Student Loans May be Greatest Financial Battle for Military Members - NBC 10 Philadelphia

Student Loans May be Greatest Financial Battle for Military Members



    Service members are facing major financial problems because of unnecessary student loans.

    The author of a new report says problems with student loans may be even greater than the problems military members face with mortgage debt and foreclosures.

    The report was written by the Office of Servicemember Affairs within the Consumer Financial Protection Bureau, created partly as an ombudsman for student loans.

    It details some specific complaints from members of the military. For example, many servicemembers are adopting less favorable loan repayment plans, which may lead to thousands of dollars in excess debt.

    According to the report, in one case, a service member found that his approximately $60,000 in student loans increased to $85,000 when he deferred his payment for just five months.

    The report focused on private student loan complaints and found that financial institutions often give service members incomplete, or wrong information.

    Some financial institutions are even denying service members benefits they're entitled to, such as reduced interest.

    Marvin Veneracion is the Veterans Affairs coordinator at USD, and says he recommends that service members avoid taking out loans all together.

    “I usually tell them to talk to a financial aid counselor first what are the other options - there may be some other scholarships that can be funded for them first before pulling out the loans," Veneracion said.

    The report findings were based on requests for help and complaints from service members across the country. Many said they were met with surprises, run-arounds, and dead-ends in trying to resolve their debt issues when it came to repayment of student loans.