Servicemembers Civil Relief Act Interest Rate Cap
The Servicemembers Civil Relief Act allows veterans who areon active duty to have the interest rate on their student loans decreased to 6%. This applies to both federal and private 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 deduction will be retroactive for their full time on active duty.
This interest rate deduction can also apply to other loans, like auto loans, personal loans and credit cards.
In addition to the SCRA interest rate cap, federal law dictates that if you for served 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 can also be applied retroactively, even if youre no longer in the military. Veterans should contact their loan servicers to find out how to apply.
The Navy College Loan Repayment Program
Sailors have access to about the same benefits as Soldiers, with up to $65,000 in lifetime loan forgiveness available to those who qualify for the benefit.
Like Soldiers, theyre only eligible to begin receiving CLRP benefits after theyve completed at least a year of service, and they cant qualify for the program unless they agree to sign up for at least four years of service.
For full details on how Navy SLRP works, please visit my Guide to the Navy Student Loan Repayment Program.
Paying Student Loans Back
Since student loans are loans and not grants, you will have to pay them back. The good news is, for federal loans, you will probably get a six month grace period. This is designed for you to be able to have time to find a job before you start to have to pay them back. If you do drop out of school or go down below half-time status, you will have to start paying them off then.
The grace period applies to direct subsidized/unsubsidized loans, subsidized/unsubsidized Federal Stafford loans, and some private loans. The grace period does not apply to PLUS
You can also choose to consolidate your loans during your grace period.
As far as payment plans go, that depends on the repayment plan you have set up. The default plan is the Standard Repayment Plan which is a 10-year program of fixed monthly payments.
There are also other options if you are having trouble keeping up on your payments. These are:
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Your Military Spouse Student Loan Forgiveness Options In 2021
Being married to a military member brings many difficulties. You might be required to adjust your lifestyle frequently during deployments and missions. It can be hard to continue education, see loved ones, or even plan your future under these conditions.
However, luckily, the government recognizes the dedication and challenges of military service members and their spouses. Therefore, military spouses are subject to multiple options when it comes to their student loans.
Some of these benefits come in the form of forgiveness of the existing debt, while others help to avoid the debt in the first place. This guide will focus on the Military Spouse Student Loan Forgiveness options and other programs to ease the debt repayment plans.
You Dont Know What Kind Of Federal Loans You Have
Its very common for borrowers to not know what kind of federal loans they have. You can see what loans you have by logging into your account on StudentAid.gov, going to the My Aid page , and scrolling down to the Loan Breakdown section.
There, youll see a list of each loan you have borrowed, even if you have paid the loan off or consolidated it into a new loan. Direct Loans begin with the word Direct. Federal Family Education Loans start with FFEL, and Perkins Loans include the word Perkins in the name.
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The Military Spouse Preference Program
Perhaps the most difficult task for military wives and husbands is being able to land good-paying, stable employment through all the moves and relocations required by service in the Armed Forces.
Fortunately, the Department of Defense takes military spouse employment seriously, and it created the Military Spouse Preference Program to help military spouses get hired to fill vacant DOD civilian positions.
The program helps military spouses secure positions throughout the world, as its coverage includes both state-side, as well as to all U.S. territories, possessions and overseas areas.
Theres some restrictive criteria that determines when the MSP benefit kicks in, so for an explanation on just how this program works, please be sure to visit my page on the Military Spouse Preference Program.
Military Student Loan Benefits For Those In Active Service Or Veterans
May 23, 2018
Public Service Loan Forgiveness0% InterestHEROES Act WaiverDepartment of Defense Repayment of LoansVeterans Total and Permanent Disability Discharge
You can find more military affiliated resources by checking out our trusted partner, Military.com.
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The Servicemembers Civil Relief Act
The servicemembers Civil Relief Act was introduced in 2003 by President Bush. In essence, the program is a late addition to the 1940 Soldiers and Sailors Civil Relief Act . With these two laws, you get a better idea of the benefits available for military personnel who are inactive duty.
Under these laws, youll get a variety of benefits however, the most relevant of these benefits is the following:
- All debts you had prior to enlisting in the military receive a 6% maximum cap on their respective interest rates.
How do you employ the benefits of SCRA to your advantage? If you have any debts that have an interest rate higher than the maximum cap of 6%, before you enlisted for service, then you are entitled to a reduction in that interest rate.
This certainly works for all kinds of debts like car loans, credit card debts, and mortgages. The SCRA interest rate reduction differs from interest deferment such that it actually forgives student loan borrowers their debts. Instead of simply delaying the inevitable until a later date. For debts you accumulated after joining the military, the SCRA will have nothing to do with them.
