Student loan debt is a huge issue for many families. The Consumer Financial Protection Board knows that student loan repayment is an important topic. Today, their Servicemember Affairs group had a Military Educator Forum to discuss loan repayment options available to the military. While I wasn’t invited to attend, I did follow along on Facebook. Here’s what I read there:
SCENARIO 1: After venting to his mom about his crushing student loan debt, fictional servicemember Adam Krahn visits Angela, a personal financial manager, for help. He’s frustrated and desperately wants answers. Angela tells him that other servicemembers like him can owe as much as $25,566 in student loans, aren’t getting accurate information from their servicers about repayment options, and often don’t understand their legal protections. She starts off by explaining to Adam what a loan servicer does and then refers him to an education services officer for further assistance. http://1.usa.gov/16GSLjZ
SCENARIO 2: Relieved that his situation is common, Adam visits Patrick, an education services officer (ESO). He learns loan repayment options can be complicated, and that deferments or forbearance are not the best options. They can add thousands of dollars in interest and make him ineligible for better repayment programs like Income-Based Repayment (IBR) or the Public Service Loan Forgiveness (PSLF). Patrick tells Adam that checking whether his loans are federal or private student loans through the Department of Education’s National Student Loan Data System (NSLDS) will help him figure out the best options. Patrick refers him to the JAG Office for information on how the SCRA can help:http://1.usa.gov/ZXENos
SCENARIO 3: Melissa, a legal assistance attorney, explains to Adam that he can use the Servicemembers Civil Relief Act (SCRA) to reduce the interest rate on all his pre-service student loans to 6%. He has to send a written request to his loan servicer along with a copy of his military orders. That rate reduction could save him thousands of dollars and is guaranteed by law. She lets him know that can submit a consumer complaint to the CFPB if he is denied or has any trouble with his loan servicer:http://1.usa.gov/16GSOMD.
SCENARIO 4: Adam still can’t believe how complicated student loan repayment options can be. He’s learned that his best choice is to work with qualified professionals like PFMs, ESOs, and JAGs to help him work through which options for his student loan situation. He knows he can find them at any installation by visitinghttp://1.usa.gov/16GSSMf.
While this is the strangest post I’ve ever written (a string of someone else’s FB status?), I think that there is some useful information here. I had no idea that so many military resources were available to help make smart decisions about loan repayment questions. If you have student loan debt, be sure to learn every aspect of every option before you take action. You’ll ensure the best decision for your current situation, and for your future success.
Have you used military resources to make decisions about student loans? Was it helpful? Would you recommend it to others?