How to Qualify for Military Student Loan Repayment Benefits
In 2019, military student loan forgiveness benefits remain widely available to all branches via the Forever GI Bill (or for those older personnel, via the Post 9/11 GI Bill or Montgomery GI Bill).
The best loan forgiveness benefits on offer to military personnel still come from the Military College Loan Repayment Program (CLRP), which offers up to $65,000 in school loan forgiveness benefits simply for joining the military or renewing a service contract.
In fact, Military CLRP remains one of the most powerful Federal Student Loan Forgiveness Programs available to anyone in or outside the military, but the great news is that even if you don’t qualify for CLRP benefits, you are guaranteed to qualify for the single-best loan forgiveness program available to anyone, anywhere, called the Public Service Loan Forgiveness Program, or PSLF.
This Guide will walk you through all of the eligibility requirements, application procedures, and approvals processes for the CLRP programs for each branch of the military, but I’ll also cover the important parts of the PSLF, and all the other Military-specific forgiveness programs as well.
If you have any questions after reading through this Guide, please feel free to ask them in Comments section below. I review Comments on a daily basis, and will do my best to get you a reply within 24 hours!
2019’s Best Military Loan Forgiveness & Loan Repayment Programs
Military Personnel have access to a wide variety of loan forgiveness benefits, via several different programs, including:
- The Military College Loan Repayment Program (CLRP)
- The Public Service Loan Forgiveness Program (PSLF)
- The National Defense Student Loan Discharge Program (NDSLD)
- The Servicemembers Civil Relief Act (SCRA)
The rest of the Guide goes into each program in detail, explaining what it is, what it offers, and how to take advantage of the benefit.
For easy navigation, please click the links above to be taken to each program’s specific section within this Guide.
And remember, if you have questions about how these programs work, then ask away in the Comments section at the bottom of this page.
But Before I Delve Into Details on Military Loan Forgiveness…
Let me give you one really important piece of totally honest advice – EVEN IF you do end up qualifying for Military Loan Forgiveness benefits, there is a pretty good chance that everything isn’t going to work out as smoothly as you had hoped.
I can say this because I regularly receive comments from visitors who are having trouble receiving payments, getting payments applied to the right accounts, or running into all manner of other issues with the benefits that they were supposed to be receiving, so I want to warn you about it in advance.
To protect yourself from getting buried by inescapable student debt if your forgiveness benefits don’t quite live up to the hype, I recommend looking at alternative solutions as well.If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.
For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.
If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!
1. The Military College Loan Repayment Programs
The Military College Loan Repayment Program is only available if you’ve already accumulated student loan debt and are considering joining the military in an active duty role, or if you’ve previously served in an active duty role and are now considering joining the reserves.
Remember, if you don’t qualify for CLRP, then don’t give up, because you’ll still be eligible for PSLF, which is an even better forgiveness program. To skip to the PSLF section of this Guide, click here.
CLRP benefits are available from most branches of the military, including the Army, Navy, Air Force, National Guard, Coast Guard and some branches of the Reserves as well.
In order to qualify for military loan repayment program benefits, you’ll have to meet the following eligibility criteria.
CLRP Eligibility Criteria
- Be enlisting in the military for the first time (or joining the reserves after completing an active duty enlistment)
- Be enlisting in an MOS that is eligible for participation in CLRP (only those positions with shortages are eligible for CLRP benefits)
- Hold a high school diploma (GEDs and equivalency tests do not qualify you for participation in this program)
- Score at least a 50 on the Armed Forces Qualification Test
- Request CLRP participation in writing on your enlistment contract
- Have a student loan that meets CLRP program eligibility guidelines
As you can see, this program isn’t for everyone, since it requires being a new service member, or joining the reserves. If you’re already enrolled in the military, and plan on staying there, then you won’t be able to take advantage of the CLRP.
However, don’t forget that you still have access to the BEST student loan forgiveness program available to anyone, the Public Service Loan Forgiveness Program.
For details on how PSLF works, click here!
Loans that Qualify for CLRP
Not all student debt qualifies for CLRP. In fact, it’s limited to only a small subset of the total possible student loan programs floating around.
If you want to take advantage of CLRP benefits, then your loans must be:
- Federal student loans
- Not in default
- Loans that were made, insured or guaranteed under the Federal Family Education Loan Program
- Loans that were made under the William D. Ford Federal Direct Loan Program
- Loans that were made under the Federal Perkins Loans program
- Loans that are incurred for educational purposes and:
- Made by a lender that is an agency or instrumentality of a State
- Made by a financial or credit institution, or an insurance company subject to examination and supervision by an agency of the U.S. or a State
- Made by a pension fund or non-profit private entity
As you can see, this severely limits which student debt is actually eligible for CLRP benefits.
