How to Use the Military College Loan Repayment Program for Student Loan Forgiveness
In 2019, the Military College Loan Repayment Program (referred to as “CLRP”) remains the single-best Federal Student Loan Forgiveness Program available to anyone, anywhere.
It’s also by far the most powerful Military Student Loan Forgiveness Program in existence, and the only widely available military benefit that helps get rid of existing student loans.
The Military College Loan Repayment Program comes in several iterations, with each service branch offering their own specific benefits, but the reason I think this is such an important benefit is that CLRP benefits may allow you to pay off up to $65,000 in student loans.
But keep in mind that all of this could evaporate over night if President Trump’s Student Loan Reforms change the way the system works, and that if you’re still sitting on the fence over whether or not to use these benefits, it’s time to get moving, because you’ll want to be grandfathered into them if his plan wipes them out for future military personnel.
Are Military CLRP Benefits Worth the Hassle?
Simply put, yes. CLRP is one of the most effective ways to get your student loan debt forgiven, since the program offers up to $65,000 of repayments on any student loans that were taken out before joining (or reenlisting).
This program is only eligible for enlistees who have no previous military service (unless you join the Army or Navy reserves after serving in active duty), or for those who reenlist, and just like any other enlistment incentive, your participation in the program must be stated on your enlistment contract or you will not be able to receive CLRP benefits.
Before you decide to enlist, or re-up, it’s important to note that not everyone qualifies for CLRP, and that not all loans qualify for CLRP either, so please make sure to read through the entirety of this post before deciding that CLRP will work for you.
I’ll detail exactly what it is, how it works for each branch, and how you can maximize the benefit to destroy your student loan debt as quickly as possible.
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CLRP Benefits by Military Branch
Each branch of the military offers a different amount of money via their College Loan Repayment Program, so if you are enlisting specifically for the student loan relief, it’s important to review which branches give the most financial assistance.
And while you may think that all of the branches offer a similar amount, you’d be entirely wrong, because there’s a massive difference in what you’ll get for enlisting in the Army, vs. what you’ll get form the Air Force.
If you’re thinking of joining the Marines for help with student loans, then think again, because they don’t seem to care too much about getting college graduates to join up.
Think closely about your decision to enlist, and review the following details for how much each branch will offer you in assistance, because picking the wrong service could lead to losing tens of thousands of dollars in CLRP benefits.
The Army Student Loan Repayment Program (LRP)
The Army Student Loan Repayment Program benefits cap out at $65,000 in total loan forgiveness.
Army LRP loan repayments are issued for up to 33.33% of the outstanding principal balance of the Soldier’s student loans paid annually, or $1,500, whichever is greater, after their first year of service has been completed.
Army Reserves members are not eligible for as much repayment in some cases, with only 15% of the outstanding balance being eligible for annual repayments, though the limit of $1,500 is still in place, so for those members with smaller loans, the benefit is virtually the same.
The Navy Student Loan Repayment Program (LRP)
The Navy Student Loan Repayment Program benefits cap out at $65,000 in total loan forgiveness, and it’s available to all active duty enlisted personnel.
Qualifying for this program requires signing up to serve at least four years, but it may be a better option to join for 6 (as I’ll detail below), because doing only 4 means that you can get CLRP, but that you won’t be able to take advantage of the Post 9/11 GI Bill, and that means sacrificing tens of thousands of dollars in financial assistance.
Navy Reserves members are only eligible for up to $10,000 in total repayments, however, and they must also agree to serve for a significantly longer period of time, with the minimum service agreement being at least six years.
The National Guard Student Loan Repayment Program (SLRP)
The National Guard’s Loan Repayment Program benefits cap out at $50,000 in total loan forgiveness, but eligibility is a bit more stringent than that offered by the other military branches, as enlistees must enroll with eligible jobs and a six or eight year initial enlistment agreement.
National Guard SLRP is also available to current members of the Guard who extend their enlistment contract for at least six years, meet eligibility requirements, and score high enough on the Armed Forces Qualifying Test.
The Air Force College Loan Repayment Program (CLRP)
The Air Force College Loan Repayment Program benefits cap out at just $10,000 in total loan forgiveness, and benefits are also capped annually at 33.33% or $1,500 (whichever is greater) for eligible student loans.
