What Are My Military Active Duty Student Loan Forgiveness Options?

Question:

Dear Steve,

I am currently active duty in the US Army; however, before I enlisted I completed 2 years of college at the University of Kentucky. I have approximately $16,000 in student loans.

Do I qualify for any sort of student loan forgiveness due to my active duty service?

Hunter

Answer:

Dear Hunter,

I’m only going to talk about federal student loans because private loans have few to no options.

In the charts below you will find more details on a range of programs that can provide temporary benefits or lead to broader forgiveness. These programs include:

  • Servicemembers Civil Relief Act Interest Rate Cap
  • Military Service Deferment
  • Deferments After Active Duty
  • Public Service Loan Forgiveness
  • 0% Interest Rate
  • Income-Driven Repayment Plans
  • HEROES Act Waiver
  • Department of Defense Repayment of Your Loans
  • Veterans Total and Permanent Disability Discharge

Military Active Duty Student Loan Forgiveness Options

Military Active Duty Student Loan Forgiveness Options

The Army also offers the Montgomery GI Bill for active-duty soldiers. This option uses a combination of your own paycheck contributions and government funding to help pay for education benefits for a maximum of 36 months. Unlike the Post-9/11 GI Bill, benefit payments will be made directly to you. – Source

The Army also offers education benefits to college graduates.

If you have already graduated from college and have outstanding student loan debt, there are programs that can help repay or cancel your loans. Additionally, you may qualify for financial scholarships offered to college graduates who wish to pursue a post-graduate degree in areas such as law and medicine.

ACCELERATED PROMOTION FOR EDUCATION PROGRAM
The Accelerated Promotion for Education Program allows college students to enter the Army at a higher rank and pay grade. A student with 24+ college semester hours may join as a Private (E-2) instead of the usual entry rank of Private (E-1). A student with 48+ college semester hours may join as a Private First Class (E-3). A student with a bachelor’s degree may join as a Specialist (E-4). Each of these levels translates to a promotion with a higher pay grade.

LOAN REPAYMENT PROGRAM
Under the Loan Repayment Program (LRP), the Army can repay up to $65,000 of your current outstanding student loan debt. This program applies to active duty, Army Reserve, and Army National Guard Soldiers.

LOAN REPAYMENT PROGRAM REQUIREMENTS

  • Soldier must decline enrollment in the Montgomery GI Bill in writing
  • Soldier must have Loan Repayment Program guaranteed in writing in the enlistment contract
  • Soldier must have no prior military service
  • Soldier must have a high school diploma and a qualifying score on the Armed Services Vocational Aptitude Battery (ASVAB)
  • Soldier must enlist in one of the critical Military Occupational Specialties (MOS) that are required under the Loan Repayment Program. (Your recruiter will have a full list of the specialties.)
  • Loans must be made, insured, or guaranteed prior to entry on active duty

FEDERAL PERKINS LOAN CANCELLATION PROGRAM
If you have already been to college and you are currently serving on active duty, you may qualify for a cancellation of your student loans.

The Federal Perkins Loan Cancellation Program gives Soldiers who have served in combat situations the chance to cancel up to 100 percent of their Federal Perkins Loans or National Direct Student Loans. This benefit does not apply to Stafford loans or PLUS loans.

Active-duty Soldiers in hostile fire or imminent danger pay areas for at least one year are eligible for cancellation of their Federal Perkins Loan Program student loans.

POST-GRADUATE SCHOLARSHIPS
If you are interested in pursuing your graduate degree, the Army offers a number of financial resources. Graduate-level scholarships are available in law and medicine.

ARMY MEDICINE SCHOLARSHIPS
The U.S. Army health care team can pay 100 percent of your tuition plus a $20,000 sign-on bonus for a graduate-level healthcare degree for any accredited medical, dental, veterinary, psychology, or optometry program in the United States or Puerto Rico through the Health Professions Scholarship Program (HPSP).

Learn more about Army Medicine graduate benefits

FUNDED LEGAL EDUCATION PROGRAM (FLEP)
The Funded Legal Education Program (FLEP) authorizes the selection of 25 active-duty Army Officers each year to obtain a legal education at government expense.

Scholarships are awarded on merit to Officers ranking from Lieutenant to Captain.

Sincerly,

You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

Damon Day - Pro Debt Coach