I run into people all the time who ask why they haven’t been getting disbursements, and sometimes it’s as simple as the fact that they didn’t pay close enough attention to eligibility guidelines.
For example, I’m constantly getting hounded by service personnel who tried to get repayment benefits for private loans, but that’s not possible via CLRP.
How Much Money Does CLRP Provide?
The amount of money you are entitled to varies depending on which branch of the military you join, but the maximum amount of military student loan forgiveness you can receive in your life is capped at $65,000.
The amount of money you’ll receive from CLRP is also partially determined by your duty-status, with active duty members eligible to receive up to twice as much as those personnel who join the reserves.
Here’s the breakdown by status:
- Active duty enlistees are entitled to receive up to 33.33% (or $1,500, whichever is greater) of their loans outstanding principle balance paid for each year of service that they complete.
- Enlistees in the reserves are entitled to receive up to 15% (or $1,500, whichever is greater) of their loans outstanding principle balance paid for each year of service that they complete.
So here’s the crazy thing about CLRP benefits – you don’t get it all at once, but you can get a third of your outstanding debt paid each year.
Keep in mind that it’s not 1/3 on Year 1, 1/3 of the original amount on Year 2, etc. The amount of money you get in forgiveness declines each year, because it’s 1/3 of the outstanding (or remaining) balance due.
Got that? This is important to remember, and it’s another one of those little details that many service personnel don’t pay close enough attention to. Bottom line, don’t think that your loans will disappear after 3 years!
How Does CLRP Work for Each Branch?
CLRP benefits are available from all branches of the military, but each of them have different requirements, different lifetime maximums, and different ways of disbursing the benefit.
The key thing to consider here is that you’ll get better benefits from certain branches, and literally nothing from others (looking at you Marines!).
I’ve developed full pages explaining all the details of each branch’s SLRP program in detail, which you can find through the links below.
After reading through these highlights, if you want more information, click through to get to the full Guides for each branch.
The Army College Loan Repayment Program
Out of all the service branches, the Army’s CLRP benefits package is typically regarded as the best, since it provides up to $65,000 in lifetime student loan forgiveness.
The benefit is doled out on an annual basis, beginning as soon as a Soldier completes his first year of qualifying service, and provided at a rate of either 33.33% of his or her loan’s outstanding principle balance, or $1,500, whichever amount is greater.
For full details of how Army CLRP works, please visit my Guide to the Army Student Loan Repayment Program.
The Army Reserves College Loan Repayment Program
Members of the Army Reserves are eligible to receive some loan forgiveness benefits as well, though it’s not quite as valuable as what the regular Army Soldiers get (which makes sense).
After their first year of service, Army Reserves personnel will receive annual forgiveness of up to 15% of their outstanding principal balance, or $1,500 (again whichever amount is greater).
I cover the Army Reserve CLRP benefits in detail at the same link above, so please click it for additional information.
The Navy College Loan Repayment Program
Sailors have access to about the same benefits as Soldiers, with up to $65,000 in lifetime loan forgiveness available to those who qualify for the benefit.
Like Soldiers, they’re only eligible to begin receiving CLRP benefits after they’ve completed at least a year of service, and they can’t qualify for the program unless they agree to sign up for at least four years of service.
For full details on how Navy SLRP works, please visit my Guide to the Navy Student Loan Repayment Program.
The Navy Reserves College Loan Repayment Program
Reserves Sailors don’t have access to quite as much benefit as their Active-Duty counterparts, with a lifetime max of only $10,000 of total loan forgiveness.
They’re only able to begin receiving repayment benefits after completing their first year of service, but unlike the Active-Duty Sailors, they’ve got to sign up for a longer service contract as well, agreeing to serve for at least 6 years.
I’ll go through details of how Navy SLRP works at the same link above, so click it for additional information.
The Air Force College Loan Repayment Program
Airmen get short-changed in terms of what’s available to them, with only $10,000 in lifetime loan forgiveness benefits on offer, and about the same eligibility rules applied to Soldiers and Sailors.
If you’re main reason for joining the military is to secure some financial assistance for your student loan debt (which honestly is not a good idea, and one that you’ll probably regret) then you’d do best to look to one of the other branches, because you’re not going to get much help here.
