Biden Administration Waives Student Loan Interest Retroactively for Military Servicemembers

The U.S. Department of Education has retroactively waived interest on federal student loans for more than 47,000 current and former active duty servicemembers.

By , Attorney

Under the Higher Education Act, military servicemembers who are deployed to areas that qualify for imminent danger or hostile fire pay don't have to pay interest on specific federal student loans that were first disbursed on or after October 1, 2008. In the past, servicemembers had to request this relief (it wasn't provided automatically) and the documentation requirements were burdensome. So, few eligible servicemembers accessed this benefit.

But on August 20, 2021, the U.S. Department of Education announced it is retroactively waiving student loan interest for thousands of current and former active duty military servicemembers.

What Kinds of Federal Student Loans Qualify for an Interest Waiver?

Federal Direct Loans made on or after October 1, 2008, as well as the portion of a Direct Consolidation Loan that represents these loans made on or after October 1, 2008, are eligible for the interest waiver.

How the Automatic Interest-Waiver Process Works

Servicemembers whose student loan interest wasn't waived during their time serving in a hostile area will get a retroactive waiver. The waivers are completed through a data-matching agreement with the U.S. Department of Defense (DOD). With this process, the Education Department identifies federal student loan borrowers who qualify by matching its records to the DOD's personnel records.

Earlier Student Loan Relief Under the Biden Administration

Since taking over the presidency, President Biden has canceled billions of dollars in federal student loan debt. In addition to the interest waiver discussed in this article, the Biden administration has:

Also, the American Rescue Plan Act exempts student debt forgiveness from federal taxation until January 1, 2026, and covers Direct Loans, FFELs, and private student loans.

Effective date: August 20, 2021