Your Guide to Military Student Loan Forgiveness and Repayment

 January 28, 2020
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If you’re an active duty serviceperson or veteran with student loans, you could qualify for military student loan forgiveness, repayment relief or refinancing. As one of the millions of Americans burdened with student debt, your service could qualify you for significant relief.

Here’s a list of options for military student loan forgiveness and repayment that will help you get out of debt fast.

Military student loan repayment assistance programs
Military student loan forgiveness and discharge programs
Other options for managing your student loan debt
Finding student debt relief for servicemembers and veterans

Military student loan repayment assistance programs

What’s better than lower monthly payments or a reduced interest rate? How about no student loans at all?

There are several military student loan repayment assistance programs that can help eliminate some or all of your debt.

Army Student Loan Repayment: Active Duty

The Army Student Loan Repayment: Active Duty program offers military student loan repayment assistance to people on active duty. Among other requirements, you must enlist for at least three years and score 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB).

If you qualify, the Army will pay up to 33.33% of your principal balance each year for three years. You could receive up to $65,000 in loan assistance. Note that you can only use this money to pay off federal student loans, such as Direct, FFEL, and Perkins Loans. Private loans aren’t eligible.

The Perkins Loan program expired in September 2017. However, if you took out Perkins Loans in the past, they still qualify for loan assistance.

Army Reserve College Loan Repayment Program

If you’re in a qualifying Military Occupational Speciality (MOS), you could get assistance through the Army Reserve College Loan Repayment Program. You must enlist for at least six years and have loans before you go on active duty.

This program will pay 15% of your loan balance for up to $20,000. It applies primarily to federal student loans, not to private ones.

Health Professions Student Loan Repayment Program

The Health Professions Loan Repayment Program helps doctors, dentists, and other healthcare professionals on active duty or in the Army Reserve. Qualifying borrowers can receive up to $40,000 per year for up to three years. This $120,000 in military loan forgiveness could go a long way toward paying off medical or dental school loans.

Prior Service Soldier Loan Repayment Program

Army Reserve soldiers with prior military service can receive up to $50,000 toward student loan payments. You can request more information about student loan forgiveness for veterans through the U.S. Army website.

National Guard Student Loan Repayment Program

Members of the National Guard could receive up to $50,000 in military loan forgiveness. You must enlist for a minimum six-year term of service.

Navy Student Loan Repayment Program

If you’re in the Navy, you could receive up to $65,000 in student loan repayment assistance. The Navy program helps sailors in the first three years of service.

Air Force Judge Advocate General’s Corps Loan Repayment Program

If you join the Air Force Judge Advocate General’s (JAG) Corps, you could get up to $65,000 in student loan repayment assistance. You’ll receive payments over a three year period after your first year of service as a JAG officer.

Military student loan forgiveness and discharge programs

Loan repayment assistance programs give you money to help pay off your student loans, but forgiveness and discharge programs get rid of your loans completely. Below are three options for military student loan forgiveness and cancellation.

National Defense Student Loan Discharge

The National Defense Student Loan Discharge is designed to help those who have put their lives on the line for their country. To qualify, you must have served at least one year in an area deemed imminent danger or in direct fire and have a Perkins or Direct student loan.

The application for the discharge includes a Department of Defense form and a letter explaining why you believe you qualify sent directly to the servicers of your loan. The amount discharged is partial and varies, so it is best to contact your loan company.

Veterans Total and Permanent Disability Discharge

For those who have sacrificed so much, the Veterans Total and Permanent Disability Discharge is there to release you from your loans. To qualify, you must have a service-related disability documented by the Department of Veterans Affairs and been deemed permanently disabled. Most loans are eligible for military student loan forgiveness through this program.

Public Service Loan Forgiveness

Service to our country qualifies borrowers for one of the most popular student loan forgiveness programs — Public Service Loan Forgiveness. This program forgives all student loan debt after the borrower makes 120 qualifying payments while working full-time with the military or another qualifying non-profit.

Note that deferred payments do not count toward the 120 monthly payments and might extend your timeline to receive PSLF.

Other options for managing your student loan debt

Beyond military student loan forgiveness and repayment assistance, you have other options for making your student loans more manageable. The four approaches below can reduce your interest rate or lower your monthly payments. If you’re dealing with a lot of student debt, these four strategies could help ease the burden.

Cap interest through the Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act could provide some relief from student loan debt. This act caps the amount of interest that can be collected on an active duty service person’s debt at 6.00%. This is especially good for borrowers with high-interest private loans, which often have higher rates than federal student loans.

For example, using our student loan payment calculator, a $20,000, 10-year loan at 8.5% interest has a monthly payment of $248. With the rate reduced to 6%, the monthly payment is lowered to $222. That’s a savings of $3,112 over the 10-year period. Apply those savings as extra payments on your loan and you’ll cut a full year from your repayment plan.

To qualify for this benefit, your loans must be more recent than August 14, 2008. Contact your loan servicer for information about SCRA eligibility.

Interest waiver for those at dangerous posts

Anyone deployed to an area that qualifies for imminent danger or hostile fire pay is entitled to have all interest waived on their federal student loans, so long as they were first disbursed on or after Oct. 1, 2008.

The Department of Education uses a data-matching system to identify service members who qualify for this benefit, so it should be applied automatically. But if you think you’ve been passed over for this key waiver, contact your servicer once you get the chance, and your interest charges can be thrown out retroactively. 

