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Student Loan Benefits for Military Service Members

July 1, 2015 | Adam S. Minsky, Esq. Articles Income-Driven Repayment Loan Forgiveness Student Loans 101

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There was a time when serving in the military could essentially guarantee a young American a free college education. Not anymore. Today, many people who serve in our armed forces are also student loan borrowers. Luckily, there are some important student loan benefits and programs that are specifically geared towards military service members, although too few people are aware of them:

Caps on Interest Rates

The Servicemembers Civil Relief Act (SCRA) caps interest rates on all student loans (federal and private) at 6% for borrowers serving in “active duty” status. This is what got Sallie Mae/Navient in big trouble recently, as they failed to comply with the SCRA or inform military borrowers of their rights. The U.S. Dept. of Education also halts all interest accumulation for up to five years for certain federal Direct student loan borrowers who are serving in a “special pay” hostile area.

Military Deferment

Federal student loan borrowers serving in the military can defer payments on their loans during, and immediately following, active duty deployment.

Waiver of Documentation Requirements for Income-Based Repayment (IBR)

Borrowers on income-driven repayment plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) must submit annual documentation of income in order to stay in the program and have their monthly benefits be recalculated. For obvious reasons, sending in such documentation might be difficult for borrowers actively serving in the military. The HEROES Act waives the annual re-certification requirement for federal student loan borrowers in active duty status, allowing them to extend their income-driven monthly payments beyond the typical 12-month period.

Public Service Loan Forgiveness

Direct federal loan borrowers on an income-driven repayment plan and working full-time for the military may make progress towards Public Service Loan Forgiveness, which allows any remaining federal loan balance to be forgiven after 10 years of qualifying monthly payments. Military service members do not have to be in “active duty” status to make progress towards this student loan forgiveness program; they simply must be working “full-time” for the military, even if it’s in a civilian capacity.

Disability Discharge for Veterans

For veterans who have been certified as unable to work due to a service-connected disability, they may be eligible to have their federal student loans discharged (canceled). Certain private lenders also have disability discharge programs.

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Articles Income-Driven Repayment Loan Forgiveness Student Loans 101

About Adam S. Minsky, Esq.

Adam S. Minsky founded the first law office in Massachusetts devoted entirely to assisting student loan borrowers, and he is one of the only attorneys in the country practicing in this area of law. He provides counsel, legal assistance, and direct advocacy for borrowers on a variety of student loan-related matters. He regularly speaks to students, graduates, and advocates about the latest developments in higher education financing.

Books by Adam S. Minsky

The Student Loan Handbook for Law Students and Attorneys

The Student Loan Handbook for Law Students and Attorneys

Student Loan Debt 101

Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans

Student Loans for Parents and Cosigners

The Student Loan Guide for Parents and Cosigners

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asminsky@minsky-law.com
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Boston, MA 02110

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