What student loan forgiveness options are available for military?

In appreciation for their service and sacrifice, military service members may be eligible for student loan forgiveness if they have student debt upon enlisting. There are several different programs they may be eligible for that will discharge some or even all of their debt.

One important thing to keep in mind before signing up for a loan forgiveness program is college after enlistment. Military service members who do not take advantage of student loan forgiveness will instead be eligible for the Post-9/11 GI Bill (they will not be eligible for both). This bill helps Veterans and their family members pay for college, graduate school, and training programs.

Military College Loan Repayment Program (MCLRP)

An umbrella term for several programs in each branch of the armed forces, the Military College Loan Repayment Program (MCLRP) can pay off up to $65,000 of your student debt. You can even use it to pay back money borrowed before you joined the service. To qualify, you must be:

  • A new enlistee with no prior military service.
  • A member of the Reserves stepping up to active duty.
  • A member of active duty who is reenlisting.

Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness Program is available to those who have worked for the military, or at other jobs in public service, for the last 10 years.

To access this funding, you must work full time, which can be as low as 30 hours per week. Your employer makes the final call on whether you are considered full-time. Some of the jobs that qualify are:

  • Service in the military
  • Emergency response and management
  • Public safety including police and other types of law enforcement
  • The practice of law in the public interest sector
  • Teaching in an early childhood program like Head Start or a government-funded preschool
  • Working with the elderly and disabled in the public sector
  • Nursing and other professions working in public health
  • Public schools and libraries

The Public Service Loan Forgiveness Program (PSLFP) is available, even if you’ve already consolidated your loans into one to get a lower, single monthly payment. You will need to make 120 monthly payments on time. After that, the balance that remains is forgiven. You can count payments that you made before you signed up for the PSLFP, as long as they were part of a qualifying repayment plan. It will take you at least 10 years after you make your first qualifying payment before you can apply for PSLF. Click here to apply for this forgiveness program if you have made 120 qualifying payments

The Public Service Loan Forgiveness Program only applies to federal student loans; private loans are not eligible for consolidation. You may qualify if you are on one of these types of repayment plans:

  • Income-based or income-contingent, even if you qualify for a zero monthly payment
  • Standard Plan with a 10-year repayment schedule
  • Other Direct Loan plans as long as the monthly payments are equal to or greater than they would be on the standard 10-year plan

National Defense Student Loan Discharge

If you borrowed through a National Defense Student Loan, you may be eligible to have part of what you owe discharged. National Direct Student Loans and Perkins Loans can be partially forgiven if you spent one full year in a hostile fire/imminent danger area as part of service in the United States Armed Forces.

If you feel you might qualify for this, send your loan servicer a copy of your military discharge paperwork and a letter explaining why you feel you are eligible. They will review it and let you know if you meet the requirements.

Higher Education Opportunity Act of 2008

While it’s not loan forgiveness per se, the Higher Education Opportunity Act of 2008 can still save you a significant amount of money. Under this legislation, members of the military on active duty may qualify to have the interest waived on their student loans for up to 60 months. Eligible service people are those who are:

  • On active duty or serving in the National Guard during a war, a military operation, or a national emergency.
  • Serving in a hostile area that qualifies for special pay under section 310 of title 37 of the United States Code.

To learn more about the Higher Education Opportunity Act of 2008, contact your educational institution’s financial aid office.

Active Duty Health Professions Student Loan Repayment Program

Qualified health professionals who fill a need in the military where there is a shortage of skills may get part of their loans dismissed, up to $40,000 annually for three years. You must be a commissioned officer on active duty to qualify for this program. If approved, you can apply this to Stafford, Grad PLUS, Consolidation, Perkins, Health Professional Student Loans, and private student loans. For more information, click here.

Prior Service Soldier Loan Repayment Program

If you are an Army Reserve member with a history of military service, you can access up to $50,000 toward paying off your loans. More information about this type of assistance for veterans is available through the Army’s website. The National Guard offers a similar program for those who enlist for a term of at least six years. Do you think you qualify for this repayment program? If so, click here to apply for this awesome opportunity.

Veterans Total and Permanent Disability Discharge

If you are permanently disabled as a result of your service in the military, most of your loans can be forgiven. To take advantage of this program, you will be required to notify the Department of Education that you have a Total and Permanent Disability. You will also be required to submit an application with credible documentation proving your disability. Be sure to send the form to the U.S Department of Veteran Affairs. Click here to fill out the application.

Keep in mind that you may owe taxes on some forms of student loan forgiveness. Consult with a tax professional about your specific situation so that you’re fully informed before you make a decision.