Student Loan Forgiveness and Repayment for Military and Veterans
Explore student loan forgiveness and repayment for military and veterans programs. Discover the deferment options available for military veterans.
Updated by Gowtham Ramesh on 28th October 2020
There are multiple programs available for men and women enlisted in any military service which aids them in the payment of their education loans. The majority of the public are unaware of the financial help and benefits they could get after college, especially when it comes to student loans. Although it changes, there are many programs available for active-duty members and veterans. They can make use of these opportunities to get over all pending student loans.
Student Loan Forgiveness and Repayment for Military and Veterans are programs made available to military veterans assisting them with their federal student loan repayment journey.
It should be noted that there are several jobs available to help get your loans forgiven. Having an in-depth understanding of the various student loan forgiveness jobs is crucial to see if your job can get your loans forgiven. The Military Service is qualified for the Public Service Loan Forgiveness as similar to other professionals such as Firefighters and Nurses. There are specialized programs exclusively for some servicemen.
There are options and opportunities for veterans too. Even though your debts are not forgiven, there are many options available to clear your student debts.
Table of contents
- Military student loan forgiveness and discharge programs
- 8 Best military repayment assistance programs
- Eligibility for military repayment programs
- Qualification for military student loan repayment benefits
Military student loans forgiveness and discharge programs
Public Service Loan Forgiveness (PSLF) is only applicable to the currently employed workers in the public service for a period of a total of 10 years. Other than that, there are several other programs offered to military and veterans for student loan forgiveness. They are given below.
1 - Department of Defense (DoD) Loan Repayment
The DoD repays those loans that are under the Federal Student Loan Repayment Program. To provide services to those people who have done their job well, some portion of their loan is forgiven. The DoD program pays up to $10,000 for the loans and this amount can be increased up to $60,000 in total as long as the holder remains in service for 3 years. You must have the eligible federal student loans to qualify for this repayment option and certain other criteria are to be satisfied.
2 - Veterans Disability Discharge
There are certain options available to veterans who can qualify for a student loan forgiveness program without getting any consolidation. This is possible if the veteran has a service-connected disability. This program has been designed to give relief to veterans who cannot continue their duty as a result of a disability sustained during service. If a veteran was injured during a war in his/her service, and cannot continue serving the country, their loans are forgiven under this program.
3 - National Defense Student loan discharge
This was designed to help those who were at the forefront of war, serving their country. To be qualified for this, you must have served for at least a minimum of 1 year in the Imminent Danger Deemed Area and also hold a Perkins or Direct Student Loan.
Reduce the burden
Loan Forgiveness is not always the only way to find the relief that you seek from your student debt repayment. If you are not an active duty member due to any disability then there are plenty of programs designed to help you out.
4 - Servicemembers Civil Relief Act (SCRA) Interest Rate Cap
Under this program, the interest rate is minimum and can be applied to all federal and private loans. The interest rate is 6% so that the loan does not increase immediately, during the active-duty service.
This helps the borrowers to get low-interest rates on loans and avoid the high-interest rate on loans offered by the private lending companies as the interest rate is said to be higher for private loans as compared to federal student loans.
This act was passed by President George Bush back in 2003 long after the Soldiers and Sailors Civil Relief Act (SSCRA) of 1940.
A $20,000 10-year loan at an 8.5% interest will have a monthly payment of $247. When it has been deducted to 6%, the monthly payment will be around $222, which leaves you with an overall saving of $3,112 for 10 years.
How to use the SCRA benefits?
If your student loan debt is charged above at an interest rate of 6% then it was created before the service.
To get the new interest rate, you need to contact your loan servicer in writing, making an official request to get a lower interest rate.
You will be receiving a reduced rate of interest for a period until you continue your service.
Your accrued interests on Direct Loan are eliminated for 60 months if you are in an active-duty service in any hostile area. However, this is only applicable to the Direct Federal Loan.
5 - HEROES Act Waiver
The Higher Education Relief Opportunities for Students Act 2003 is a law that allows the federal or state government to publish waivers (modifications) to statutory or regulatory provisions applicable to the Title IV Federal Student Aid Programs.
The aim is to assist those affected individuals who are applicants of federal student aid and those who are also recipients.
The law gives authority to the US Department of Education to modify (waiver) regulatory provisions for the federal student loans when the borrower is serving in a wartime capacity, a military operation, or during a time of national emergency.
In Deferment, there are 2 options as mentioned below.
a) The first option is for those on active duty service who are already making payments for their student loans. They can defer their payments for a specific time and they are not required to pay when there is war, national emergency, or an active operation
b) The second option is for those students who are still in school and have a student loan. If you stop attending school at least part-time then your loan repayment schedule will start. The deferment option allows you to be on active duty where you do not have to make student loan payments
These options can stop your payments for some period of time without any penalties.
Worried about college fees? Here is a list of the best student loans available for you!
