Education Department under fire over military student borrowers

The Department of Education is coming under congressional scrutiny for allegedly turning a blind eye to members of the military who were overcharged for their student loans.

Senate Democrats urged acting Education Secretary John B. King Jr., to “correct this injustice” in a letter sent Thursday.

"The men and women in uniform who were overcharged on their student loans while serving our country deserve better,” the Democrats wrote.

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It comes after an inspector’s general report earlier this week blamed the Education Department for not protecting student borrowers who are in the military.

Federal law requires that the interest on student loans be capped at 6 percent for members of the military who are on active duty. But the inspector’s general report found many servicers of student loans are not complying with the caps and the department has done little to stop them.

The Justice Department settled complaints against Navient in 2014. As part of the settlement, Navient returned $60 million to more than 100,000 students who were charged too much interest while on active duty in the military.

"The IG confirms what we have said all along: that the Department of Justice imposed a different standard for Navient than the statute and the Department of Education required of its other servicers," the company's spokesperson told The Hill. "Navient is the only servicer that reviewed its entire portfolio and provided benefits retroactively to all customers eligible under the new DOJ-mandated standard."

The Education Department should also step in to protect military students whose federal loans are being handled by other servicers, the Democrats argued. They called on the agency to conduct a fresh review of three servicers: Great Lakes, Nelnet, and the Pennsylvania Higher Education Assistance Agency.

"Eligible servicemembers whose loans happened to be serviced by a servicer other than Navient have not received any compensation for the interest they were unlawfully charged above six percent while on active duty,” they wrote.