Education Dept. to Cancel Student Loan Interest Retroactively For 47,000 Service Members

The U.S. Department of Education announced that it will retroactively waive student loan interest held by more than 47,000 current and former active-duty service members.

Under federal law, military service members deployed to areas that qualify for imminent danger or hostile fire pay were previously eligible to have interest waived on federal student loans first disbursed on or after Oct. 1, 2008. However, due to the complicated documentation process required to request the relief, few ever benefited from the law. For some, that meant their loans were accruing ongoing interest even while deployed.

Now, thanks to a new data-matching agreement with the U.S. Department of Defense, eligible service members will automatically receive the student loan interest benefit, meaning they'll no longer have to request it individually or provide all the required documents themselves.

“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.