Student Loan Repayment Programs for the Military
According to Kalagian, student loan programs tend to fly under the radar.
“Student loan forgiveness and repayment programs are relatively unknown to service members and veterans,” said Kalagian.
And that’s a big problem: 41 percent of armed forces members have student loan debt. But active duty service members and veterans are eligible for programs that make student loans more manageable.
Military student loan forgiveness, repayment relief, and refinancing are possible options. By understanding these programs and the requirements, you can reduce your debt burden.
Public Service Loan Forgiveness (PSLF)
Under PSLF, the government forgives federal student loans after the borrower makes 10 years of consistent, qualifying payments and serves in a government, nonprofit or other public service position. While this program wipes out your debt, and the forgiven balance is not taxed, deferred payments do not count towards the payment requirement.
Military College Loan Repayment Program
Each branch of the military offers different incentives. Depending on where you enroll, you may be eligible for up to $65,000 in military student loan forgiveness. Borrowers must meet certain service requirements and forego Montgomery GI Bill benefits, but it’s a valuable benefit to bring down your student loan balance.
National Defense Student Loan Discharge
If you served in an area the government considered in imminent danger or were involved in direct fire, you may qualify for the National Defense Student Loan Discharge. Only Perkins or Direct student loans are eligible for this program, and you need to submit a form and a letter explaining why you believe you qualify to your lenders.
Active Duty Health Professions Loan Repayment
You can receive up to $40,000 in loan repayment assistance on qualifying loans. The government provides assistance for three years during active duty service. They determine the amount of aid based on the number of years you served after the lenders disbursed the loans.
Veterans Total and Permanent Disability Discharge
For those who have service-related disabilities, the Veterans Total and Permanent Disability Discharge can completely eliminate your loans. If the Department of Veteran Affairs deemed you permanently disabled, most federal and private loans are eligible for discharge.
Student Loan Refinancing
Another option to cut the lifetime cost of your loans is student loan refinancing (which is available to service members and civilians alike). Essentially, you take out a loan with a private lender and use it to pay off your other loans at a more competitive interest rate. Refinancing can help you get a lower monthly payment and save thousands of dollars in interest charges.
Keep in mind that refinancing is not for everyone. Refinancing federal loans with a private lender means forfeiting federal benefits such as income-driven repayment plans, deferment, forbearance, and PSLF programs. But if you have loans with high interest rates, refinancing can save you big time.
For a comprehensive list of student loan relief options, check out this guide to military student loan forgiveness and repayment programs.
Finding military programs and discounts
One of the difficulties facing veterans and service members is finding out about special programs and discounts.
“Unfortunately, there is not one easy place where service members can find all of the programs available to them,” says Kalagian. “Veterans service officers are a good place to start to get this kind of information, and every county has them.”
These are just a few great examples of the many benefits available. Whether you are eating out or signing a lease for a new apartment, ask about discounts for service members and veterans. Many places offer promotional offers but do not actively advertise them, so you won’t know until you ask.
Subscribe to Millspouse: This Week
