16:24 GMT26 January 2021
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    The US General Accountability Office reported that some members of the US military are unable to take advantage of a US law capping loan interest rates at 6 percent because they are being told by Pentagon that the law does not apply to student loans.

    WASHINGTON (Sputnik) — Some members of the US military are unable to take advantage of a US law capping loan interest rates at 6 percent because they are being told by the Department of Defense (DOD) that the law does not apply to student loans, the US General Accountability Office said in an audit report.

    "Some DOD information states that the rate cap does not apply to student loans," a press release summarizing the audit said on Friday. "In addition, because the automated process to identify eligible service members is not required for private student loans, service members with private loans may be particularly at risk of not receiving the accurate information needed to obtain the cap themselves."

    The Service Members Civil Relief Act (SCRA) was intended to help service members financially by limiting interest on student loans to 6 percent while on active duty, the release explained.

    While borrowers from federal student loan programs typically receive accurate information, borrowers from private and especially non-bank lenders often fail to get correct information that they are also eligible for the reduced rate, the release noted.

    The release said that the Defense Department disagreed with the audit by claiming it already provides accurate information.

    The US Department of Justice agreed with the audit’s findings, while a third US agency, the Consumer Financial Protection Bureau did not specifically agree but acknowledged that all eligible service members should receive the cap, according to the release.


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    Student Loans, US Department of Defense (DoD), Pentagon, US
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