Student loans can work a little differently for former and current members of the armed forces. When it comes to paying back your loans, you often have more forgiveness, deferment and even refinancing options than civilians.
How does student loan repayment work for service members?
Paying off your student loans while you’re a member of the armed forces works a lot like it does for anyone else. Each month, you make a payment that goes toward your student loan balance and interest.
The main difference is that you have more forgiveness and assistance options than your typical civilian. Lenders are typically more flexible when you’re deployed to an active military zone — most let you defer your loan and go into forbearance and if not, you can refinance with a lender that does. Your lender also can’t charge you more than 6% interest during that time.
Military student loan forgiveness programs
These student loan forgiveness programs are designed to help current and former members of the armed forces reduce their student debt load. However, you typically need to spend at least a few years paying off your student loans to qualify.
If you have federal loans and have worked in the armed forces while making over 120 repayments — consecutive or not — you could qualify to have the government forgive what’s left of your student loan balance.
Who it’s for: Current and former service members who made at least 120 full repayments on federal loans while in the armed forces.
How much you can get forgiven: Your remaining loan balance.
Eligible loans: Federal Direct loans.
Where to apply: FedLoan Servicing.
Other eligibility requirements: Must be on an eligible repayment plan based on your income — payments made during deferment don’t count. You must also work at least 30 hours a week for the armed forces or another legitimate organization for your employment to count.
In some situations, the Department of Defense might forgive part or all of your student loans. Typically, this option is available to service members who have risked their lives for their country for at least a year.
The application process and how much you can be forgiven varies by your specific circumstances. If you think you might be eligible, reach out to your military personnel officer or representative for more details.
Veterans who were seriously disabled during their time in the armed forces might also be eligible to have their student loans completely discharged. You’ll need to get a document from the Department of Veterans Affairs showing that you became disabled during an incident related to your service.
Who it’s for: Permanently disabled veterans.
How much you can get forgiven: Your remaining loan balance.
Eligible loans: All federal and some private student loans.
Where to apply: Through your loan servicer.
Service members who joined the armed forces after they took on student debt could be eligible to have part of that debt forgiven under the CLRP. Depending on our branch of the military, you could get up to $65,000 of your student debt forgiven by making significantly reduced repayments while enrolled in the program. You have to be enlisted to qualify — officers aren’t eligible.
Who it’s for: Enlisted service members who signed up after they took on student debt.
How much you can get forgiven: Up to $65,000.
Eligible loans: Federal loans.
Where to apply: When you enlist — you need to include CLRP in your enlistment contract to be eligible.
Other eligibility requirements: Varies by branch. Members of the Army must enlist for at least three years, and those in the Air Force and Navy must enlist for four years. Members of the Army must score a 50 or higher on the Armed Forces Vocational Aptitude Battery (AFVAB).
Military physicians, nurses and other health professionals on active duty and in the Army Reserve might also be eligible for up to $120,000 in student loan forgiveness on debt from medical school. Veterinarians are also eligible.
Who it’s for: Active-duty and Army Reserve physicians, dentists, nurses, veterinarians and other health professionals.
How much you can get forgiven: Up to $120,000 over three years for those on active duty, and up to $50,000 over three years for those in the Reserve.
Eligible loans: Most loans used to pay for your medical degree.
Where to apply: Talk to your recruiter or military personnel officer for details.
Other eligibility requirements: Only applies to medical school debt, and some specializations might be ineligible.
Thinking of signing up for the Army Reserve? The Army gives people who enlist or re-enlist for the Reserve up to $50,000 in student loan forgiveness as part of its list of incentives to bring in new recruits. You can request more details about how it works through the Army’s website.
Members of the legal arm of the Air Force can qualify for up to $65,000 in student loan repayment assistance over three years of service — on top of other student loan repayment programs.
Who it’s for: Members of the Air Force Judge Advocate General’s Corps.
