IMPERIAL VALLEY NEWS: U.S. Department of Education Completes Review of Major Student Loan Servicers
Career College Central Summary:
As a part of the Obama Administration's commitment to protect student loan borrowers, the U.S. Department of Education conducted thorough reviews of the four major federal student loan servicers to ensure that the companies followed federal law when it comes to loan interest rates for active-duty servicemembers.
The reviews by the Department found that the four servicers – Navient, Great Lakes, PHEAA and Nelnet – complied in the vast majority of cases with the Servicemembers Civil Relief Act (SCRA) as required by the Higher Education Act (HEA). The reviews, which looked at active-duty servicemembers' SCRA eligibility between 2009 and 2014, show that in less than 1 percent of cases, borrowers were incorrectly denied the 6 percent interest rate cap required by the laws.
"For all of the sacrifices they have made on behalf of our country, our brave service members have the right to the benefits provided to them under federal law and should not be subjected to additional red tape to manage their student loans," said Under Secretary Ted Mitchell. "What's more, every student who has taken out a federal student loan should have the peace of mind that the Education Department's servicers are following the law and treating all borrowers fairly."
The Department streamlined the process for servicemembers so that their loan rates are adjusted when they are called to active duty. So far, more than 141,000 men and women in uniform have benefitted. Prior to this change, servicemembers had to apply for the lower interest rate and provide proof of active duty status.
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IMPERIAL VALLEY NEWS