A 2012 Pentagon study notes that 41 percent of our armed forces members hold student loan debt, which would mean that as many as 600,000 service members are eligible for a wide range of benefits and programs to lower the cost of higher education and relieve student loan debt.
American Student Assistance has compiled some of the most important opportunities servicemembers should know about to lighten the financial burden of their student loans:
The Post-9/11 GI Bill is an education benefit program for individuals who served on active duty for at least 90 days after September 10, 2001. The program lasts for 15 years following release from active duty and covers up to 36-months of education benefits, for active service members and veterans, and their families.
Benefits from the program include a tuition and fee payment given to your school on your behalf, a monthly housing allowance, and/or a books and supplies stipend of up to $1000 per year. The bill can be used at colleges, universities, trade schools, on-the-job training, apprenticeships, flight schools, and licensing and certification tests. It is important to investigate to what degree the Post-9/11 Bill covers your selected educational program.
Additionally, members of the Armed Forces may transfer unused Yellow Ribbon Program benefits, which allows veterans to attend private school and graduate programs costing more that the state tuition cap, to their spouse or dependent children. The Yellow Ribbon Program is a provision of the Post-9/11 Bill.
Taking on a service responsibility for the U.S. qualifies borrowers for the PSLF program, one of the nation’s most recognized forgiveness programs. For borrowers who are serving and/or working at a qualifying nonprofit or government employer, including military service, the PSLF eliminates any remaining federal Direct Loan (DL) balance after 10 years and 120 eligible payments. Payments must be made on time, full, and separate, on or after October 1, 2007.
It is important to note that any payments made during breaks in eligible service or employment or part-time employment will not be counted, leading to a longer than 10-year waiting period. Once you complete all 120 qualifying payments, you can apply for forgiveness with your DL loan servicer. Be sure to work with your employers to keep record of your employment over the 10 years. You can learn more about PSLF through our information campaign, “10 Years to Zero Debt.”
For active duty servicemembers, managing financial obligations while performing one’s military responsibilities can become overwhelming. The SCRA was created to postpone or suspend civil obligations, specifically concerning financial management, while deployed. The Act helps members better manage student loans by capping the interest accrued on any debt borrowed before their military service to 6%, leading to potentially thousands of dollars saved every year. For individuals with high-interest private loans, the SCRA is particularly beneficial. You can apply for this retroactively, up to 180 days after your active duty service has ended.
For all active duty service members, the Department of Defense (DOD) offers a loan repayment program to help pay off a portion or all of your student loans. The Army, Navy and Air Force all offer varying enlistment incentives and recruiters from each can speak to what they specifically offer. Borrowers are required to meet certain service requirements and must turn down future Montgomery GI Bill benefits, but these programs offer the possibility of receiving up to $65,000 in military student loan forgiveness.
Curious about the specifics of the different branch LRP programs? Here is a breakdown:
- Army LRP provides an enlistment incentive of forgiveness of up to 33 1/3% of your student loan balance for a total of three years with a $65,000 maximum. In order to qualify, you must earn a score of 50 or higher on the ASVAB qualification test and enlist in a “critical military occupation specialty.”
- Navy’s LRP provides an enlistment incentive of forgiveness of up to 33 1/3% of your student loan balance for a total of three years with a $65,000 maximum.
- The Air Force’s College Loan Repayment Program (CLRP) is available to any newly enlisted service members who sign up for the program when enlisting. You may receive up to 33 1/3% of your student loan balance for a total of three years with a maximum of 10,000 and a minimum of $1,500.
It is important to note that veterans with less than 14 years of service can also receive up to $50,000 towards student loan payments, if they agree to enlist in the National Guard, in a MTOE or Medical TDA position, for at least six years.
Each US state offers tuition and loan benefit programs for military members that attend college as residents of the state.
ASA is committed to helping our dedicated service members, veterans, and their families navigate student loan repayment and the benefits offered for their service. For more information on additional resources concerning military student loan debt, please visit our website or download our eBook, “The Military Smartbook For Defeating Student Debt.”