Military Student Loan Forgiveness
Millions of Americans are burdened with student loan debt, including active members of the military and veterans. Fortunately, there are ways to reduce or eliminate your student loan debt if you join the military. In this guide, we’ll discuss military student loan forgiveness options, repayment assistance programs, and a few other ways that military members can manage their loan debt.
Military Student Loan Forgiveness and Discharge Programs
When your loan is forgiven, cancelled, or discharged, this means that you are no longer required to repay some or all of your loan. There are several student loan forgiveness and discharge programs set up for military members. Below we’ve listed a few options that can help you get your loans partially or completely forgiven.
One of the most popular loan forgiveness programs is the Public Service Loan Forgiveness. The program offers loan forgiveness to full-time government employees, which includes members of the U.S. military. The program forgives all student loan debt after the borrower makes 120 qualifying payments under an income-driven repayment plan.
The National Defense Student Loan Discharge program is available to individuals who have put their lives on the line to defend their country. To qualify, you must have served in an area deemed imminent danger or in direct fire for at least one year. Those whose service began before August 14, 2008 can qualify for up to 50% of their loan being cancelled. Those whose service began on or after that date may have up to 100% of their loan being forgiven. Note that this program only applies to Federal Perkins Loans.
Disabled veterans can qualify for student loan forgiveness through the Veterans Total and Permanent Disability Discharge. To be eligible, you must have a permanent service-related disability documented by the Department of Veterans Affairs. Most loans are eligible for forgiveness, including Federal Perkins Loans, Direct Loans, and FFEL Loans.
Military Student Loan Repayment Assistance
While student loan forgiveness programs cancel college debt, repayment assistance programs give you money to help repay your student loans. There’s a variety of repayment programs for members of the Army, National Guard, Navy, and Air Force. Let’s take a look at each program.
Army: Active Duty
The Active Duty repayment program offers repayment assistance to soldiers on active duty in the Army. To qualify, you must (1) enlist for a minimum of three years and (2) score a 50 or higher on the Armed Forces Qualification Test. Assistance is for federal loans only, since private ones aren’t eligible. If eligible, the Army will pay up to 33.33% of your principal balance each year for three years. Through this program, you can receive up to $65,000 in loan assistance.
The Army Reserve repayment program offers repayment assistance to soldiers currently enlisted in the Army Reserve. Only specified Military Occupational Specialties (MOSs) qualify for this program. To qualify, you must (1) enlist for a minimum of six years, (2) score a 50 or higher on the Armed Forces Qualification Test, and (3) have loans before going on duty. If eligible, the Army will pay 15% of your loan loan balance for up to $20,000. This program primarily applies to federal student loans, instead of private ones.
The Health Professions Loan Repayment Program provides loan assistance to doctors, dentists, and other healthcare professionals on active duty in the Army or in the Army Reserve. Qualifying active duty members can receive up to $40,000 annually (over three years) for a maximum of $120,000. Qualifying reserve members can receive up to $50,000 in repayment assistance. Check here for more details.
If you’re in the National Guard, you could receive loan assistance through the National Guard repayment program. To qualify, you must (1) enlist for a minimum of six years and (2) score a 50 or higher on the Armed Forces Qualification Test. If you’re eligible, you could receive up to $50,000 in assistance.
Air Force JAG Corps
Members of the Air Force Judge Advocate General’s (JAG) Corps are eligible for student loan repayment assistance. Qualifying members can receive up to $65,000 in assistance over the course of three years.
Active duty members of the Navy can receive repayment assistance during their first three years of service. Through this program, you may receive up to $65,000 in assistance. This program primarily applies to federal student loans.
Other Options for Managing your Student Loan Debt
Along with student loan forgiveness and repayment assistance, there are a few other options that can make your loan debt more manageable.
Servicemembers Civil Relief Act (SCRA)
Active duty military members can benefit from the Servicemembers Civil Relief Act (SCRA), which caps the amount of interest that can be collected on loans at 6%. Reduced interest rates translate to lower monthly payments, which means you could pay off your student loan debt faster. SCRA benefits are automatically applied to active duty service members. Just keep in mind that this benefit only applies to loans obtained after August 14, 2008 and before starting your term of active duty service. Both federal and private student loans are eligible.
Defer Your Student Loans While You’re on Active Duty
The Department of Education allows members of the military to defer their student loan payments during active duty and 13 months afterwards as well. During this time, your principal payment halts while the government pays the interest on your Direct Subsidized and Subsidized Federal Stafford Loans. Although you won’t pay off your loans faster, you won’t have to worry about interest accruing during the pause.
Income-Driven Repayment Plan
Both civilians and active duty members can lower their monthly student loan payments by applying for an income-driven repayment plan. These plans are designed to make your monthly payments more affordable based on your income and family size. If your income is low enough, your payment could be as low as $0 per month.
Best of luck finding the military student loan forgiveness plan that is right for you!