U.S. Department of Education Grants Interest Rate Benefit to More Than 47,000 Service Members | site |


Automated process benefits 880% more current and former active-duty service members since 2019


(Information contained in U.S. Department of Education press release dated: August 20, 2021)

Today, the U.S. Department of Education announced that the office of Federal Student Aid (FSA) has retroactively waived interest on loans held by more than 47,000 current and former active-duty service members. This action was made possible by a data-matching agreement with the U.S. Department of Defense (DOD) that substantially improves access to a student loan interest-waiver benefit for many service members with federal student loans.

Under the Higher Education Act, service members deployed to areas that qualify them for imminent danger or hostile fire pay, have no interest accrual on certain federal student loans that were first disbursed on or after Oct. 1, 2008. In the past, only a small proportion of eligible service members successfully accessed this benefit. For instance, the Department waived interest for only approximately 4,800 service members in 2019 when it did not have the data-match in place. Now the Department is able to identify federal student loan borrowers who serve on active duty by matching records to DOD's personnel records. As a result, the Department can automatically provide the student loan interest benefit to eligible service members.

"Brave men and women in uniform serving our country can now focus on doing their jobs and coming home safely, not filling out more paperwork to access their hard-earned benefits," said FSA Chief Operating Officer Richard Cordray. "Federal Student Aid is grateful for our strong partnership with the Department of Defense, and we will seek to reduce red tape for service members wherever possible."

"The Department of Defense appreciates the efforts and commitment of the Department of Education in ensuring eligible service members received this benefit," said Virginia Penrod, Assistant Secretary of Defense for Manpower & Reserve Affairs at the Department of Defense.

Today's announcement means that service members are not required to take any action to receive the interest rate benefit. Prior to this new automation, service members had to make individual requests for the benefit and provide additional information confirming their eligibility.

Recently, the Department announced its intent to form a negotiated rulemaking committee to address issues affecting federal student loan borrowers. The announcement invited nominations from constituent groups, including U.S. military service members, veterans, and the groups that represent their interests. Nominations are open through August 31, 2021. This action aligns with President Biden's belief that we have a sacred obligation to care for our nations' veterans and their families, both while they are deployed and after they return home.