We recently read an article in The Houston Chronicle about how members of the military are having a lot of trouble understanding their student loan obligations and why they are being charged what they are.
It seems like the majority of the problem boils down to complaints that financial institutions did not properly explain how student loan deferrals work, how much interest the service members would accrue once deferral ended, and how much they were entitled to receive in the first place.
Officials are not sure where mistakes occurred, but the military is planning to do more training and education to make sure military folks understand what their options are to fix their student loan debt issues. Defense Secretary Leon Panetta told reporters, "The number one reason people in the service lose their security clearance is because of financial problems. Student loans are one important part of the total debt burden—from mortgages to credit cards to other debt—on those who are serving in the military today."
The article also outlined a few benefits that military members can receive. These include:
- Monthly payment reductions based on income and family size
- Loan forgiveness after they've made a specific number of payments
- Getting the principal amount of the loan reduced for each year of military service
- Payment deferrals during active duty service
These men and women have devoted their lives to our country and it's important that they are well informed about the financial duties and obligations when it comes to their student loans.
Nationally, political leaders and economic planners are expressing increasing concern that default rates for college loans are skyrocketing. If you are having student loan debt issues, contact Houston debt management attorney J. Thomas Black for a free consultation at 888-707-1233.