Skip to content

Murray Presses Acting Education Secretary on Refunds and Accountability for Servicemembers Overcharged on Student Loans

At Murray’s urging, the U.S. Department of Education pledged to refund military borrowers who were denied their right to have student loan interest rates capped under the Servicemembers Civil Relief Act


At LHHS hearing, Acting Secretary Dr. John King said refunds would come in “short order” and new reviews would be launched “shortly”


(Washington, D.C.) – Following the U.S. Department of Education’s announcement earlier this week that it would refund money to all military borrowers who were charged more than six percent interest on their federal student loans between 2009 and 2014, today, Senator Patty Murray (D-WA), Ranking Member of the Labor, Health and Human Services, Education and Related Agencies (LHHS) Appropriations Subcommittee, pressed Acting Secretary of Education Dr. John King on when these servicemembers should expect a refund and when a valid review would be conducted. In response, King said the refunds would come in “short order” and that the Department “will launch that new review shortly.”


Murray: …Now, we talked about this and I am really pleased that the department has committed to refund all of those military borrowers for the money that they were overcharged—correcting the most disturbing finding in that IGs report. But, (I) remain troubled that they occurred in the first place, and that a valid review of compliance with the SCRA still has not been conducted. Our veterans, our students, our families deserve better and I wanted to ask you: what is now the timeline for issuing those refunds to our military borrowers?

King: I share your concern about this issue and we want to make sure we protect our military borrowers. As you indicated, since 2014 we’ve used a data match with the Department of Defense that has allowed us to provide the benefit to all eligible borrowers. We have acted now to have the servicers go back and apply that data match system to all borrowers from 2008 to 2014, to ensure that any borrower who would have benefitted from this benefit has that opportunity, whether they applied for it or not. Our next step is to conduct a new review informed by the findings of the Inspector General’s report. We will launch that new review shortly, guided by the Inspector General’s recommendations on methodology. And that review will then help us decide next steps with the servicers, with respect to what happened prior to 2014.

Murray: So, when do you actually expect those refunds to be issued to the borrowers themselves?

King: So, we expect the refunds to come quite quickly. We will go year by year, working with the Department of Defense on this data match. So we hope that will happen in short order and then we will conduct this additional review as well.

Murray: Well I’m going forward. You and I are going to have many discussions about how we make sure that student loan borrowers are well served and this doesn’t happen again and benefits are not denied to our military or anyone.


In 2014, allegations surfaced that the student loan servicer Sallie Mae, now named Navient, had been overcharging servicemembers on the interest for their student loans. The Servicemembers Civil Relief Act (SCRA) requires companies to cap interest rates at six percent while servicemembers are on active duty, among other protections. Murray has led on efforts to demand help for military borrowers who were overcharged, including a recent letter with other senators, criticizing the Department’s initial review of servicers that papered over mistreatment of military borrowers and seeking a full review to determine how many servicemembers were denied interest rate caps for which they were eligible.


Watch video of their exchange here.