Army leaders are warning soldiers to be careful with their money, particularly as deployments wind down and they re-adjust to lower paychecks.
Secretary of the Army John McHugh and Army Chief of Staff Gen. Ray Odierno testified May 22 before the Senate Appropriations Committee, where discussion turned to predatory lending and shady for-profit universities.
Odierno spoke of loan sharks who “grab young soldiers very quickly, trying to take advantage of them with high percentage loans and other things.”
Despite a law placing a 36 percent annual interest/fee cap on consumer credit transactions, some lenders are still taking advantage of soldiers unaware of their rights.
Odierno urged soldiers to take the Army’s financial briefings to heart and visit their battalion-level financial advisers before making any decisions.
Holly Petraeus, director of Consumer Financial Protection Bureau’s Office of Servicemember Affairs, had some advice for soldiers she met with earlier this month in Korea.
“A bad credit report, a debt-collection action or other financial problem can be devastating to a service member’s career and even affect the mission readiness of a military unit, which often cannot use a service member who has lost a security clearance due to financial problems,” she said.
Another issue to be aware of as soldiers pursue higher education, while in the Army or after separation, are for-profit universities with predatory tuition schemes.
Since March soldiers have not be allowed to use tuition assistance funds at universities that haven’t signed the Defense Department’s “Voluntary Education Partnership” Memorandum of Understanding, but it hasn’t stopped some schools from offering enrollment incentives to soldiers as well as aggressively marketing to them. Additionally, soldiers are still able to use their GI Bill benefits to attend these schools.
Guidance on all of these issues is available within the Army structure, so the best advice is to consult with an adviser before taking on a new financial commitment.
“In the end, people who are trying to take advantage of other people adapt very quickly,” McHugh said.