Where to apply: Ask your military personnel officer or representative for more details.
Other eligibility requirements: You must serve for one full year before you’re eligible.
Student loan deferment options for service members
Student loan deferment is when you put your loan repayments on hold. Interest still adds up while your loans are deferred, but you won’t be on the hook for repayment.
Almost all student loan providers offer deferment if you’re on active duty — especially if you’re putting your life at risk. Deferment depends on whether you have federal or private student loans. Other types of deferment that aren’t specifically for service members but you may consider are in-school deferment and hardship deferment. How student loan deferment and forbearance work
Military Service Deferment. If you’re called to active duty during wartime, a military operation or national emergency, you can apply to have your loans deferred until six months after your service is over.
Post-Active Duty Deferment. Service members that need additional time getting their finances together after an eligible military service can apply to have their deferment extended to 13 months after their active-duty service is over or when they re-enroll in school.
Deferment options for private student loans
Your options with private lenders tend to vary. Most have a version of military service deferment, though what type of active duty is eligible depends on your lender. Some only allow you to defer your loan if you’re going to fight in a war, while others might also include military operations or national emergencies.
How long you’re able to defer your loan also depends on the lender. Some have caps on how much total deferment you can qualify for, while others allow you to defer your loans as long as your active duty lasts. Reach out to your loan servicer to find out about your specific military deferment options.
Federal protections for loans while you’re on active duty
The Servicemembers Civil Relief Act (SCRA) provides protections to members of the armed forces while on active duty. Most notably, it forbids lenders from charging more than 6% interest on most types of credit — including student loans. The 6% cap also includes most fees.
This only applies to loans taken out before your active-duty military service. Some federal loans like Direct loans and FFEL loans taken out before August 14, 2008 are ineligible. To qualify for the 6% interest rate cap, you must submit a request in writing to your lender within 180 days of finishing your active-duty military service.
Student loan refinancing for members of the military
Qualifying for forgiveness and repayment assistance can take a few years. If you have private student loans and recently got a pay raise or improved your credit score, consider refinancing your student loans for a more competitive rate. In other words, taking out a new loan to pay off your current student debt.
Think twice about refinancing federal loans, however: You’ll lose access to several repayment and forgiveness programs like PSLF and CLRP if you refinance your loan with a private lender. Plus, federal loans tend to come with some of the most competitive rates out there — so you may not save.
Should I refinance my student loan as a service member?
Consider refinancing if …
You have private student loans.
You aren’t eligible for PSFL or CLRP.
Your income or credit score has increased recently.
You want to take a cosigner off your loan.
Consider holding off if …
You only have federal loans.
You’re eligible for federal forgiveness programs.
You might be called for active duty.
Your credit score or income hasn’t increased recently.
Service members have lots of options when it comes to student loan repayment assistance. Many programs come directly through the military, so start by talking to your military personnel officer or representative. Or, check out our guide to student loans to learn more about your options.
No, but it does have deferment and forbearance options for members of the military. If you have a Sallie Mae student loan, reach out to customer service for more details on what you’re eligible for.
Generally no, though it depends on your program. Most government programs require that you have a relatively consistent history of on-time repayments to be eligible for forgiveness or assistance.
On top of that, defaulting on a student loan could affect what you’re able to do as a member of the military. Each branch has its own policy when it comes to service member debt. Check with your military personnel officer for details on how a defaulted student loan could affect you.
The military can pay off part or all of your student loans if you qualify for a program through the Army, Navy or Air force. The Department of Defense and Department of Education also have loan forgiveness programs that service members might be eligible for.
Not if you aren’t currently enrolled in school. The GI Bill doesn’t cover existing college debt, so you’ll still need to make your student loan repayments yourself. You can learn more about what the GI Bill covers with our guide to financial aid for veterans.
No. Although USAA used to offer a rate discount on Wells Fargo student loans for USAA members, that referral program is no longer available.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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