Once Airmen have received $10,000 in total loan repayments, their eligibility for continued CLRP forgiveness evaporates, which is extremely unfortunate considering that the Navy and Army provide so much additional assistance.
Think long and hard about joining the Air Force if your main goal from enlisting is to get student loan debt forgiven, because the other branches provide a better deal in this regard.
The Marines College Loan Repayment Program for Officers
For one reason or another, the Marines do not participate in the traditional CLRP programs like the other branches of the military.
Views about why they don’t participate differ, but the Marines did recently make a bit of an about face by providing some re-enlistment CLRP-like incentives for officers who re-up with the Corps.
In 2007, the Marine Corps launched a pilot program to provide up to $30,000 of student loan debt for officers who agree to serve an extra 6 months (in addition to their new enlistment contracts), but this program expired in 2011, and I haven’t heard any stirrings of it ever coming back.
For whatever reason, the Marines just don’t seem all that motivated to send their personnel to school, or help them pay for previous schooling.
The Coast Guard Loan Repayment Program
The Coast Guard provides up to $30,000 in total loan forgiveness, with a maximum of $10,000 provided each year, and a minimum service contract of 3 years to become eligible for benefits.
However, anyone who has received benefits under their repayment program and then is either discharged from the service or who enlists in a different branch of the military will be forced to repay the Federal Government any money that it provided to cover the costs of their student loans.
Which is a big deal, because you could end up with a massive bill if they pay off some of your loans, but you don’t fulfill your side of the service commitment. Be careful about signing up for the benefit, then leaving early, because you’ll really regret the repercussions.
Which Student Loans Qualify for CLRP?
Not all student loan debt is eligible to be forgiven via the Military’s CLRP program, and the first major qualification requirement is that only Federal loans will be forgiven with this benefit. If you’ve got Private student loan debt, then you’ll want to look elsewhere for assistance.
Consider calling the Private Student Loan Relief Helpline (at PHONE NUMBER), or visiting my pages on Private Student Loan Relief, Private Student Loan Forgiveness Benefits, Private Student Loan Bankruptcy Discharges, and Private Student Loan Default Help for details on how to tackle private loans.
Now, assuming you do have a Federal student loan (or loans), here’s a list of the Federal loans that qualify for participation in CLRP.
CLRP Program Qualifying Loans Include:
- Stafford Student Loans – AKA Guaranteed Student Loans (GSLs)
- Auxiliary Loan Assistance for Students (ALAS)
- Consolidated Loan Program loans – Forgiveness only covers the related education expenses, not other costs)
- Parents Loans for Undergraduate Students (PLUS) – Unfortunately, these must be incurred for the use of the individual contracted to the program, and forgiveness programs cannot be used for military dependents (like spouses or children)
- Federally Insured Student Loans (FISLs)
- Supplemental Loans for Students (SLSs)
- Perkins Loans – AKA National Direct Student Loans (NDSLs)
Which Loans Are NOT Eligible for CLRP?
To qualify for this program, your student loan debt must be via one of the loans included on the list above, which are all loans covered under the Higher Education Act of 1965, Title IV, Part B, D, and E.
Any loan not listed above will not be eligible for CLRP forgiveness benefits, which means that loans like private loans, state-funded loans, equity-loans and institution loans are not eligible for CLRP benefits.
To find out if your student loans qualify for participation in CLRP, please visit the National Council of Higher Education Loan Programs page and download Title IV of the Higher Education Act of 1965 to see if your loan is listed there.
One other thing to consider – any student loans that are in default also are not eligible for CLRP benefits, according to Army Regulation (AR) 621-1 and 621-202, so if you’ve already defaulted on your loans, then you’ll need to look elsewhere for financial assistance.
Who is Eligible to receive CLRP Benefits?
In addition to the loan type restrictions for CLRP, there are also restrictions on what service members are eligible to receive the benefit.
Unfortunately, just joining the military doesn’t provide automatic access to the College Loan Repayment Program, as you’ll have to be joining for the first time, extending your service contract for a set period of time, or joining the Reserves after having served in an Active Duty role, and you’ll also need to meet the eligibility requirements listed below:
CLRP Program Eligibility Criteria:
- Those joining the military on active duty and choosing to enroll in CLRP must have no prior military experience.
- Those joining (or reenlisting) in the Air Force or the Navy on active duty must agree to enlist for at least four years of service.
