The SCRA and Student Loans—Senate Hearings Highlight Agency Collaboration on Investigative and Enforcement Activities


Congress enacted the Servicemembers Civil Relief Act (SCRA or “Act”), a law whose origins date back to the Civil War, to strengthen the national defense through certain protections provided to servicemembers. By protecting servicemembers from a gamut of penalties and commitments — high interest rates, foreclosure, and default judgments, to name a few of many — the SCRA allows servicemembers to “devote their entire energy to the defense needs of the Nation.” The Act, first formally enacted in 1940 as the Soldiers’ and Sailors’ Civil Relief Act, has been updated and amended to enhance such protections.

Although Congress recently considered, but did not pass, additional protections for servicemembers, federal agencies continue to monitor and focus on various forms of SCRA compliance, including compliance with SCRA protections related to student loans. Specifically, section 527 of the SCRA prohibits creditors from charging active duty servicemembers an interest rate above 6% per year for debts incurred prior to their military service and forgives interest above 6% that would otherwise be incurred.

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