The Pentagon will suspend efforts to recoup bonuses overpaid to troops more than a decade ago, Defense Secretary Ash Carter announced Wednesday.
Carter said the suspension would begin "as soon as is practical," according to a Pentagon statement.
"There is no more important responsibility for the Department of Defense than keeping faith with our people. That means treating them fairly and equitably, honoring their service and sacrifice, and keeping our word," Carter added.
"Today, in keeping with that obligation, I am ordering a series of steps to ensure fair treatment for thousands of California National Guard soldiers who may have received incentive bonuses and tuition assistance improperly as a result of errors and in some cases criminal behavior by members of the California National Guard.”
The issue has sparked widespread outcry from members of Congress, who called on the Pentagon to halt the recoupment efforts.
The Los Angeles Times reported Saturday that the Pentagon was trying to recoup more than $20 million from thousands of National Guard service members and veterans paid over a decade ago for re-enlisting at the height of the Iraq and Afghanistan wars.
The National Guard Bureau chief on Wednesday said that of 13,500 cases where bonuses or student loan payments were distributed, about 11,000 were found to have been given erroneously, due to ineligibility or due to not having the proper paperwork.
About 2,000 soldiers have been notified that they owe the money and have been threatened with wage garnishments, tax liens and interest charges.
Carter said while some of those soldiers "knew or should have known they were ineligible for benefits they were claiming, many others did not."
He added that although there is an established process by which troops can seek relief from debt, "that process has simply moved too slowly and in some cases imposed unreasonable burdens on service members."
"That is unacceptable," Carter said.
He said the suspension of collection efforts would continue "until I am satisfied that our process is working effectively."
The White House on Wednesday praised the Pentagon's decision.
"The president has been pleased to see in the last 24 hours the Department of Defense make specific commitments to ensure that our service members are treated fairly," White House press secretary Josh Earnest told reporters.
“We certainly want to avoid a situation where our service members are punished because of nefarious or fraudulent behavior by someone else.”
Carter said he has also ordered a team of senior department officials, led by the senior personnel official in his office, to assess the situation and establish no later than Jan. 1, 2017, a streamlined, centralized process that "ensures the fair and equitable treatment of our service members and the rapid resolution of these cases."
The goal is to resolve all cases no later than July 1, 2017.
Carter indicated that there could be relief for some troops who were paid improperly "through no fault of his or her own."
"Ultimately, we will provide for a process that puts as little burden as possible on any soldier who received an improper payment through no fault of his or her own. At the same time, it will respect our important obligation to the taxpayer," he said.
"I want to be clear: this process has dragged on too long, for too many service members. Too many cases have languished without action. That's unfair to service members and to taxpayers. The steps I've outlined are designed to meet our obligations to both, and to do so quickly.”
Jordan Fabian contributed.
— Updated at 12:22 p.m.