Va Student Loan Forgiveness Eligibility And Application
VA Student Loan Forgiveness
If youre a disabled veteran, you can qualify for disabled veteran student loan forgiveness by providing documentation from the VA that shows you have received a VA disability determination because you:
- Have a service-connected disability rating that is 100 Percent Permanent and Total OR
- Are totally disabled based on an individual unemployability ratingOR
- Have a service-connected disability rating that is 100% scheduler .
Youll want to download your official VA Benefit Summary Verification letter to prove your TPD discharge eligibility.
In case youre wondering HOW to do that, heres a quick tutorial in 5-simple-steps:
- Step #1: Login to your eBenefits account HERE.
- Step #2: On the left-hand side of the page, click the Disabilities link to see if any of your ratings have changed .
- Step #3: Next, go to the top of the page, and hover over Manage and then click Documents and Records.
- Step #4: Click VA Letters
- Step #5: Now click Benefit Summary Veteran Benefits and scroll down to check your current rating, monthly payment amount, and if youre permanently and totally disabled.
Disabledveterans can also qualify for a TPD discharge by having a physician certify onthe TPD discharge application that you are unable to engage in any substantialgainful activity due to a physical or mental impairment that:
Physician Who Certifies Your TPD Discharge Application
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Perkins Loan Cancellation And Discharge Programs
You may be eligible for partial or total Federal Perkins Loan forgiveness under certain circumstances. You may cancel a portion or all of your Perkins Loans based on your employment or volunteer service. Education and healthcare workers may qualify for Perkins Loan Cancellation.
Meanwhile, you may have your loans discharged if you cite certain conditions, including bankruptcy, school closure, being a spouse of a 9/11 victim, total and permanent disability, veteransâ disability, or death.
Military Spouse Education Benefits
Far and away the most valuable benefits available to military spouses are those created to help pay for higher education costs.
In fact, it should be relatively easy for you to earn a full, four-year college or university degree without having to spend much of your own money, but to do that, youll have to make some smart decisions.
Make sure to take advantage of each of the following education benefits packages in order to reduce your out of pocket costs!
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No One Deserves It More Than Military Spouses
While everyone is aware of the sacrifices military personnel are forced to make, very few people outside of the military understand just how much military spouses must go through to make ends meet.
From deployments to cross-country moves, to raising children, paying the bills, and taking care of business often entirely on their own, nobody works harder than military spouses.
Fortunately, in 2018, the Federal Government continues to fully fund some exceptional military spouse benefits programs, offering all sorts of financial assistance and other benefits to the husbands and wives of US military personnel.
Closed School Discharge Program
This student loan forgiveness program removes your repayment obligations if your school shuts down while you are enrolled. Your student loans may also be eligible for discharge if your school closes soon after you withdrew from the institution.
A closed school loan discharge is available for Direct Loans, FFEL Program loans, and Perkins Loans. The school secretary usually sends you an application for this program upon closure. You may also contact your loan servicer directly.
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Lifelong Opportunities For Lifelong Enrichment
As a JAG, youll have every opportunity to continue educating and challenging yourself, taking your career to new and rewarding places.Continuing Legal Education courses are an excellent way to sharpen your skills throughout your career.You may also apply for tuition-free Master of Laws programs in specialties such as government contract law, environmental law, labor law, cyber law, air and space law and international law. This is a competitive program that typically selects more experienced captains and majors. Those selected receive full tuition, fees and a book allowance from the Air Force while continuing to serve on active duty, thus receiving full pay, allowances and other benefits while obtaining their advanced degree. After completing the program, you will receive an assignment that utilizes your advanced legal education.Military developmental education is also available. Opportunities include Squadron Officers College, Air Command and Staff College and Air War College.
STUDENT LOAN REPAYMENT AND TUITION SUPPORT
For continuing education costs, you may also be able to receive benefits under the Post-9/11 GI Bill. Its even possible to transfer your benefits to your spouse or dependent children.
View details on loan repayment and financial incentives offered.
Transferability Of Post 9/11 Gi Bill Benefits
The most crucial side of the Post 9/11 GI Bill benefits is its transferability. Whether it is a partial aid or fully funded assistance, the military personnel who access the Post 9/11 GI Bill benefits can transfer to their close relatives . There are eligibility requirements for this option though it is effortless to pass them. Those requirements are:
- Military personnel must have at least six years of full-time service under their belt
- Military personnel should agree with the active status and services for additional for years before the time that the transfer happens
Another advantage of this program is that the benefits can be split up to various dependents according to their needs and preferences. For example, if a military spouse has three children, all of those children can take an equal share of the Post 9/11 GI Bill benefits. Requirements are easy, though the benefits that you can get from this program are enormous. Thousands of dollars are available to the families of military personnel, and that is why this program gets so much attention from the public and considered one of the most comprehensive aid programs around the country to this day.
