The Department of Education received a scrutinizing observation from its internal inspector. Responsible for the management of student loans, the Office of the General (OIG) Inspector gave the Department a fiery review for its treatment and handling of loans for military-related borrowers.
The treatment of our soldiers has always been a sensitive topic, especially in the case of providing benefits, much less student loans. The scathing verbal scrutiny comes from the fact that the majority of soldier veterans were not compensated for the percentage owed charged from loan vendors. In other words, soldiers took out loans and were charged in excess, which should’ve resulted in a repayment of the total excess owed to them.
The principle idea was that soldiers were entitled to an interest cap of their loans at 6 percent; this coming from the SCRA (Servicemembers Civil Relief Act). The General Inspector review found, however, that not only did investigated soldiers not receive this beneficiary cap, but they were also charged far more in interest. The oversight was also remarked upon by Senator Patty Murray, a Democrat based in Washington, who was appalled by the lack of proper handling over the issue.
The problem comes from several areas, according to both senator and investigating elements. The Department of Education was responsible for enforcing the compensation to over-charged veterans, holding accounts like Sallie-Mae responsible. These banks also hold blame for utterly failing to oversee the interest cap meant for other benefits, along with a slew of various affronts to treatment of student loans.
The Office of the General Inspector found issues cropping up from the lack of proper handling two years before. Originally, the issues of compensation began with other lenders, such as Great Lakes Education. This prompted the Department of Education to begin an investigation and enforcement of compensation, albeit the lack of such is what the OIG found troubling and problematic. Fast forward to today, and the issue has still not been resolved.
As it stands, the reasons for oversight are a secondary issue, as the OIG and Department of Justice will begin reviewing who is ultimately responsible for this poor treatment of soldier veterans.