House Education Committee Chair Calls for Streamlined Loan Benefits

House Education and Workforce Committee Chairman John Kline (R-MN) sent a letter to U.S. Education Secretary Arne Duncan asking for input on how Congress might streamline the processing of interest rate benefits for active duty servicemembers.

Under the Servicemembers Civil Relief Act (SCRA), student loans taken out by borrowers on active duty prior to military service are capped at 6 percent. The statue requires servicemembers to provide a copy to the loan servicer of his or her military orders and a written request that the SCRA benefit be applied.

Recent reports from the Consumer Financial Protection Bureau found that servicemembers were having trouble obtaining and providing that documentation, and loan servicers were not always able to verify borrowers' active duty status to alleviate either of the requirements.

Rep. Kline expressed concern that the SCRA requirements create unnecessary obstacles and cause significant delays in the processing of benefits, and asked Education Secretary Duncan to suggest legislative remedies to streamline processing.

 

Related Links

Letter to U.S. Education Secretary Arne Duncan

http://edworkforce.house.gov/uploadedfiles/10-23-13-ed-interest_rate_benefits_for_servicemembers_final.pdf