Nearly 10,000 current California Army National Guard members and veterans who were told that they had to repay enlistment bonuses they had received erroneously were given a reprieve recently. Secretary of defense Ash Carter used his executive powers over the military to suspend collections from the Defense Finance and Accounting Service.

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Carter said in a statement that the repayment freeze will continue until he is satisfied that the DFAS collections process is “working effectively,” according to Politico.

He also ordered DFAS to review the way it collects debts and implement a new system by which it will decide if the service members and veterans actually owe the government or are eligible for debt forgiveness by July 1, 2017, according to Politico.


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Politico reported that Carter decided to suspend the bonus repayments after lawmakers from California such as Reps. Kevin McCarthy and Nancy Pelosi and Sens. Barbara Boxer and Dianne Feinstein asked the Pentagon to either halt the repayments outright or allow them to come up with legislative solutions to fix the problem.

Before Carter issued his blanket deferment of the debts, current and former military members were able to petition DFAS to ask that their debts be waived on a case-by-case basis, according to CNN.

The service members received the bonuses at the height of the Iraq War in 2003 — a time when the military was struggling to retain service members. Only those with certain jobs were supposed to receive the bonuses, but due to fraud by recruiters trying to meet enlistment quotas, some service members who were ineligible for bonuses received them, according to CNN.

For many service members who were told to repay the bonuses, the debt was at least a decade old and included a host of fees and penalties on top of the original bonus, CNN reported. It also caused some who had been in the California Army National Guard to experience undue financial hardships because the debt was sometimes collected via wage garnishment.