In the U.S., approximately 20.3 million people — about 8% of the population — are military veterans or active duty service members. Military service members and veterans are eligible for some educational benefits, such as the G.I. Bill, but they may also be eligible for student loan forgiveness due to their service. Veteran and military student loan forgiveness programs include Public Service Loan Forgiveness (PSLF), Total and Permanent Disability Discharge (TPD), and more.
Military And Veteran Student Loan Forgiveness & Discharge
As a military service member or veteran, you may qualify for student loan forgiveness or discharge. Forgiveness programs usually forgive your loans because of your service or employment, while discharge is usually based on your inability to repay your loans because of other issues. There are three main loan military and veteran forgiveness and discharge programs:
Public Service Loan Forgiveness (PSLF)
Federal student loan borrowers are eligible for PSLF, a loan program that forgives the remaining balance of your loans after you work for a qualifying non-profit or government agency for ten years and make 120 qualifying monthly payments. For the purposes of PSLF, any of the U.S. armed forces count as qualifying employers, and all positions are eligible, including:
- Army linguists
- Air Force pilots
- Navy Nurse Corps.
Both veterans and active duty service members are eligible for PSLF; the Department of Education allows months spent on active duty toward PSLF, even if your loans were in deferment or forbearance at the time. To qualify, your loans must be federal Direct Loans, including Direct Subsidized or Unsubsidized Loans or Grad PLUS Loans.
National Defense Student Loan Discharge
Service members who were in a location that qualified for hostile-fire or imminent-danger pay may be eligible for the National Defense Student Loan Discharge. Only borrowers with Perkins loans are eligible for this program. Those whose military service finished before August 14, 2008, can have up to 50% of their loans forgiven. Others who served after that time can have 100% of their loans forgiven.
Veterans Total & Permanent Disability Discharge (TPDD)
U.S. military veterans that are totally and permanently disabled can qualify for discharge of 100% of their outstanding federal loans. Military veterans may be eligible for a streamlined Veterans Total and Permanent Disability Discharge (TPDD), making the process much simpler. The VA regularly reports information to Nelnet — the loan servicer that handles TPDD applications — about veterans that may be eligible for loan discharge. If you have a service-related disability that is 100% disabling or are totally disabled based on your individual unemployability rating, Nelnet will send you a letter notifying you that you’re eligible for discharge and what actions you need to take. If you think you qualify but haven’t been contacted, you can fill out an application for TPDD and submit it along with supporting documentation from the VA. For more information and to apply online, visit DisabilityDischarge.com.
Military Student Loan Repayment Assistance by Branch
Besides the above three programs, you may be eligible for loan repayment assistance through the branches of the military. These programs give you money to repay federal and private loans in exchange for a commitment to work for a specific length of time.
Military Student Loan Repayment and the GI Bill
The GI Bill is designed to help military service members pay for college, graduate school, and training programs. However, GI bill benefits cannot be used to repay student loans. If you aren’t eligible, you may need to reenlist to qualify for future GI bill benefits.
Active Duty Army Student Loan Repayment
For those that enlist in the Army and serve for at least three years, the Army Loan Repayment Program (LRP) repays up to $65,000 worth of student loans. To qualify for the program, you must meet the following criteria:
- None of your loans are in default
- The LRP was part of your enlistment contract when you joined.
- You scored a 50 or more on the Armed Services Vocational Aptitude Battery (ASVAB)
- You are part of a critical military occupational specialty (MOS) when you enlisted
Although the Perkins loan program has ended, those with outstanding Perkins loans are eligible for Active Duty Army Student Loan Repayment.
Army Reserve Student Loan Repayment Program
If you join the Army Reserve and serve for at least six years, the Army Reserve Student Loan Repayment Program will pay up to 15% of your student loans, up to a maximum of $20,000. And while other programs are limited to federal loans, this LRP will work with borrowers with private loans on a case-by-case basis.
Navy Student Loan Repayment Program
When you join the Navy, you can qualify for up to $65,000 in loan repayment assistance. To qualify, you must have federal student loans acquired before your enlistment date, and you must serve in the Navy for at least three years. The Navy will repay 33.33% of your remaining loan balance or $1,500, whichever is higher.
Air Force Judge Advocate General’s Corps (JAG) Loan Repayment Program
Previously, the Air Force had a general loan repayment program, but it was eliminated. Now, the only program is the JAG LRP. Under this program, eligible service members can have up to $65,000 in loan repayment assistance.
