The student loan crisis continues to grow across the United States. There are more than 45 million borrowers across the United States who owe more than $1.7 trillion in education debt. This debt burden affects all the courageous women and men who serve our country, including those in the military.
The good news is that there are several programs available across our country to provide student loan relief to active duty service members, reservists, National Guard members, and veterans. In this guide, we’ll discuss the forgiveness options available to military personnel.
Overview of Military Student Loan Forgiveness Programs
Government and private lenders understand the sacrifices made by members of the armed forces in the service of our country. As a result, a number of initiatives have been taken by federal and private institutions to reduce the student loan burden.
Some primary selections include:
- Public Service Loan Forgiveness (PSLF) – Federal loans are forgiven after ten years of payments while employed full-time in the military or public service.
- Military College Loan Repayment Program (CLRP) – Loans up to $65,000 to qualify for enlistment in the Army, Navy, Air Force, Marines, or Coast Guard.
- Veterans Disability Discharge – Repays all federal student loans for disabled veterans who are unable to work due to service-connected conditions.
- National Defense Student Loan Discharge –Forgives Perkins loans for military members serving in hostile fire/imminent danger pay areas.
- HEROES Act – Allows debt relief benefits such as lower interest rates for federal loans while on active duty.
Let’s examine how these and other initiatives can assist in easing student debt burdens for men and women serving our country.
Detailed Options for Military Student Loan Forgiveness
There are several programs available to military members focused on reducing or eliminating education debt. Here are some of the main options for reducing or repaying student loans for active-duty personnel and veterans –
Public Service Loan Forgiveness (PSLF)
One of the best programs for members of the armed forces is Public Service Loan Forgiveness. This federal program was enacted to assist borrowers with federal student loans who work in public service sectors, including the military service branches.
The basics of PSLF are that you can qualify for full forgiveness on Federal Direct Loans after making 120 qualifying monthly payments while employed full-time by a military branch or other eligible public service employer. Key points on PSLF for service members:
- All federal Direct Loans are eligible, including Direct subsidized and unsubsidized loans and Direct PLUS loans.
- Both full-time active duty and National Guard/Reserve service on federal orders can qualify for the PSLF.
- Months spent on active duty count toward PSLF, even if loans are deferred or withheld during that time.
- Months spent by students on tuition may also be eligible for the $120 monthly payment.
We recommend that military members enroll in an income-driven repayment plan to reduce monthly payments and accelerate loan forgiveness under PSLF potentially.
Military College Loan Repayment Program (CLRP)
The Military College Loan Repayment Program offers student loan repayment as an incentive to enlist in the U.S. Armed Forces. Each military branch has its own CLRP terms:
- Army CLRP – Total loan repayment of up to $65,000 if recruited for six years in some businesses.
- Navy CLRP – Total loan repayment up to $65,000 for a 3-year service contract.
- Air Force CLRP – Up to $10,000 in loan repayment for the 4-year Judge Advocate General role.
- Marine Corps CLRP – Up to $30,000 in loan repayments, depending on the length of the recruitment contract.
- Coast Guard CLRP -Total loan repayment up to $60,000 for enlisted members.
Eligibility requires receipt of a federal or private student loan prior to enrollment. Talk to a recruiter about specific eligibility conditions for CLRP incentives.
Veterans Disability Discharge
The Total and Permanent Disability Discharge Program enables veterans with total and permanent disability due to service-connected conditions to repay federal student loans.
To qualify, veterans must submit documentation from the VA confirming that they are unemployed due to a disability connected to their military service. The VA can assist in submitting a disability discharge application.
This discount applies to Federal Direct, Perkins, and FFEL loans. A spouse or parent of a disabled veteran with a PLUS loan for education may also be eligible for discharge.
Also Read – Student Loan Forgiveness Programs for Lawyers in Public Service
National Defense Student Loan Discharge
The National Defense Student Loan Discharge Program provides forgiveness of federal Perkins loans for military members serving in areas eligible for imminent danger pay or hostile fire pay.
