These days, many military members face significant economic issues for a number of reasons, and one that has recently drawn the attentions of the federal consumer watchdog is the way in which student loan debt can adversely affect them.
In recent months, many military members have lodged complaints both with the Consumer Financial Protection Bureau and the U.S. Department of Defense about the ways in which they have access to legally-guaranteed help in dealing with their student loan payments, according to a report from the CFPB. Now, those two government agencies are coming together to do more to make sure all protocols are being met.
“We are concerned that our men and women in uniform are not being given the opportunities they have earned under federal law,” said CFPB director Richard Cordray. “For all the service our military members give us, the least we can do is protect them from this kind of disservice.”
One major issue is that many servicemembers, like other consumers, have student loan debt spread across a mix of financing from both the federal government and private lenders, the report said. The most recent statistics – which were compiled by the National Center for Education Statistics for 2008 – show that the average military member owes $26,000 on these loans.
This amount of debt can affect everything from members’ security clearances to their ability to advance in their militarycareers, and can be particularly troubling to those on active duty for similar reasons, the report said. In many cases, servicemembers say they often receive incomplete or inaccurate information about their debt and the protections available to them, such as military-specific deferrals or even forbearances. Further, many don’t fully understand the benefits available to them or have difficulty in figuring out which will work best for them.
Perhaps most troubling, though, is that even in some cases where servicemembers know exactly what benefits they need, they run into blocks that prevent them from proceeding, the report said. This includes loan servicers necessitating resubmission of paperwork for those on active duty, who may not have the time or ability to fill out more documents.
[Featured Products: Research and compare military loans at Credit.com]
Military members may also face significant struggles with regard to their finances when they receive permanent change of station notices, and have little time to sell their homes.
Image: familymwr, via Flickr