Anyway, for the full details on how Air Force CLRP works, please look at my Guide to the Air Force Student Loan Repayment Program.
The National Guard College Loan Repayment Program
Let’s not forget the Guardsmen, who’ve been especially busy in recent years with the wars in Iraq and Afghanistan, and who were finally made eligible to receive some serious financial assistance a couple years back.
Both Officers and enlisted National Guard personnel are eligible to receive up to $50,000 in student loan forgiveness benefits, but the eligibility criteria for qualifying to receive these benefits is pretty complicated.
If you’re interested in finding out how it works, you’ll need to visit my Guide to the National Guard Student Loan Repayment Program.
The Marines College Loan Repayment Program
Speaking of being short-changed, things are even worse for the Marines, where no student loan debt forgiveness has been made available since way back in 2011.
In a certain way, it does make sense that they wouldn’t offer the benefit, since the Marines have the lowest rate of enlistment by college graduates, but still… it doesn’t seem very fair.
Basically, ever since the heavy-fighting in Iraq ended, and we apparently don’t have a huge need to enlist new Marines anymore, the benefits dried up.
Unless another major war starts sometime soon, I wouldn’t expect these to be offered again, since there’s no real need to inflate enlistment in the Marine Corps while we’re at peace.
The Coast Guard College Loan Repayment Program
On the other side of coin would be the Coast Guard, who do receive a substantial percentage of enlistees from among the population of college graduates, and who offer up to $30,000 in loan forgiveness to new personnel.
Like the Army, Navy and Air Force loan forgiveness programs, benefits are first made available after completion of a year of service, but unlike them, the limitations include a stipulation that only $10,000 can be received each year.
For full details on how the Coast Guard’s program works, please visit my Guide to the Coast Guard Student Loan Repayment Program.
But Watch Out For Interest Accumulation…
Above, I mentioned that you will receive payment based on the “outstanding principle balance” of your student loans, which unfortunately means that interest is not covered by traditional military student loan forgiveness program benefits.
And that means that any interest that has accumulated on your student loan debt will remain entirely your responsibility, which is a bit of a bad deal, because the thing that makes student debt so expensive is the compound interest, which racks up tons and tons of debt over long periods of time.
However, do keep in mind that you can still save up to $65,000 in total benefits by getting access to military loan forgiveness benefits, so it’s not that big of a problem, and certainly not one that should lead to you giving up on pursuing these benefits.
No matter how you look at them, the amount of money you could be saving via the military loan forgiveness programs is huge.
… And For Taxable Income As Well
A second drawback to traditional military loan forgiveness benefits is that the amount of benefit you receive each year is supposed to count toward your annual taxable income, which must be reported to the IRS, and which means that you have to pay taxes on whatever amount you receive.
That could be a substantial sum, especially if you’re getting $10,000+ in benefits each year, so you’ll need to plan ahead to deal with the tax liabilities incurred as a result of your participation in the military student loan forgiveness program.
Fortunately, the way that the CLRP programs have been set up is that your benefits aren’t given to you in cash, or a check, as the loan repayments are made directly from the Federal Government to your lender.
That may seem like a drawback, but the good part about how this works is that the Government will hold back 28% of its payments to be provided to the IRS, covering your tax liability.
Don’t Worry, This is a Good Thing…
Why? Because we all know how hard it is to come up with a huge lump sum of taxes at the end of the year, and since the Government holds back the 28% of their payments for you, your tax liability will already have been covered.
Which means that even though you’re being taxed on the benefit, you don’t actually have to come up with any of the cash out of pocket, so you don’t have to pay anyone anything!
However, the downside to this detail is that it means you won’t actually get $65,000 in forgiveness benefits, since 28% of that $65,000 ($18,200) is going to be put toward taxes, and paid to the IRS instead of your lender.
That means that if you maximize your benefit and get the full $65,000 in repayment value, you’ll actually only get $46,800 of your student loans paid off ($65,000 – $18,200).
Still, it’s a lot of money, and it will certainly help you reduce your out of pocket student loan costs.
Other Helpful Student Loan Relief Programs
Remember up above where I mentioned that CLRP isn’t the only loan forgiveness program available to military personnel?
The good news is that while many of you won’t qualify for CLRP benefits, there’s still plenty of other programs that you almost certainly will qualify for, including those listed below.
Let’s take a closer look at the other benefits packages available to service members, including PSLF, National Defense Student Loan Discharges, and the Servicemembers Civil Relief Act.
