently, however, the Department of Education initiated a data sharing agreement with the Defense Department, allowing the agency to determine automatically who is eligible for the interest waiver and forgive any interest erroneously charged to service members or veterans. The interest waiver is retroactive to 2008.
Total Forgiveness of Student Loans for Disabled Veterans
In a related matter, the Department of Education also recently announced that it will be forgiving the student loans worth $5.8 billion to more than 323,000 totally disabled borrowers. This includes veterans receiving disability benefits from the Department of Veterans Affairs as well as those receiving disability benefits from the Social Security Administration.
Again, a data sharing agreement between the Department of Education and other government agencies will allow this loan forgiveness to be automatically applied.
The loan forgiveness should be automatically applied to all eligible loans. Contact your lender for more information.
Public Service Loan Forgiveness
Military members and federal employees who have at least 10 years of federal service can have their student loan debt written off if they make at least 10 years worth of payments on those loans.
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