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Student Loan Forgiveness For Military Spouses
If you serve in any branch of the military, hopefully youre aware of the various military student loan forgiveness programs available to past and current service members. What you may not realize is that military spouses are not eligible for any of these loan forgiveness programs.
Thankfully, there are other ways for eligible military spouses to receivestudent loan forgiveness and assistance. Here are some of the best options.
You Previously Tried To Certify Employment For Pslf But Were Denied
If the Department previously said your employer was not eligible for PSLF then you need to submit a new form through the PSLF Help Tool to see if you can receive credit toward forgiveness. You can also see which employers the Department has already deemed eligible through the PSLF Help Tool. Please note that this waiver does not affect qualifying employer rules. Your employer still needs to be a governmental organization, a 501 organization, or a not-for-profit organization that provides a designated public service to get PSLF under normal rules and the Limited PSLF Waiver.
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Check Your Credit Report
If you received loan forgiveness due to your service-connected disability, your credit report should not state that you still owe the debt. Other borrowers who receive a disability discharge are monitored for three years by the Department of Education. But if you received a discharge based on VA documentation, you dont have to worry about this step and your credit report should show that you no longer owe the loan, not that it was assigned to government for monitoring. And remember, you can check your credit report for free.
How Is The Reward Structured
Similar to Teacher Loan Forgiveness, this Military Spouse Student Loan Forgiveness brings total benefits in 5 years. However, in this program, applicants will receive some forgiveness percentages for every service year:
- In the first and second service year, the borrower gets a 15% discharge
- During the third and fourth service years, the borrower gets a 20% discharge
- In the fifth year, the debt is reduced by 30%.
Borrowers need to know that the discharge rates include interest payments for the year. The benefit is the same for many people , but AmeriCorps VISTA or Peace Corps volunteers can only receive up to70% debt reduction for four-year service.
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The National Guard College Loan Repayment Program
Lets not forget the Guardsmen, whove been especially busy in recent years with the wars in Iraq and Afghanistan, and who were finally made eligible to receive some serious financial assistance a couple years back.
Both Officers and enlisted National Guard personnel are eligible to receive up to $50,000 in student loan forgiveness benefits, but the eligibility criteria for qualifying to receive these benefits is pretty complicated.
If youre interested in finding out how it works, youll need to visit my Guide to the National Guard Student Loan Repayment Program.
Which Benefits Do You Qualify For
Military spouse benefits come in a variety of forms, from scholarships to tuition assistance, retail discounts to resume advice.
And while veterans benefits for spouses cover a wide variety of different expenses, some of these programs are substantially more popular than others.
This page outlines the many benefits for military spouses currently on offer, focusing on the most popular programs.
The pages I link to below will offer additional details on each specific benefit program, along with instructions on how to actually apply for the benefits, so be sure to click through the links for more info.
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Military Spouse Benefits By Service Branch
In addition to all of the programs listed above, each service branch also provides a variety of benefits packages to the husbands and wives of their personnel.
Some of the best military wife benefits are found in the branch-specific programs, especially when it comes to scholarships and grants for military spouses.
To help you determine which benefits programs you qualify for, here are a handful of those available from each branch of the military.
National Defense Student Loan Discharge
The National Defense Student Loan Discharge program is available to some military members.
Federal law says that service in a location that qualifies a military member for hostile-fire or imminent-danger pay can qualify for up to 50 percent of their loan being canceled if their military service ended before Aug. 14, 2008. For those whose service began on or after that date, they may have up to 100 percent of their loan forgiven.
This is only for Federal Perkins Loans. Under federal law, the authority for schools to make new Perkins Loans ended on Sept. 30, 2017. But if you have any old loans, it is worth your while to check this out. Perkins Loans were usually given by schools rather than banks.
A school must cancel up to 100% of the outstanding balance of a Perkins Loan for a full year of active duty. The borrowers commanding officer must certify the borrowers service dates. Active-duty service for less than a complete year or a fraction of a year beyond a complete year does not qualify. A complete year of service is 12 consecutive months.
Contact your lender for more information.
This article was contributed by GetOutOfDebt.org, a site that provides free debt consolidation help and debt relief advice for people looking for answers.
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