- Those joining (or reenlisting) in the Army on active duty must agree to enlist for at least three years of service.
- Those joining (or reenlisting) in the Army and Navy reserves, and for the Army and Air National Guard must enlist for at least six years of service.
- For members of the Army (active duty, reserves, etc.), you must have a high school diploma (GEDs and equivalencies will not count for this program) and you must have received an overall score of at least 50 on the Armed Forces Vocational Aptitude Battery (ASVAB).
- For members of the Army on active duty, the Army Reserves, the Army National Guard and the Air National Guard, you must enlist (or reenlist) in a shortage military occupational specialty (MOS) or air force specialty code (AFSC) that qualifies for the loan forgiveness and repayment program. Please note that eligible MOS’s and AFSC’s change day-by-day, so make sure to speak with your local Recruiter to be certain that your chosen MOS/AFSC will be eligible for CLRP student loan forgiveness benefits.
- For members of the Army Reserves, the Army National Guard or the Air National Guard, the maximum amount that you can have discharged varies depending on your MOS/AFSC, and on the unit that you’re assigned to. Ask your recruiter for specific information regarding these limits.
- For members of the Army and Navy Reserves, prior service within the military will not disqualify you for participating in the CLRP forgiveness program.
- Your participation in the College Loan Repayment Program (CLRP) must be annotated on your enlistment (or reenlistment) contract. DO NOT DISREGARD THIS! Do not trust any Recruiter who won’t specifically include it on your enlistment (or reenlistment) contract, because if they fail to include this line, you will not be eligible for any CLRP benefits. To satisfy this eligibility requirement, you will need to have your loans consolidated and have the promissory notes sent to your Recruiter before finalizing your enlistment contract.
Now, the good news is that if you do meet all the eligibility conditions above, you should be able to claim CLRP benefits, and you’ll be all set to receive tens of thousands of dollars in student loan forgiveness.
How Are CLRP Benefits Issued?
CLRP loan forgiveness payments don’t actually come to you directly, but are instead issued in your name to your lender. Basically, instead of getting a check (or cash or a direct deposit), the Federal Government issues the funds to whoever services your student loans.
The way it works is that after you enlist, and have CLRP written into your service contract, your lender will start receiving their payments directly from the Federal Government after you complete each year of service stipulated in the contract.
But keep in mind that before your first forgiveness payment is sent out, you must also have completed all of your initial entry training, including both basic training and your specific MOS/AFSC (job) training. Until this is accomplished, your lender won’t get paid, and you’ll basically not be receiving any CLRP.
How Much of my Debt Will CLRP Repay?
CLRP benefits forgive different amounts of debt, depending on whether you are an active duty servicemember, or a member of the reserves, but also depending on which branch of the military you join.
Here is the specific breakdown for how much of your debt will be forgiven each year, based on your service commitment:
CLRP for Active Duty Members
Active duty members will have 33.33% of the outstanding balance of their loan (or $1,500, whichever is greater) forgiven annually, for each year that they continue to serve in the military.
If you leave the military at any time, or even if your MOS/AFSC changes to a role that is no longer eligible for CLRP benefits, then you will lose all access to these benefits.
I recommend that you plan on closely monitoring changes to the CLRP program to ensure that you continue to remain eligible for these benefits, especially if losing them will lead you to face a financial disaster.
Along those lines, it’s a good idea to bookmark this page and return to it regularly, as I update it whenever new changes are announced.
CLRP for Reserves Members
Members of the Army and Navy Reserves will have 15% of the outstanding balance of their loan (or $1,500, whichever is greater) forgiven annually, for each year that they continue to serve in the military.
The Air National Guard offers significantly better CLRP program benefits, with 15% of the outsanding balance (or up to $5,000, whichever is greater) forgiven annually after the first year of service.
If you have significant student loan debt, and your plan to get out from under it is to join the military, then make sure to take a good long look at the Air National Guard’s forgiveness program. $5,000 of loan forgiveness each year is a substantial benefit to joining up.
Will I have to Pay Taxes on CLRP Benefits?
Unfortunately, CLRP benefits are defined by the IRS as taxable income, so even though the money is never sent to you, it will add to your annual tax liability.
Fortunately, instead of taxing you on your CLRP benefits at the end of the year, 28% of each of the forgiveness payments sent to your lender will be withheld by the Federal Government and sent to the IRS directly.
