Army SLRP Benefits
What’s new for 2016? Unfortunately, not much.
The Army student loan repayment program is typically referred to as Army LRP or SLRP, but is officially known as the “Army College Loan Repayment Program”.
Army LRP and was created to offer a special incentive to highly qualified individuals who enlist in one of the Army’s critical military occupational specialties (MOS).
In 2016, those eligible for Army SLRP benefits will receive annual payments to help reduce their student loan debt, with a lifetime maximum cap set at $65,000. Payments begin on the date that you complete your first year of service with the Army.
These benefits are only available to Soldiers who have not previously served in the military. Other branches of the military provide similar Military Student Loan Forgiveness Programs, but the Army’s program appears to be the easiest to qualify for.
To qualify for Army student loan repayment benefits, you must enlist for Active Duty service in the Army and:
- Request to participate in the LRP program during your enlistment process
- Get your participation annotated in writing on your enlistment contract
- Decline participation in the Post 9/11 GI Bill in writing, using DD Form 2366 (see section below for details)
- Hold a high school diploma (GED equivalents will not suffice) at the time of your enlistment
- Score a 50 or higher on the Armed Forces Qualification Test (your main score from the ASVAB you took before enlisting)
- Enlist in a Military Occupational Specialty (MOS) deemed eligible for participation in the CLRP at the time of your enlistment (check with your recruiter to make sure that your MOS applies at the time you join up, as eligible programs change by the day)
- Be on a non-prior service accession (unless you’re using enlistment in the Reserves to qualify for LRP benefits)
- Have a student loan that qualifies for participating in the Army’s CLRP program (one insured or guaranteed by the Higher Education Act of 1965, Title IV, Part B, D, or E)
NOTE: Pay close attention to the third bullet point above.
If you plan on returning to college at a future date, then might want to sacrifice participation in the Army student loan repayment program, or at least think about joining for an extended service contract to prevent yourself from being denied access to Post 9/11 GI Bill benefits.
To ensure your access to Post 9/11 GI Bill benefits, make sure you enlist for at least 6 years, so that you qualify to participate in both the Army LRP program and the Post 9/11 GI Bill.
If you meet the eligibility criteria outlined above, you can begin receiving loan repayment benefits as soon as you complete your first year of service with the Army.
Many, but not all student loans qualify for participation in the program. Qualifying loans include those that are:
- Made, insured or guaranteed under the Federal Family Education Loan Program, part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071)
- Made under the William D. Ford Federal Direct Loan Program, part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a)
- Made under Federal Perkins Loans, part E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087aa)
- Incurred for education purposes (student loan debt only) and made by a lender that is:
- An agency or instrumentality of a State
- A financial or credit institution, or an insurance company, that is subject to examination and supervision by an agency of the US or any State
- From a pension fund or a non-profit private entity, subject to a case by case review and approval
Examples of Eligible Loans Include:
- Parent Loans for Undergraduate Students (PLUS loans)
- Supplemental Loans for Students (SLS Loans)
- Stafford Loans
- Perkins Loans
- William D. Ford Loans
Examples of Non-Eligible Loans Include:
- Private loans
- Equity Loans
- State Funded Loans
- Institution Loans
- Consolidation Loans for military dependents (spouses, children, etc.)
How Much Can I Get in 2016?
LRP benefits come with different rates depending on your status (whether you’re on Active Duty or in the Reserves), but as of 2016, there’s still a bit of a loophole in this process.
Technically, Active Duty personnel are supposed to get more money, but in reality, those serving in the Reserves can qualify for just as much in annual benefits. Here’s how:
Army SLRP Rates for Active Duty Soldiers
Those serving in Active Duty stations are eligible to have 33.33% (or $1,500, whichever is higher) of the outstanding principle balance of their loans paid off for each year of service.
Payments begin on the date that you complete your first year. However, if you are shifted to an MOS role that isn’t eligible for LRP benefits, or if your role changes and is no longer deemed eligible, then you will lose your eligibility.
Army SLRP Rates for Army Reserves
Those serving in the Army Reserves are eligible to have 15% (or $1,500, whichever is higher) of the outstanding principle balance of their loans paid off for each year of service.
Did you see how that works? Even though Reserves members are only eligible to have half as much of their debt paid off in terms of the percentage, if their loans are small enough that $1,500 is higher than 15%, they can receive repayments at the same rate as Active Duty personnel.
Is My Loan’s Interest Covered Too?
One major flaw in the Army’s college repayment program is that it doesn’t provide any financial assistance for interest that you’ve accumulated on your student loan debt.
Instead, the program only offers you help with paying off the principle balance of your loan.
This is definitely a downer, as the benefits would be substantially more valuable if they did cover interest as well, but you may also be able to escape interest accumulation by speaking to your lender about their interest rules.
Can I Receive Deferment or Forbearance for my Loan?
Many loans do not accumulate interest while the borrower is deployed on active duty service, and some have other deferments options, so be sure to speak to whoever services your loan to find out if you can have interest forgiven or deferred to a later date.
Are SLRP Benefits Taxable Income?
Unfortunately, as of 2014, yes, your Army college loan repayment program benefits are counted as taxable income.
However, you won’t ever actually get any of the money that’s provided as LRP for your debt, because the Federal Government sends payments directly to your lender, and it witholds 28% of what it would have paid out on your behalf each year for distribution to the IRS.
So, while LRP benefits do count as taxable income (and have to be accounted for by a separate W-2 that you will receive each year), you won’t have to make any out of pocket payments to account for them.
Army SLRP Benefits & The Post 9/11 GI Bill
When the SLRP program was first announced, in order to qualify for its benefits, you had to completely waive participation in the Post 9/11 GI Bill, but the situation has changed (according to multiple first-hand reports), and you can now apparently satisfy eligibility guidelines for both programs simply by signing an extended service contract.
While army college loan repayment benefits are available to those who sign up for 4 year enlistments, both SLRP and Post 9/11 GI Bill benefits are being made to those enlistees who agree to join up for 6 years.
If you ever plan on returning to college again, then you will want to strongly consider enlisting for at least 6 years, since Post 9/11 GI Bill benefits provide tens of thousands of dollars in tuition assistance.
Remember that you will only be able to receive loan repayment program benefits on loans that were created before you enlisted, and if your enlistment contract specifically states that you’re participating in the program.
Your loans must qualify for eligibility, and you must remain qualified in your original MOS throughout your initial term of service to continue receiving the benefit.
If, at any time, your loan ends up in default, then you will disqualify yourself from continued SLRP, so stay on top of things to prevent from losing out on the thousands of dollars that you deserve!
For More Information
Talk to your local Army recruiter to get additional details about the Army college loan repayment program, or visit the official Army HRC site here for access the program’s official Information Paper.
And to save tens of thousands of dollars on future education costs, make sure to take a look at our Military Education Benefits Guide.
Please Help Me Out
Help spread the word that Army LRP exists by posting a link to this page on Facebook, Twitter or Google+.
The more Soldiers who sign up for LRP, the more likely this program is to remain funded.
Please do your part to ensure that LRP benefits remain available for generations to come by spreading the word today!
Thanks for your support, and please come back soon.