ARMED FORCES PERSONNEL
Whether you’re a veteran of the U.S. Military, or currently on active duty, you may have several options available to reduce your monthly payments or eliminate student debt entirely.
A report issued by the Pentagon in 2012 estimated that 41 percent of U.S. Armed Forces members have student loan debt. As a result, there has been a renewed focus on providing veterans and active Military members with ways to repay their student loans, and offer student loan forgiveness to those who qualify.
Military Student Loan Forgiveness and Repayment Options
As a current or former member of the U.S. Military, you may have access to a number of student loan repayment and forgiveness programs designed to help you with your finances and reduce the time it takes to get out of debt.
Servicemembers Civil Relief Act (SCRA)
If you obtained student loans before entering the Military, the Servicemembers Civil Relief Act (SCRA) may help you reduce the interest on your loans to 6 percent while on active duty. While the SCRA Interest Rate Cap is available to both federal and private loan holders, only federal loans originating on or after August 14, 2008, are eligible. Additionally, if you consolidated your federal loans after beginning active duty, there is the possibility that your consolidation loan may not be eligible.
To qualify for the SCRA Interest Rate Cap, verification through an authorized Military database can determine your eligibility. Another option includes submitting a copy of your orders that verifies the start date of your active duty.
Student Loan Deferment
Both U.S. Military veterans and active personnel have deferment options available for student loans. During active duty, loan payments on eligible federal and private loans can be postponed while you are serving.
For active members, this type of deferment is usually only offered to those who serve during a war, military operation, national emergency or if you’re assigned to a duty station outside of your normal station. In most cases, any time spent in training or attending service school will not be considered eligible for deferment.
Veterans seeking deferment on eligible federal and private loans will need to meet these same requirements before approval. However, both active Military and veterans will need to meet other requirements as well, including a written statement from a commanding/personnel officer, a copy of your Military orders, and/or a verbal request for the initial 12-month deferment period if documentation is unavailable.
Public Service Loan Forgiveness
As a former or current member of the U.S. Military, you may have access the Public Service Loan Forgiveness (PSLF) Program, which offers forgiveness on Federal Direct Loans after meeting the program’s requirements.
The requirements of the PSLF Program include providing documentation on your Military service, as well as making 120 on-time, qualifying payments after October 1, 2007 as part of an eligible income-driven or Standard Repayment plan.
Anyone serving in a hostile area with special pay could be qualified to have zero interest applied to student loans for up to 60 months during this period of service.
To qualify for this program, you will need to either have a Federal Direct Loan, or have a portion of a Direct Consolidation Loan, which originated on or after October 1, 2008. You will also need to prove your deployment to the hostile area by providing one of the following: a certifying official’s statement and signature, Military orders that demonstrate your service in a hostile area, or a Leave and Earnings Statement that shows you are receiving pay associated with hostile or imminent danger environments.
Income-driven Repayment Plans
There are numerous repayment plans available to student loan borrowers that may offer a substantial reduction in your monthly student loan payments, depending on your income and other plan-specific requirements. For information regarding these repayment plans, please visit our Student Loan Repayment section or speak to a student loan specialist by phone at 800-555-5555.
HEROES Act Waiver
During active duty, the U.S. Department of Education may waive many of the documentation requirements necessary for receiving federal student loan benefits, which include updating information on your family size and income. This enables you to have your monthly federal student loan payments maintained while you’re actively serving in war, military operations or a national emergency.
To be eligible for the HEROES Act Waiver, you will need to provide military orders or have your loan servicer apply the waiver proactively if they have the information available and you qualify.
Department of Defense (DOD) Repayment
The Department of Defense (DOD) offers partial or full repayment of your student loans under certain circumstances, and varies based on the Military branch you serve in. Information on the DOD Repayment Program is available through your designated Military Personnel Officer or representative.
Veterans Total and Permanent Disability Discharge
If you were totally and permanently disabled during Military service, you may have access to the Veterans Total and Permanent Disability Discharge, which offers a full discharge of federal loans and selected private loans.
Qualifying for the Veterans Total and Permanent Disability Discharge requires documentation from the U.S. Department of Veterans Affairs confirming your service-connected disability, in addition to other requirements. Learn more about the Total and Permanent Disability Discharge.
Find out if you can take advantage of Military repayment and forgiveness programs for free.