Coast Guard Loan Repayment Program
Coast Guard service members can qualify for $10,000 per year in student loan assistance. You can participate in the program for up to three years and a maximum of $30,000 of loan assistance.
National Guard Loan Repayment Program
If you join the National Guard and enlist for a six-year term of service, you could qualify for the National Guard LRP. This program will repay 15% of your outstanding principal balance or $1,500 per year, whichever is greater. The maximum amount of assistance you can receive is $20,000.
Health Professions Student Loan Repayment Program
The Health Professions Student LRP provides up to $40,000 per year in repayment assistance to new accessions that enter the Navy and current medical personnel that extend their active duty commitments. To qualify, you must be qualified for or hold an appointment as a commissioned officer in a health profession and sign a written agreement to serve on active duty for a specific period of time
Prior Service Soldier Loan Repayment Program
Soldiers that previously served in the Army Reserves can receive up to $50,000 in student loan repayment assistance by re-enlisting in the Army Reserves. You may also qualify for a reenlistment bonus worth up to $20,000 due to your prior service.
VA Education Debt Reduction Program (EDRP)
Through the EDRP, military veterans that pursue healthcare careers through the Veterans Health Administration (VHA) can qualify for up to $200,000 in loan repayment assistance. Eligible positions includes:
- Physicians
- Psychologists
- Registered nurses
- Social workers
The program awards up to $40,000 annually for a maximum of five years. The funds issued through the program are tax-free, and you can use the money to repay federal or private student loans. For more information or to find eligible positions, visit the VA website.
Alternatives to Military Student Loan Forgiveness
Not everyone will qualify for loan forgiveness, discharge, or loan repayment programs. If you have loans that are ineligible for the above programs, there are other programs and benefits military service members and veterans can use to manage their debt:
Servicemembers Civil Relief Act (SCRA) Interest Rate Cap
Under the Servicemembers Civil Relief Act, military service members on active duty can have their student loan interest rates capped at 6%; this benefit applies to both federal and private student loans. The interest rate deduction will be applied automatically on federal loans, but borrowers with private loans will have to file a request manually. The rate cap also applies to other forms of debt, such as auto or personal loans. And if you served for 12 months or more in a hostile area, you may qualify for a 0% interest rate on your federal loans for up to 60 months. This perk can also be applied retroactively, even if you’re no longer in the military. To find out if you’re eligible, contact your lender.
Income-Driven Repayment (IDR) Plans
If you have federal student loans and are looking for ways to make your monthly payments more affordable, consider applying for an IDR plan. These plans base your payments on a percentage of your discretionary income and a longer repayment term, so you may be able to significantly reduce your payments.
Student Loan Deferment During & Following Active Duty
If you’re serving on active duty in the military, then you may not have to worry about making student loan payments right away. According to the Department of Education, active duty service members can defer their student loan payments until up to 13 months after active duty has ended. The government will also pay interest on select student loans during that time.
The Higher Education Relief Opportunities For Students (HEROES) Waiver
The HEROES Waiver was written to ensure military service members could complete their service without jeopardizing their academic or financial future. The HEROES Act has several implications for service members and veterans in school or repaying student loans but prevents service members from incurring additional student debt while deployed. Contact your lender and your school’s financial aid department to learn more about how the HEROES Act waiver could benefit you.
Student Loan Refinancing
Most loan repayment or forgiveness programs only apply to borrowers with federal student loans. If you’re a military service member or veteran with private student loans, student loan refinancing can be an effective way to manage your debt. By refinancing your loans, you could potentially save thousands of dollars in interest. The benefits of refinancing your student loans include:
- You can qualify for a lower interest rate
- You can lower your monthly payments
- You can adjust your loan term
- You can consolidate your student loans into one
- You can add or remove a co-signer
If you’re thinking of refinancing your loans, review lenders’ student loan refinancing eligibility requirements to make sure you qualify.
Refinance Your Student Loans With ELFI
Now that you know about the available military student loan forgiveness and repayment assistance programs, you can come up with a plan to repay your loans. Loans that aren’t eligible for these programs may be good candidates for student loan refinancing. You could qualify for a lower rate and different term, allowing you to save money and eliminate your debt faster. If you’re ready to get started, you can get a rate quote online or contact ELFI’s Customer Care team to get answers to any questions you may have.* To find out how much you can save by refinancing your debt, use ELFI’s Student Loan Refinancing Calculator.