For those terminating the service before August 14, 2008, up to 50% of the loan balance can be repaid. For current serving members, up to 100% of the outstanding loan amount can be waived off.
To apply, members submit a redemption application to the loan holder along with documents confirming dates of service in the eligible area. This must be certified by the commanding officer.
Heroes Act Benefits
The Higher Education Relief Opportunities for Students (HEROES) Act assists with federal student loans to active duty service members, including:
- Limiting interest rates on federal loans to 6% while on active duty.
- Allowing federal loan payment deferral while on active duty
- Extending loan grace period for those entering active service
- Restoring federal loans repaid after leaving active duty
- Easing of restrictions on Title IV aid for those affected by military service
The Department of Education and loan servicers automatically apply many HEROES Act benefits to federal loans.
State and Lender Military Repayment Programs
In addition to federal options, some state and private lenders offer military student loan repayment assistance:
- California National Guard Education Assistance Award – Up to $10,000 in cash bonus and loan repayment per 6-year contract.
- Wells Fargo Military Banking – Interest rate reductions and special assistance for military customers.
- PenFed Hero Loan – Low-rate consolidation loans and deferment for military borrowers.
Check with state education departments, Guard units, and lenders about possible military repayment programs.
Additional Strategies for Military Members to Tackle Student Loans
In addition to the forgiveness and repayment programs already mentioned, here are additional tips for taking control of education debt during and after military service:
- Enroll in income-driven repayment plans – link payments to income and get forgiveness after 20-25 years
- Student Loan Refinancing – Consolidate Loans and Get a Lower Interest Rate to Save Money
- Utilize GI Bill education benefits – Receive financial assistance for further education and training
- Consolidate into a Direct Loan – Eligibility for PSLF requires a Federal Direct Loan
- Defer Student Loans During Active Duty – Defer payments through deferment until military service ends
Don’t let student loans discourage you from pursuing a military career or continuing your education after service. Use these forgiveness programs and smart repayment strategies to overcome student loan debt.
Frequently Asked Questions About Military Student Loan Forgiveness
Does the GI Bill provide loan repayment assistance?
The GI Bill provides financial assistance for further education but does not directly repay existing student loans. Benefits can be used to avoid taking out new loans for school after military service.
When will payments for PSLF begin?
As soon as you have a Federal Direct Loan and you work full-time for a public service employer like the Army, you start making qualifying payments. Payments made before formally applying still count.
Can I get loan forgiveness from a Perkins loan?
Yes, Perkins loans are eligible for forgiveness under the National Defense Discharge Program, and Veterans can also receive a disability discharge for cases of total permanent disability.
Where can I get help applying for forgiveness programs?
Contact the VA, student loan service providers, recruiters, financial aid offices, and financial counselors for guidance on military student loan forgiveness programs.
Are military spouses/dependents eligible for loan forgiveness programs?
If dependents have borrowed loans to fund a disabled veteran’s education, they may qualify for the veteran’s disability discharge and certain other programs. Consult with the VA regarding spouse eligibility.
Achieve Financial Freedom through Military Service
Members of the armed forces make great personal sacrifices to defend our country. In return, you are entitled to support and benefits to fulfill your educational aspirations debt-free.
Take advantage of these military student loan forgiveness and discharge programs to ease the burden of education debt. Your respectful service paves the way for a bright financial future.
Conclusion –
Serving in the military is a noble task that requires great personal sacrifice. Unfortunately, student loan debt should not be an additional burden on top of the challenges of military service. This guide outlines several options available to active duty armed forces members, veterans, National Guard, and Reserves to seek education loan relief.
From forgiveness programs like PSLF and Veterans Disability Discharge to targeted repayment assistance through CLRP and the HEROES Act, resources exist to help military personnel find relief from student loan debt. By taking advantage of these benefits, military members can focus on serving our country without any financial constraints. Our men and women in uniform deserve to continue their education and live an economically secure life after their selfless service to protect our nation.