Army makes it easier for Soldiers to recieve interest free loans (AER). Is this a good idea?

2015-09-12T11:11:14-04:00

Should Soldiers be allowed to recieve AER loans without Command approval?

http://www.armytimes.com/story/military/benefits/on-base/2015/09/12/army-makes-easier-get-interest-free-loans/72017260/

Army makes it easier to get interest-free loans

Most soldiers with more than a year of service can now go directly to the Army Emergency Relief program for financial help.

Response by Capt Seid Waddell made Sep 12 at 2015 12:35 PM

2015-09-12T12:35:32-04:00

No. It is a good way to end up sideways.

Response by SGT Scott Bell made Sep 12 at 2015 12:41 PM

2015-09-12T12:41:10-04:00

Response by SN Greg Wright made Sep 12 at 2015 1:01 PM

2015-09-12T13:01:36-04:00

No.

Response by COL Jon Thompson made Sep 12 at 2015 5:21 PM

2015-09-12T17:21:41-04:00

I would not have an issue with this except that I bet the commander will have to get involved if the Soldier falls behind on repayments. If that is the case, the commander should be aware of what the Soldier is doing. Otherwise, as long as AER has adequate controls on how much money is given and how often, it might work.

Response by SSG Private RallyPoint Member made Sep 12 at 2015 6:06 PM

2015-09-12T18:06:01-04:00

I think it's a good idea, especially if they are using those loans to help them climb out from under a burden of debt or escape the clutches of payday lenders who can charge interest rates over 1,000% APR.

Response by SSG Private RallyPoint Member made Sep 12 at 2015 6:12 PM

2015-09-12T18:12:37-04:00

As we all know, there are soldiers that get paid Friday and are broke on Saturday. This might make the pit even deeper? On the otherhand, this might be an Army retention tactic? You have to stay in until your loan is paid back! LOL!!!

Response by 1SG Private RallyPoint Member made Sep 12 at 2015 7:04 PM

2015-09-12T19:04:12-04:00

I have already dealt with this as a 1SG on multiple occasions and can say it seams to be doing well. Regardless of commanders approval, each Soldier still has to go through the vetting process. EAR still reviews the circumstances behind the loan and checks the actual need. What needs to be happening is more AER Grants instead of loans. Every year countless SMs donate to AER. AER utilizes this money to make loans, which get paid back through automatic deductions from SMs pay. So basically that money gets put back into the pot. The interesting part is how difficult getting a Soldier the AER Grant can be. Trying to get an AER grant for a SM can be like dealing with a Honey Badger.

Response by SFC Private RallyPoint Member made Sep 12 at 2015 8:58 PM

2015-09-12T20:58:17-04:00

I think it is a good idea. Soldiers with financial difficulties are less likely to go to their chain of command because of the fear of being punished. From the first counseling statement we tell soldiers to take care of their finances. We tell horror stories of financially irresponsible soldiers. That fear of asking leaders for help drives them off post to borderline criminal interest rates. No need to involve chain of command in the AER process. More will get the help they need, through fine-toothed-comb vetting and the money taken out of the soldier's pay. Good job on this one Army.