8 Best military repayment assistance programs
Serving the country can have certain benefits which include help with repayment of your federal student loans. Apart from the discharge programs, there are also assistance programs available for military veterans, which are as follows:
1 - Army Student Loan Repayment
This is offered only to military students on active duty for their loan repayment assistance. You are required to enroll for at least 3 years and should hold a score of 50 and above on the Armed Service Vocational Aptitude Battery (ASVAB).
If qualified, the army will pay up to 33.33% of your principal balance every 3 years. With this, you could save about $65,000 on your loan. The saved money can only be used to pay off your federal student loans such as -
Direct Federal Loans
Federal Family Education Loans (FFEL)
2 - Army Reserve College Loan Repayment Program
If you are in a qualified place of Military Occupational Speciality (MOS) then you could get support through the Army Reserve College Loan Repayment Program. To be eligible, you must be enlisted for 6 years and have pending loans before entering active duty.
This will help you to pay around 15% of your loan balance for the amount of $20,000. It is primarily focused on the federal student loan, not on the private student loan.
3 - Health Professions Student Loan Repayment Program
This program helps people from health professions such as doctors, dentists, and other sector-related professionals who are in active duty or the Army Reserve on their student loan repayment. If you are a qualified borrower then you are entitled to receive up to $40,000 each year for three years.
The total amount of $120,000 for military loan forgiveness will go a long way towards paying off medical and dental school loans.
The loans that qualify for the program are
Private student loans
Grad PLUS Loans
If you are in the skill shortage area as determined in the list of U.S. Military then you may stand a chance of getting this award. You also need to serve as a commissioned officer on active duty or in a reserve unit.
4 - Prior Service Soldier Loan Repayment Program
This program is only for the Army Reserve Soldiers who have a previous military service history. They can receive up to $50,000 for their student loan payment.
Furthermore, you can request more information on student loan forgiveness for the veterans through the official website U.S. Army Website.
5 - National Guard Student Loan Repayment Program
This program is for the National Guards. They can receive around $50,000 on loan forgiveness. To qualify, you must be enrolled for no less than 6 years of service in a specific grade.
You should score at least 50 on the Armed Forces Qualifying Test (AFQT) to be eligible.
The loans that qualify for this program are
Grad PLUS Loans
6 - Air Force College Loan Repayment Program
This program is available to anyone who has been enlisted with a past student loan debt. Servicemen are eligible to receive up to $10,000 as yearly payments of 33.33% of their debt.
To qualify for CLRP, members should be employed on active duty. The loans must not be in default and the borrower is responsible for the payment of interests and fees. The payments of the CLRP will directly be made to the lenders.
7 - Air Force Judge Advocate General’s Corps Loan Repayment Program
If you join the Air Force Judge Advocate General's (JAG) Corps, you will be receiving around $65,000 in student loan repayment assistance. The payment will be received over three years once you have finished your first-year service as a JAG officer.
Many Judge Advocates can also benefit from the Public Service Loan Forgiveness Programs (PSLF) and the Income-Driven Repayment Plans (IDR) of the College Cost Reduction and Access Act of 2007.
8 - The Coast Guard College Loan Repayment Program
The Coastal Guard has been receiving a good percentage of enrollment from reputed college graduates. They've been offered around $30,000 in loan forgiveness.
As similar to the Army, Navy, and Air Force Loan Forgiveness, the benefits are provided after serving for one year.
Eligibility for military college loans repayment programs
It is available to those who already have a student loan debt and are willing to join the military service for active duty. It is also for those who have served in active duty and are now willing to reserve.
To be eligible you need to
Be enrolled in a Military for the first time / get in the reserve, once if you have completed an active duty enlistment
Be enrolled in a MOS which is considered for eligibility in CLRP
Get a High School Diploma or a GED
Score 50 and above in the Armed Force Qualification Test
Demand CLRP participation in writing the enlistment contract
Have a student loan that can meet the guidelines of CLRP
Learn more about Student Loan Repayment Options
If you are not qualified for the CLRP, don't lose hope because you can still get in the PSLF which is a better version, compared to the CLRP program. CLRP is available for most sections of the military which includes the Army, Navy, Airforce, National Guard, Coastal Guard, and reserves as well.
Military student loans repayment benefits
The benefits associated with Military student loan repayment are mentioned below.
There are tons of military student loan forgiveness benefits generally available for all sections through the Post 9/11 GI Bill or Montgomery GI Bill.
The Military College Loan Repayment Program (CLRP) is a popular loan forgiveness program. It provides around $65,000 in the form of school loan forgiveness after getting into the military and serving for some years.
Even though the CLRP seems like a great federal student loan forgiveness program for the military, it is not as good as the PSLF. This is because the IRS does not make the forgiven loans under PSLF taxable.
It means that loans forgiven under the PSLF are not taxable (you do not have to pay the forgiven loan as tax).
Repayment with high-interest rates on your student loans can be challenging to accomplish. But with having multiple repayment options and facilities, you can always take advantage to pay off your student loans to have a good lifestyle.