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Source: US State of California

Wednesday, November 11, 2020

Contact: (916) 210-6000, agpressoffice@doj.ca.gov

SACRAMENTO – California Attorney General Xavier Becerra today submitted a letter to Secretary of Education Betsy DeVos and Acting Secretary of Defense Christopher C. Miller seeking updates on their efforts to relieve servicemembers of their obligation to pay interest on student loans while they are serving in a combat zone. In 2008, Congress waived all interest charges for direct student loans for servicemembers who are serving on active duty during a war, military operation, or national emergency, and who are receiving hostile fire or imminent danger pay. However, it is estimated by the Consumer Protection Bureau that as of 2015, military borrowers who were eligible for this forgiveness had paid more than $100 million in unnecessary interest charges on their federal student loans. In today’s letter, Attorney General Becerra urges Secretary DeVos and Acting Secretary Miller to make every effort possible to ensure that payments on unnecessary interest charges are automatically refunded, and that eligible servicemembers are protected from unlawful over-charges moving forward.

“Today, we recognize the service and sacrifice of military servicemembers, veterans, and their families. These American heroes have stood up for us, so in whatever way each of us can we must stand by them,” said Attorney General Becerra. “Historically, the Department of Education has failed to honor its commitments to our nation’s servicemembers, including the obligation to provide student loan interest relief for combat veterans. Every dollar counts to a servicemember with outstanding student loan debt. I am seeking information from the Pentagon and Department of Education to determine if these agencies are following through with their obligations to those who have devoted their lives and careers to serve and protect our country. It’s time to turn the corner.”

Last November, the Department of Education and Department of Defense announced a proposed data matching program that would provide automatic debt relief to eligible combat veterans. Since then, it is unclear whether, and to what extent, this program has been implemented or used to provide refunds or other debt relief to qualifying borrowers. In the letter, Attorney General Becerra calls on the agencies to confirm whether an automatic debt relief program has been implemented for qualifying borrowers. If the program has been implemented, the letter seeks a description of the program, as well as crucial information regarding the administration and effectiveness of student loan relief for qualifying servicemembers. If the program has not yet been implemented, the letter requests an explanation as to why not, and seeks information on the number of borrowers who are entitled to relief, but have not yet received it.

Attorney General Becerra is committed to protecting and supporting our military families. In May 2019, Attorney General Becerra sent a letter urging the Department of Education to discharge the student loans of tens of thousands of veterans who were disabled as part of their service, by developing an automatic discharge program. In June 2020, Attorney General Becerra filed suit against Secretary DeVos and the Department of Education for its failure to implement the Temporary Expanded Public Service Loan Forgiveness program. Furthermore, in October 2018, Attorney General Becerra submitted a letter to the Consumer Financial Protection Bureau condemning Acting Director Mick Mulvaney for stripping the agency’s oversight of lenders under the Military Lending Act. In addition, the Office of the Attorney General was instrumental in advocating for an automatic closed school discharge provision in the Obama-era Borrower Defense rule, which was adopted following a negotiated rulemaking involving our office, and which provided automatic discharges to student-borrowers who had attended ITT Technical Institute and Corinthian Colleges.

A copy of the letter is available here.

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