Members of the military who are working to repay private studentloans are facing difficulties in the process. That's the consensusof a new report released by the Consumer Financial ProtectionBureau.

|

The report, which is titled “The Next Front? Student LoanServicing and the Cost to Our Men and Women in Uniform” and basedmostly on consumer complaints filed with the CFPB, explains thehurdles servicemen and women face in obtaining the private studentbenefits promised to them under laws and programs implemented byCongress, CFPB said.

|

These laws and programs include the Servicemembers Civil ReliefAct, which provides an interest rate reduction to those whoacquired student loan debt before going on active duty, and theIncome-Based Repayment program, which offers lowered monthlypayments according to income level and family size.

|

There are three central complaint themes in the report, CFPBsaid: a lack of complete, accurate loan repayment information,difficulty navigating the student loan benefits system, androadblocks for borrowers who are trying to retrieve their benefits,CFPB said.

|

“We are concerned that our men and women in uniform are notbeing given the opportunities they have earned under federal law,”said CFPB Director Richard Cordray. “For all the service ourmilitary members give us, the least we can do is protect them fromthis kind of disservice.”

|

Student loan debt can negatively affect service members more sothan the average consumer, as defaults can impact their securityclearances and military careers, and debt can be tough to handlewhile serving overseas, according to the CFPB.

|

Citing the National Center for Education Statistics, the bureausaid the average, cumulative amount of federal and private studentloan debt for active duty service members who graduated college in2008 was around $26,000.

|

The CFPB also announced a new, multi-pronged partnership withthe Department of Defense that aims to raise awareness about thebenefits owed to student borrowers serving in the military.

|

As part of the partnership, the bureau said staff members willtrain judge advocate generals and education services officers, aswell as assist personal financial counselors located on militarybases. The agency has also released an electronic guide for servicemembers taking out student loans.

|

Back in November 2011, the CFPB asked the general public for feedback on the private studentlending market. The agency published more than 2,000 complaint-ridden comments online inJune, which were followed by the release of a private student loan report with the U.S. Department ofEducation in July.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Natasha Chilingerian

Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.