Defer your student loans while you’re on active duty

If you’re currently serving, your monthly payment doesn’t have to be a burden. The Department of Education allows you to defer your student loan payments during active duty service and 13 months after your return (or until you return to school with at least half-time status).

During this time, the government will pay the interest on your Direct Subsidized and Subsidized Federal Stafford Loans while the principal is delayed. While you won’t pay your loans off any faster, you also won’t have to worry about accruing interest while your payments are paused.

This is not the case for unsubsidized loans, however. If you have an unsubsidized loan, you might benefit from using a student loan deferment calculator to estimate the amount of interest you will accrue while in deferment.

Lower your monthly payments with an income-driven repayment plan

Another way to manage your monthly payments is to apply for an income-driven repayment plan. These plans take into account your current discretionary income and family size in order to adjust your monthly payments accordingly. In some cases, your new monthly payment could be as low as $0.

For example, Income-Based Repayment is one of the most popular plans. It limits your monthly payments to 10% or 15% of your discretionary income and results in forgiveness of any remaining debt after 25 years.

Overwhelmed by the thought of all the paperwork required to maintain enrollment? That’s where the Heroes Act Waiver (HAW) comes in. With HAW, you’re not required to submit applications or proof of income during active duty periods. This means that even if your income increases, you can request to maintain the old, lower payment.

Note that this option does come with possible drawbacks. So always consider the pros and cons of income-driven repayment before enrolling.

Refinance your student loans for a lower interest rate

Whether you’re a civilian or an active duty member, an effective way to tackle student loan debt is by refinancing your loans. Refinancing is the process of paying off one or more student loans by obtaining a new, single loan through a private lender. Unlike the military loan repayment assistance program, refinancing applies to both federal and private loans.

Usually, the goal is to get a lower interest rate on the new loan, and in turn, enjoy smaller monthly payments. This move can save money in interest charges, too. You might also be able to extend your repayment period to lower monthly payments even more (though this could cancel out some or all interest savings).

It’s important to note that refinancing isn’t a magical solution to your debt problem and it’s not a great choice for all borrowers. There are several important pros and cons to consider, especially when it comes to refinancing federal student loans.

For example, refinancing federal loans with a private lender means permanently giving up access to government-backed benefits, including income-driven repayment options and the Public Service Loan Forgiveness Program.

However, if you have several high-interest loans or private loans — or don’t qualify for income-driven repayment — refinancing could be the answer to cutting the cost of that debt.

Student debt relief is available for servicemembers and veterans

Student loan debt shouldn’t be a burden to carry on and off the battlefield. The government has provided incentives, benefits, and student loan forgiveness for veterans and those on active duty.

By exploring your options for military student loan forgiveness and assistance, you could gain major relief from your student loans — and perhaps even get rid of your debt entirely.

Interested in refinancing student loans?

Here are the top 9 lenders of 2021!
LenderVariable APREligible Degrees 
1.88% – 6.15%1Undergrad
& Graduate

Visit Splash

1.88% – 5.64%2Undergrad
& Graduate

Visit Earnest

2.50% – 6.85%3Undergrad
& Graduate

Visit CommonBond

1.89% – 5.90%4Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.59%5Undergrad
& Graduate

Visit SoFi

1.88% – 5.64%6Undergrad
& Graduate

Visit NaviRefi

1.90% – 5.25%7Undergrad
& Graduate

Visit Lendkey

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

2.13% – 5.25%8Undergrad
& Graduate

Visit PenFed

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.


2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Interest Rate Disclosure

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.

Auto Pay Discount Disclosure

You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.

Student Loan Refinancing Loan Cost Examples

These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.

One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.

© 2021 Earnest LLC. All rights reserved.


3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.


4 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of April 29, 2021. Information and rates are subject to change without notice.
 


5 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 2.25% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.


6 Important Disclosures for Navient.

Navient Disclosures

1. NaviRefi loans are made by Earnest Operations LLC, a member of the Navient family of companies, subject to individual approval and underwriting criteria. California residents only: Loans made or arranged pursuant to a California Finance Lenders Law license. Additional terms and conditions apply.

– To qualify, you must be a U.S. citizen or non-citizen permanent resident of the United States, reside in a state we lend in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.navirefi.com/help-and-questions. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Loan terms are subject to eligibility. Approval and interest rate depend on the review of a complete application. Loan approval is subject to confirmation that your debt-to-income, free cash flow, credit history and application information meet the minimum requirements. You must have a minimum FICO score to be considered.

– You can choose between fixed and variable rates. Fixed interest rates are 2.75% – 6.04% APR (2.50% – 5.79% APR with Auto Pay discount). Starting variable interest rates are 2.13% – 5.89% APR (1.88% – 5.64% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

– You can take advantage of the 0.25% Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. NaviRefi rate ranges are current as of June 1, 2021 and are subject to change based on market conditions and borrower eligibility.

– The information provided on this page is updated as of 06/1/2021. Earnest Operations LLC reserves the right to modify or discontinue (in whole or in part) this loan program and its associated services and benefits at any time without notice. Check www.navirefi.com for the most up-to-date information. Terms and Conditions apply. Call 855-284-4893 for more information on our student loan refinance product.

– Earnest Operations LLC – NMLS #1204917, CA CFL #6054788 – 535 Mission St., Suite 1663, San Francisco, CA 94105.
Navient Solutions, LLC – NMLS #212430 – 123 Justison St., Wilmington, DE 19801. Visit https://navirefi.com/lending-licenses for a full list of licensed states.


7 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.


8 Important Disclosures for PenFed.

PenFed Disclosures

Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.