Student Loan Repayment Programs

College student

Are you worried about paying off student loans? With the cost of a college education on the rise, many students and recent college graduates are finding themselves overwhelmed by debt.

Will the Military Pay off Student Loans?

The military offers several programs to help service members pay off their student loans. Two of the most well-known available options include the Student Loan Repayment Program (SLRP), for active duty members who agree to serve in specific roles or occupations; and the Public Service Loan Forgiveness (PSLF) program, for service members who work in qualifying public service positions.

Additionally, some branches of the military offer their own loan repayment programs or incentives to help recruit and retain personnel. These programs may vary depending on the needs of the branch and the specific job roles.

Many people are not aware that the military can offer you special programs for repaying student debt.

As always, check with your recruiter for details and carefully review the eligibility requirements and terms of each program.

Eligibility for Student Loan Repayment Programs

To be eligible for the student loan repayment program, you must:

  • Sign up for an original (first) active-duty enlistment of at least three years with a qualifying specialty, or contract as an officer candidate.
  • If enlisting in the National Guard, you must enlist for at least six years.
  • Have a qualifying ASVAB score.
  • Have a student loan that is not in default. The loan must have been made prior to entry on active duty.

Only certain loans qualify. Currently, this includes:

  • Stafford Student Loans (GSLs)
  • Perkins Loans
  • Federally Insured Student Loans (FISL)
  • Supplemental Loans for Students (SLS)
  • Parents Loans for Undergraduate Students (PLUS)
  • Consolidated Loan Program loans

How Much of My Student Loan Will the Military Repay?

Currently, the Army and Navy will repay up to $65,000 of your student loans, and the Coast Guard will repay up to $30,000 with yearly limits.

The National Guard’s general repayment amount is up to $50,000, but as with any program, benefits can fluctuate based on funding issues. For example, in July 2023, the Army National Guard ceased payments to soldiers for student loan debt within the Student Loan Repayment Program, or SLRP.

Remember that the amounts given are maximum amounts and may be limited to specific military specialties.

After each completed year of active duty, your service branch will make a payment of 1/3 or $1,500 (whichever is greater) on the total remaining original unpaid principal balance. They make the payment directly to the loan servicer.

Payments are subject to taxes in the year it is paid. DFAS will send you a W-2 Form separate from the W-2 Form received for military pay. A percentage of the payment will be withheld; therefore, it is important that you file income taxes with this W-2. Since payments are considered income, this withholding will deter a large tax bill at the end of the year. In general you will receive a refund from the IRS.

Example: $2,500 would be withheld from $10,000. Potentially, you could get all the money back from the IRS and use the refund to make a payment on your student loans.

Student Loan Repayment and The GI Bill

The current regulations say you cannot get the GI Bill if you sign up for the Student Loan Repayment Program. If you signed up for a three-year contract to qualify for Student Loan Repayment, you will have to reenlist for at least three more years to be eligible for the GI Bill.

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