That means that you won’t actually have to pay for these taxes out of pocket, you’ll just have to notate them on your IRS paperwork when you file for taxes.
Once your participation in the CLRP program begins, the military will issue you a separate W-2 statement each year that includes a line containing your CLRP benefits. You’ll need to save this W-2 and use it when filing your taxes with the IRS.
Can I Use CLRP And Post 9/11 GI Bill Benefits?
Unfortunately, Congress did not make it possible to collect CLRP benefits alongside those that you would receive from the Post 9/11 GI Bill (unless you agree to sign up for a longer service agreement).
To try and entice people joining the military to enroll for longer periods of time, you cannot be eligible for both CLRP benefits and the Post 9/11 GI Bill with the minimum enlistment period (4 years).
Instead, the only way to begin building eligibility for both the CLRP program and the new GI Bill benefits is to enroll in a service contract of at least 6 years.
According to this forum post on Military.com, if you sign up for a 6 year enlistment, the first 3 years will count toward your CLRP benefits, and the last 3 years will make you eligible for the Post 9/11 GI Bill.
I’ve verified that this works over the years with responses from service personnel, so I’m quite comfortable in recommending the 6 year enlistment process as your best option for attacking your student loans and wiping them out as quickly as possible.
However, I would make sure to discuss this with your recruiter, and get it all included in writing on your service contract. It should specifically state that you’re eligible for BOTH the College Loan Repayment Program AND the Post 9/11 GI Bill, otherwise you may get screwed out of the benefits down the line.
Make absolutely certain that you get everything from your Recruiter in writing before signing your contract, as word of mouth will not hold up in any kind of disagreement that results later on when you attempt to actually claim and use your benefits.
Do CLRP Payments Cover Interest on My Student Loans?
Unfortunately, another limitation of CLRP benefits is that they will not pay for the interest you’ve accrued on your student loans.
Instead, CLRP will only provide you with repayments based on a calculation that includes the unpaid principal balance of your loans.
From various forum conversations around the web, it appears that there is significant confusion regarding whether or not CLRP pays for interest, and how that affects those enrolled in the program.
It is clear, however, from reviewing it’s official description, that “The College Loan Repayment Program only pays on the unpaid principal balance. It does not pay for any interest accrued.”
One way to prevent this lack of coverage from significantly increasing the long-term cost of your loan is to request that your lending institution defer payments on your student loan while you’re serving on active duty (obviously this only works if you are, in fact, serving on active duty).
If your student loan is exempt from incurring interest charges while it’s being deferred (which Stafford Loans and Federal Perkins Loans are), and you’re able to get your lender to defer payments, then you won’t face an interest build up for as long as you can retain that status, even while your CLRP benefits are paying off the principal of your loan.
Before you request deferment to reduce your interest liability, make sure to speak to your lender to find out whether or not your loan qualifies for deferment in the first place, and whether or not that would prevent you from accruing additional interest on the loan.
Additional Eligibility Rules for Continued Participation
To remain eligible for the CLRP program after your lender receives their first loan forgiveness payment, you’ll need to maintain the following responsibilities:
- You will have to remain on enlisted active duty while you are enrolled in the program (if you began it while enlisted and on active duty).
- You will have to keep your CLRP eligible loans in good standing (if they go into default or if you have delinquent payments, this will ruin your eligibility and prevent you from receiving further benefits).
- You must continue to pay all loan fees (anything other than the original principal balance) and all interest accrued by your loan, although you might be able to avoid that interest by choosing to defer your loan payments (as outlined above).
Failing to satisfy any of the requirements above can and most likely would result in losing the benefits, so be careful about this when you start getting the benefit.
For Additional Information
Save yourself tens of thousands of dollars on future education expenses by viewing my Guide to Military Education Benefits.
This Guide will teach you all about the Post 9/11 GI Bill, the Yellow Ribbon Program, Basic Allowance for Housing, Military Tuition Assistance Programs, and even Military Spouse Benefits (which are exceptional!).
If this page helped you to better understand the Military College Loan Repayment Programs, then please considering helping me out by spreading the word that it exists.
Post it to Facebook, Twitter, Google+, or anywhere else that you think it makes sense to share, and help me make more people aware of CLRP benefits!
Thank you for visiting, and thank you so much for your support. I really do appreciate it.
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.