After we go through these programs, I’ll make sure you’re aware of all the potential debt relief options floating around by giving you details on a variety of other programs created to help everyone, including military and non-military borrowers.
2. The Public Service Loan Forgiveness Programs
PSLF is the single best form of student loan forgiveness for people NOT in the military, but it can also be taken advantage of by military personnel as well, which is an amazing option for those of you who plan on staying in the military, or moving into some kind of Public Service position once you separate.
The key factor in determining if PSLF will work for you is to think about where you’re going to be 10 years from now, because PSLF offers a complete student loan discharge in return for 10 years of full-time, public service work.
To qualify for the PSLF discharge, you have to make 120 full, on-time student loan payments, which means 10 years worth of payments, while simultaneously satisfying the employment requirement of working at least 30 hours per week in a public service position.
What Jobs Qualify for PSLF?
Public service positions include any Government work, meaning being employed by the Federal Government (like Military Personnel are), a State Government, or a local Government position, or working at a Non-Profit(c)(3).
Keep in mind that jobs with the Police, Park Rangers, Firefighters and other similar civil agencies are all technically Government positions, and that since so many ex-military personnel move into these fields, there’s a pretty good chance you may end up qualifying for PSLF even if you do leave the military.
One final eligibility condition for PSLF is that your 120 payments must be made while you’re enrolled in one of the Income Based Student Loan Repayment Plans, which as of this year, means you have to be enrolled in the Pay As You Earn Repayment Plan (PAYE), the REPAYE Student Loan Repayment Plan (REPAYE), the Income-Based Repayment Plan (IBR), or the Income-Contingent Repayment Plan (ICR).
You’ll have to do some research to find out if this program will actually benefit you, because some federal student loans end up being totally repaid by the time they’ve been in active repayment for 10 years, but PSLF is literally the best forgiveness program for the vast majority of Federal student loan borrowers, and especially those who don’t make much money, and who have huge amounts of debt.
If you think there’s a chance that you’ll remain in the military for 10 full years, or that you’ll move into some kind of Government or Non-Profit work, then I would highly advise you check out my Guide to the Public Service Loan Forgiveness Program.
3. The National Defense Student Loan Discharge
If you used a National Defense Student Loan to help pay for the costs of your college education, then you may be able to have those costs partially discharged by taking advantage of this unique program.
Recipients of National Direct Student Loans and Perkins Loans are eligible to receive partial cancellation of their loans (debt forgiveness), for serving in the Armed Forces if (and only if) their military service included at least one full year in a hostile fire or imminent danger pay area.
If you think you might qualify for a National Defense Student Loan Discharge, all you have to do is send a copy of your DD214 discharge form and a letter explaining why you believe you qualify for this program to the company who services your loan.
While success rates for this program haven’t been widely reported, there are definitely some indications that it’s worked for certain individuals, and it is certainly worth pursuing if you meet the stated eligibility requirements.
4. The Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act (SCRA) was passed by President Bush in 2003, and is essentially an addendum to the Soldiers and Sailors Civil Relief Act (SSCRA) originally created in 1940.
These two laws help clarify and define benefits provided to active duty members of the military.
The law provides a variety of benefits, but the most relevant benefit to loan forgiveness is the following tenet:
- A 6% maximum cap on interest rates for any debt obligations that existed before enlisting in the military
How could you use the SCRA benefit to your advantage? If you have student loan debt (or any other debt for that matter) which is being charged an interest rate higher than 6%, and this debt was created before you joined the service, then you may be entitled to have that interest rate reduced (sometimes dramatically).
While this certainly works for student loan debt, it also applies to credit card debt, mortgages, car loans, or other debt that you may have accumulated prior to enlisting in the military.
Unlike interest deferments, the SCRA interest rate reduction actually forgives debt, it doesn’t just delay your payments til a later date.
While you can’t apply this benefit to any debt you accumulated after joining the military, it is a major bonus to those of you who have pre-service debt which is being charged anything over 6% interest.
To receive this benefit, you’ll need to contact whoever is servicing your loan, in writing, provide them with a copy of your orders, and an official request to have your interest rate reduced according to SCRA law.
You’ll only receive a reduced interest rate for as long as you continue to serve in the military, so don’t delay this request another day. You could stand to save tens of thousands of dollars by acting quickly.
Non-Military Federal Student Loan Relief Programs
If you’re still having trouble with Federal student loans even after you’ve taken advantage of the military programs outlined above, then the good news is that there are all sorts of additional financial aid packages available to you.
