Student Loan Forgiveness Programs for Veterans
Making the decision to serve in the military is a committed, life-altering step in your career path. It’s definitely not known for being easy and can be dangerous depending what your job is, but many people feel that the benefits of serving outweigh the risk.
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While some people truly have a desire to serve their country, others join the military as a way to fund their college education. You’ve probably heard that if you serve in the military before going to college, you will get rewarded with a G.I. Bill to fund your schooling, but what if you decided to serve after having already acquired student loan debt?
Here we will discuss the different options for student loan forgiveness that are available to veterans.
The Military College Loan Repayment Program (CLRP)
This student loan forgiveness program, similar to many others set in place by Congress, is an incentive for new talents to enlist in the U.S. military. Through the College Loan Repayment Program, the military will pay back a fraction of your student loan debt. The CLRP is exclusively for enlisted members, meaning that officers and members serving in certain military occupational specialties (MOS) are not eligible.
While Congress has capped the maximum amount of loan forgiveness to $65,000 for this program, the different branches have come up with their own caps within this allowance.
Currently, the Army and Navy reward eligible applicants with the maximum amount allowed for non-prior active duty enlistments. Army Reserve enlistments and Air National Guard can receive up to $20,000 in loan forgiveness. Active duty Air Force enlistments and Navy Reserves enlistments are eligible for up to $10,000.
The eligibility requirements vary depending on what branch you are in, but here is a general breakdown:
- Active-duty service members must not have any former military experience under the belt.
- Air Force and Navy active duty members must be enlisted for at least four years.
- Army active duty must be enlisted for at least three years.
- Army Reserves, Navy Reserves, Army National Guard and Air National Guard must enlist for at least six years.
Keep in mind that if you are an active-duty service member in pursuit of CLRP, you will not be able to obtain the Montgomery GI Bill and CLRP during the same period of enlistment. Active duty service members can still qualify for a GI Bill If they enlist again for a successive period, even after using CLRP during their first period of enlistment.
If you are in the Reserves and National Guard, note that you are allowed to use both the Montgomery GI Bill and the CLRP at the same time.
Once you qualify for the program, the military will make their first payment toward your student loan balance after the completion of your first year of service.
The Army Student Loan Repayment Program
Through the Army Student Loan Repayment Program, Army soldiers can receive up to 33% of their outstanding, qualifying federal student loan balance per year or $1,500 per year, whichever amount is bigger. However, the branch has an allotted maximum amount of $65,000 per recipient. This initial payment will be made by the military after the soldier’s initial year of service.
Not all student loans are eligible to be forgiven through this program. Here are the types of loans that do qualify:
- Supplemental Loans for Students (SLS).
- Stafford Loans.
- Perkins Loans.
- William D. Ford Loans.
- Parent Loans for Undergraduate Students (PLUS).
- Consolidated Loans (only loans that went toward the soldier’s education).
Eligible soldiers must enlist for at least three years, have earned a score of 50 or more on the Armed Services Vocational Aptitude Battery (ASVAB) and must have a high school diploma.
The Navy Student Loan Repayment Program
The eligibility requirements for the Navy Student Loan Repayment Program are quite similar to those of the Army’s. The branch will cover up to 33.3% of the loan balance per year once the soldier completes their first year of service, with the prospect of receiving up to $65,000 in loan forgiveness overall. The minimum enlistment requirement to receive forgiveness under this program is four years.
The National Guard Student Loan Repayment Program
Recipients of the National Guard Student Loan Repayment Program must have a score of 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB), serve in an eligible military occupational specialty (MOS), and serve for at least six years. Overall, eligible applicants could receive up to $50,000 in student loan forgiveness, paid directly by the military (up to $7,500 per year of service).
The Air Force College Loan Repayment Program
Qualifying soldiers could have up to 33.3% of their total federal loan balance paid by the military every year or $1,500 per year, whichever amounts to a larger sum. Once you qualify, your student loan forgiveness reward will be paid directly to your lender following your first year of service.
The Coast Guard Loan Repayment Program
If you are a servicemember of the Coast Guard, the Coast Guard Loan Repayment Program could pay back up to $30,000 of your federal student loan debt. Once you qualify for the program, you are obligated to serve at least three years. After your first year of service, the military will pay $10,000 toward your debt directly to your loan servicer.
The Health Professions Loan Repayment Program
Going into the medical field is a great way to give back to the community, but for most people, it comes with the burden of a lot of debt. This particular student loan forgiveness program is exclusively for doctors, dentists, nurses, or other qualifying health care professionals willing to serve in the military in exchange for student loan repayment.
If you are a healthcare professional considering active service or signing up for the Army Reserve, the Health Professions Loan Repayment Program could be a good choice for you. Borrowers who are eligible for this program could receive up to $40,000 per year of student loan repayment for a maximum of three years of service.
National Defense Student Loan Discharge
For veterans who took out a National Direct Student Loan or Perkins Loans, the National Defense Student Loan Discharge (NDSLD) exists. Through this program, you could have a portion of your qualifying loan balance forgiven. This program is mainly aimed at soldiers who served for at least one year in a dangerous area and/or an area with direct fire.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program is open to borrowers working in a multitude of qualified professions that are devoted to public service. As it relates to this program, public service means that you are employed full-time by nonprofit organization or government agency, including the US military. Healthcare professionals and teachers working in high-need areas are also eligible.
In order to gain student loan forgiveness through this program you must make 120 on-time, full payments over a span of 10 years, though the payments do not need to be consecutive. It is recommended that you get on a qualifying income-driven repayment plan. It’s important to note that only Federal Direct Loans may be forgiven through this program.
The Veteran’s Total and Permanent Disability (TPD) Discharge
For veterans who have suffered injuries that caused them total or permanent disability as a result of serving in the military are eligible to apply for the Veteran’s Total and Permanent Disability (TPD) program. Under this program, qualified veterans would receive total loan forgiveness.
To qualify for this type of federal student loan forgiveness, you must:
- Be able to prove that your injury occurred during your term of service in the US military.
- Be able to prove that your injury or disability has made you unable to earn enough income to be able to repay your loans.