People who currently serve or have served our country in uniform deserve significant relief from their student loans. That’s why many options exist for each military branch to help service members qualify for help with their debt.
The Servicemembers Civil Relief Act, for instance, caps interest rates at 6% on debt oby active-duty service members that they incurred prior to active duty.
In addition to that, there are some military student loan repayment programs that can help you eliminate your debt much faster than you could do on your own.
Military loan repayment programs
Depending on which branch of the military you’re serving, you may have access to one or more military student loan repayment programs that can help you pay down your debt.
These don’t technically fall under military student loan forgiveness, because your loan servicer isn’t canceling your debt. But the positive financial impact, which can include savings of tens of thousands of dollars, is the same.
One thing to keep in mind as you review these programs is that they’re generally available only for federal student loans.
Army College Loan Repayment Program: Active Duty
Active-duty members of the Army can take advantage of the branch’s College Loan Repayment Program if they agree to a term of service of three years or more. If you qualify, the Army will repay 33.3% of the outstanding principal balance (minus taxes) of your federal student loans each year.
At a minimum, you’ll get $1,500 per year, and the maximum benefit is $65,000 over three years. To be eligible, you must:
- Decline enrollment in the Montgomery GI Bill
- Have the repayment program guaranteed in writing in your enlistment contract
- Be a non-prior service accession
- Have a high school diploma and a score of 50 or higher on the Armed Services Vocational Aptitude Battery
- Enlist in one of the critical Military Occupational Specialties that qualify for the program (local recruiters have up-to-date lists)
Army College Loan Repayment Program: National Guard
If you’re in the National Guard — that includes federal active duty, state active duty and drilling — you can get up to $20,000 of your federal student loans paid off, minus taxes. That’s 15% of your principal loan balance annually (with a $1,500 minimum) for six years, which is the minimum service obligation to qualify.
Other eligibility requirements include:
- You must have the repayment program guaranteed in your enlistment contract
- You must decline the Montgomery GI Bill
- You must have a high school diploma and a score of 50 or higher on the Armed Services Vocational Aptitude Battery
- You’ll need to enlist in one of the critical MOSs that qualifies for the program in the pay grade of E-4 or below
- You must not be enlisting as a 09R SMP Cadet or in the RFP/Active First Program
- The loans must have been acquired prior to your active-duty service
There are other requirements for prior-service soldiers who enlist in the National Guard.
Army College Loan Repayment Program: Army Reserve
The military branch also has a program for active-duty members and drilling members of the Army Reserve. The program has the same benefits and most of the same requirements as the National Guard program.
Healthcare Professions Loan Repayment Program
If you’re a health professional in the Army, you may qualify for up to $120,000 in loan repayment assistance, depending on whether you’re an active-duty service member or in the Reserves, and which corps you belong to (i.e. Dental Corps, Medical Corps, Allied Health Corps, etc.).
Regardless of how much you qualify for, the benefit will be paid out over three years. Learn more about the Healthcare Professions Loan Repayment Program and other perks the Army provides on its website.
Navy Student Loan Repayment Program
The Navy’s military student loan repayment assistance program offers up to $65,000 in benefits, less taxes, over a period of three years. You’ll get a third of your student loan balance paid each year on the anniversary of your active-duty service date, with a $1,500 annual minimum.
The program is available to eligible personnel in the delayed entry program who will enlist as active-duty service members. Eligible ratings are announced via message and can be found here.
Air Force Judge Advocate General’s Corps Student Loan Repayment Program
As a member of the JAG Corps, you can get up to $65,000 of your student loan balance paid off over three years, starting after your first year of service.
Coast Guard Student Loan Repayment Program
As an active-duty member of the Coast Guard, you can get up to $10,000 each year in benefits for up to six years total. The program has many eligibility requirements, a few of which include:
- You must be at least 21 years old but not yet 28 years old
- You must be a U.S. citizen and eligible for Secret Clearance
- You may not have more than two dependents (or if you’re single, no dependents in your primary custody at all)
- You must be a senior undergraduate, in your last year in graduate school or have graduated within two the last two years
- You must pass a commissioning physical
Military student loan forgiveness programs
There are a few student loan forgiveness programs you may qualify for as a member of the Armed Forces:
- National Defense Student Loan Discharge: If you served in an imminent danger or hostile fire area for at least a year, you may qualify to have a portion of your student loan debt discharged.
- Veterans Total and Permanent Disability Discharge: If you’ve been deemed permanently disabled due to a service-connected disability, you may qualify to have all of your student loans discharged.
- Public Service Loan Forgiveness: The Department of Education’s primary forgiveness program is available to military members who work for a government agency or eligible non-profit organization while making 120 qualifying monthly payments and meeting other requirements. If you meet all the requirements for PSLF, your full balance will be forgiven.
Other options for military student loan debt relief
Military loan repayment programs and forgiveness programs are available, but not everyone qualifies for them. Even if you do, you may be looking for some immediate relief from your student loan payments. If so, here are some options to consider.
The Department of Education allows you to defer federal student loans if you’ve entered active duty. You won’t have any payments during your service period, as well as 13 months after your return. Just keep in mind that unless you have subsidized federal loans, interest will still accrue during the deferment period.
Income-driven repayment plans
Whether or not you’re taking advantage of a military student loan repayment program, you can get some immediate relief on your payments with an income-driven repayment plan. These plans reduce your monthly payment to between 10% and 20% of your discretionary income.
In fact, if you expect to get your full student loan balance paid off through a loan repayment program, it may make sense to get on one of these plans to limit your total out-of-pocket costs.
Student loan refinancing
If you don’t qualify for a loan repayment assistance program, you may be able to take advantage of student loan refinancing. Refinancing involves replacing your existing loans with a new one from a private lender.
Depending on your credit situation, you may be able to qualify for a lower interest rate than what you’re currently paying. That can also lower your monthly payment and save you significant money in interest.
The bottom line
If you’re a member of the military or thinking about joining, student loan repayment programs are part of the benefits package with some branches. Take some time to research your options to see what you qualify for. Also, look for other ways to get relief from your student debt including deferment, income-driven repayment plans, and refinancing.
And if you’re considering refinancing, take your time to compare rates from multiple lenders before you submit an application.
As you take the time to figure out how to tackle your student loan debt, with or without help, you’ll have a better chance of eliminating your debt faster and with more money in your pocket.