Student loan debt is a rapidly growing problem, and a lot of people are beginning to realize that student loan debt is only going to get worse. No one ever plans to get into an army, but if you do, you might be eligible for student loan repayment. Can Army Officers Get Student Loan Repayment?
Under certain circumstances, military members are eligible for student loan repayment. Officers who have served on active duty for at least one year or who have been dismissed due to a service-connected disability are eligible.
How Can An Army Officer Start Their Loan Repayment?
Student loan repayments for officers depend on your circumstances and the military branch in which you serve. Some common plans that may provide the proper services are as listed:
- Direct Loan – which allows you to make monthly payments that are automatically deducted from your paychecks. This makes it easy for you to manage your finances and avoid late fees or penalties associated with missed payments.
- In-House Repayment Plan – If you work for a government agency or college that participates in this program, your employer pays directly into your loan servicer’s account each month, and then you make regular payments against those funds.
- Pay As You Earn (PAYE) repayment option lets service members make debt payments as soon as they leave active duty without having to worry about their credit scores or other financial concerns first.
Which Repayment Plans Are Available For Different Ranks?
The amount of student loan debt that you are responsible for will vary depending on your military rank and experience.
If you are a commissioned officer, then the Department of Defense (DoD) provides a direct financial assistance program known as Inter-Service Allotment (ISO). This program allows highly qualified officers to have their student loans forgiven based on how much education they have completed.
Additionally, active-duty service members who agree to serve at least three years after completing their undergraduate degree may qualify for an ESPP in which their outstanding federal debt is reduced by up to $20,000 per year. As an enlisted member or warrant officer in the DoD, service members’ housing allowance operates similarly to Social Security benefits in that it reduces monthly payments towards your federal student loan obligation.
Loan Repayment Program
The United States Army offers the Loan Repayment Program (LRP) for service personnel who sign up as recruits (and not prior-service military) for three years or longer into active duty. The soldier must disenroll from the GI Bill under this program, which is an important consideration when looking into LRP options.
LRP is only for student loans “made, insured, or guaranteed before entry on active duty,” and the student loans must meet certain qualifying criteria, which include:
- Any loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965;
- Any loan issued under such title’s component E;
- Loans made under part E of such title (as in the William D. Ford Federal Direct Loan Program).
- A loan that is taken out for educational purposes
As such, LRP can be a good option for loan repayment for individuals with a military background.
Loan Forgiveness And Its Benefits
There are many loan forgiveness programs available for servicemen and women in the military. These programs typically grant a certain percentage of your loan amount forgiven after a set period of time, such as 10 years or 25 years. Some also offer special benefits such as deferment or forbearance on future loans.
The Department of Defense’s MyCEL program is perhaps the most comprehensive. It provides flexible repayment options, low-interest rates, and a range of other benefits that make it an excellent option for those who are looking to consolidate or refinance their debt. It has a wide variety of eligibility requirements that ensure that only those who truly need assistance can access this program.
These include being honorably discharged from service, having less than $60,000 in total combined indebtedness (including Federal student loans), meeting specific income thresholds, and making regular monthly payments towards your debt as directed by the DoD.
Conclusion
It can be tricky to know just how to go about obtaining student loan repayment. Luckily, with plans and programs devised by many organizations and the military itself, it has become increasingly easier for army officers to attain support with their student loan repayments.
FAQs
- Does the army pay off student loans in the UK?
Up to 100 AUBS are awarded each year, with £6,000 granted to students over the length of their studies (£7,000 for four-year degrees).
- Does the Air Force provide LPR?
Under JAG, the Air Force will pay up to $65,000 of your student loan debt for three years where you have to make equal annual installments.
- What happens to student loans after joining the army?
Your student loan lender will allow you to defer or postpone payments on your student loan while you are on active military duty.
- Does joining the army defer your student loans?
If you’re serving on active duty and your service is during a time of war, or military operation, and so on, you can defer your student loans.
