Press Release of U.S. Senator Barbara Boxer

For Immediate Release:
November 20, 2012  
Contact:
Washington D.C. Office (202) 224-3553

Senators Call for End to Obstacles Facing Service Members with Student Loan Debt  

New Report Indicates that Some Student Loan Servicers May Be Wrongly Denying Service Men and Women Full Access to Benefits

Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) yesterday led a group of 24 Senators in writing to the Executive Director of the Student Loan Servicing Alliance, Winfield P. Crigler, to urge her to establish best practices to ensure that service men and women have access to the full range of student loan benefits that they are entitled to by law.

In the letter, the Senators wrote, “We were alarmed to learn that some student loan servicers are providing incomplete or inaccurate information regarding service members’ options for reducing their debt—often leading individuals to make decisions that have costly long-term consequences. In one particularly egregious example, a service member was guided toward a deferment plan that ended up increasing his total debt by $25,000. This is simply unacceptable.”

Approximately 41 percent of our service members are currently carrying student loan debt. According to Defense Secretary Leon Panetta, the main reason why troops lose security clearances is because of financial problems.

Over the years, Congress has enacted many important loan repayment protections and benefits—such as loan forgiveness programs and interest rate reductions—to help service members successfully manage their debt. However, a report issued last month by the Consumer Financial Protection Bureau’s (CFPB) Office of Servicemember Affairs found that many military men and women are facing significant challenges in fully accessing these benefits. Specifically, the report found that some student loan servicers are not providing clear, accurate information about available benefits or are forcing military borrowers to clear unnecessary hurdles in order to access the benefits they deserve.

“Our brave military men and women—and their families—make tremendous sacrifices each and every day in service to our nation. They should never have to fight for full access to the benefits they have earned, including student loan repayment protections,” the Senators wrote.

You can read the full text of the letter below:

November 19, 2012

Winfield P. Crigler
Executive Director Student Loan Servicing Alliance
1850 M Street NW, Suite 920
Washington, DC 20036

Dear Ms. Crigler:

We write to bring your attention to the Consumer Financial Protection Bureau’s (CFPB) recently published report, “The Next Front? Student Loan Servicing and the Cost to our Men and Women in Uniform.” We are deeply concerned by the report’s findings, which indicate that some student loan servicers may be wrongly denying service men and women access to the full range of benefits that they are entitled to by law.

As you may know, approximately 41 percent of our military men and women currently have student loan debt. To help service members successfully manage this debt, Congress has put in place a number of important loan repayment protections and benefits. However, it is clear from the CFPB’s report that service members are facing significant challenges in accessing these benefits.

We were alarmed to learn that some student loan servicers are providing incomplete or inaccurate information regarding service members’ options for reducing their debt—often leading individuals to make decisions that have costly long-term consequences. In one particularly egregious example, a service member was guided toward a deferment plan that ended up increasing his total debt by $25,000. This is simply unacceptable.

We were also disturbed to read that service members are being forced to navigate additional, unnecessary hurdles put in place by some student loan servicers in order to access the loan repayment protections they have earned. In particular, servicers should not require active duty military personnel to meet excessive verification requirements to receive or maintain eligibility for interest rate caps under the Servicemembers Civil Relief Act (SCRA) when the Department of Defense makes such information readily available online.

Our brave military men and women—and their families—make tremendous sacrifices each and every day in service to our nation. They should never have to fight for full access to the benefits they have earned, including student loan repayment protections.

As such, we urge you to establish and implement best practice standards to ensure that lenders and servicers provide service members with accurate, comprehensive information about benefits and protections, so these men and women can make informed decisions about their loan repayment options and successfully manage their debt.

Thank you for your consideration of this important request. We look forward to your prompt response.

Sincerely,


Barbara Boxer                       
United States Senator

Tim Johnson
United States Senator          

Tom Harkin                            
United States Senator

John F. Kerry
United States Senator    

Patty Murray                          
United States Senator

Patrick J. Leahy
United States Senator        

John D. Rockefeller IV      
United States Senator    

Bernard Sanders
United States Senator         

Barbara A. Mikulski              
United States Senator

Dianne Feinstein
United States Senator         

Jack Reed                            
United States Senator

Frank R. Lautenberg
United States Senator          

Kirsten E. Gillibrand 
United States Senator             

Benjamin L. Cardin
United States Senator          

Claire McCaskill                   
United States Senator

Ron Wyden
United States Senator          

Al Franken                           
United States Senator

Mark Begich
United States Senator         

Amy Klobuchar                    
United States Senator

Mark Udall
United States Senator         

Jon Tester                            
United States Senator

Sherrod Brown
United States Senator         

Sheldon Whitehouse
United States Senator            

Richard Blumenthal
United States Senator       

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