I’ve developed full Guides on each of the Federal Student Loan Relief Programs currently on offer, which you can find at the links below:
- Federal Student Loan Forgiveness Programs
- Federal Student Loan Consolidation Programs
- Federal Student Loan Deferment Programs
- Federal Student Loan Forbearance Programs
- Federal Student Loan Rehabilitation Programs
These programs weren’t created specifically for military personnel, but they’re available to anyone holding Federal student loan debt, so if your loans were provided by the Federal Government, then you’ll certainly want to see if any of this can help.
Non-Military Federal Student Loan Forgiveness Programs
Remember, your access to the Military College Loan Repayment Program and the Public Service Loan Forgiveness Program should definitely be taken advantage of, but if you don’t qualify for them, or if those programs fail to wipe out the entirety of your Federal debt, then you’ll want to look into some additional Forgiveness options available.
Accordingly, take a look at the Guides I’ve developed for the following benefits packages:
- Nursing Student Loan Forgiveness Programs
- Doctors & Dentists Loan Forgiveness Programs
- The Non-Profit Loan Forgiveness Program
- Teacher Student Loan Forgiveness Programs
- State-Based Student Loan Forgiveness Programs
- The Closed School Student Loan Discharge Program
- The Borrowers Defense to Repayment Discharge Program
It’s almost a certainty that at least one of the Guides above will be able to help you access some kind of Federal forgiveness benefit!
What if My Loans Aren’t in Good Standing?
One thing to keep in mind is that most of the Federal assistance programs outlined above are only available to people with loans in good standing, meaning that you’ve remained in repayment status by making your monthly payments.
If you run into trouble, and end up with loans in Delinquency or Default, or God-forbid, you get slapped with a Wage Garnishment, then you will definitely want to review my Guides on:
Hopefully these will help you get back on track, either into Repayment status, or at least ending the wage garnishment that steals funds directly from your paycheck!
If you don’t think it’ll be possible to get your loans back into good standing, then I would highly recommend you review your options for attempting a Federal bankruptcy discharge, which I’ll outline below.
The Last Resort: A Bankruptcy Discharge
If you feel like you’ve got zero chance of ever getting rid of your loans, then the good news is that there’s still a chance to wipe out your debt via filing for bankruptcy, and qualifying for a Federal Student Loan Bankruptcy Discharge.
This isn’t an easy thing to do, but it certainly is possible, and it’s worth looking into if you have a huge amount of debt, and you make very little money.
Check out my Guide to Federal Student Loan Bankruptcy Discharges for details on how the program works.
Finally, if your students loans aren’t Federal, then nothing I’ve outlined on the page above will help you in any way, but fortunately, there are some options providing financial relief to private student loan borrowers as well, so let’s look at them below.
Private Student Loan Relief Programs
The hardest form of student debt to get rid of is certainly private debt, because there are far fewer avenues available to eliminate it.
Why? Because it isn’t subsidized by the Federal Government, and because Federal regulators have mostly left the industry alone, choosing to let lenders and servicing companies basically run wild with the way that they handle collecting on their outstanding loans.
And that’s created a terrible situation for many borrowers who desperately need Help with Private Student Loans, but on the bright side, there are a few ways to get assistance with private debt, including:
- Private Student Loan Forgiveness Programs
- Private Student Loan Consolidation Programs
- Private Student Loan Bankruptcy Discharges
- Private Student Loan Default Help
Hopefully, by this point, you’ve found some program that offers financial relief, because if you’ve looked through all the Guides I linked to above, and still aren’t able to get some form of assistance, then I would argue that you’re basically out of luck.
Are These Benefits Enough for Military Personnel?
Do you think that the benefits programs for military personnel offer enough to help prevent our country’s service members from being crushed by student loan debt, or are they just the first small step in the right direction?
Have you used any of these programs, and do you have input that you can share with others? If so, please share your experience in the comments section below!
The more people we get working together to talk about the problem of military student loan debt, the more likely Congress is to act by creating new programs and benefits packages that can truly help.
Get More Information
To find out more about how military benefits can save you tens of thousands of dollars in education-related expenses, please visit my Guide to Military Education Benefits.
And finally, don’t be shy to check out the many other links available on my site, because as I’ve already outlined, there’s tons of information here to help people in the same situation as you.
The only way that the Military Student Loan Forgiveness Programs will continue to be offered is if more people find out that they exist, and sign up for them!
Do your part to ensure that we don’t lose access to this important benefit by spreading the word and posting a link to this page on your Facebook or Twitter account.
Thank you for your support, and please come back soon!
Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.