I urge you to voluntarily establish a liaison for servicemembers and veterans with student loan accounts serviced by your company to help these borrowers navigate the rights and protections afforded to them under the Servicemembers Civil Relief Act (SCRA) and other Federal laws. The Servicemember and Veteran Liaison should be specifically trained so they can help our armed forces access the student loan benefits they are owed under the law and make sure they fully understand their repayment options.
A growing number of servicemembers are joining the military with existing student loan debt, and Congress has enacted a number of protections for these servicemembers. For example, SCRA applies a six-percent interest rate cap on pre-service loans held by members of the military, including federal and private student loans. Eligible servicemembers with federal student loans also may take advantage of Income-Based Repayment, Public Service Loan Forgiveness, Annual Principal Reduction for Perkins Loans, and Military Deferment.
Recent federal enforcement actions show these benefits have been denied to servicemembers despite servicers' legal requirement to provide them. A 2012 report by the Consumer Financial Protection Bureau finds that servicers may be uninformed about the available benefits for our armed forces and may be providing inaccurate information about whether a servicemember is eligible. In effect, the servicer denies a military borrower's rightful benefits. I am troubled that those who have served our country are being denied the benefits they have earned through their service to this country simply because they have not been advised of them.
Student loan servicers can and should do more to ensure our armed forces are provided the information they need to make educated decisions about repayment options. I introduced the Student Loan Borrower Bill of Rights (S. 1803) last year that would require student loan servicers to establish a Servicemember and Veterans Liaison trained on the benefits available to servicemembers and veterans and to provide a toll-free number where the liaison can be reached to answer questions from members of the military and veterans.
By voluntarily establishing a Servicemember and Veteran Liaison position, you can set a strong example of your dedication to looking out for the financial well-being ofthe men and women who have served our country.
Thank you for your consideration of this request. Please respond and let me know of your plans.