Whether you are seeking to return to school or focusing on paying off your loans, there are several programs in place to help military members and their families cover the cost of higher education. Here’s an overview of the student loan related benefits available for both federal and private student loans.
Benefits for Military Members
Service Members Civil Relief ACT (SCRA) Interest Rate Cap: While serving on active duty, any student loan you received prior to your military service is capped at 6% interest. This benefit is proactively checked by your student loan servicer but you need to submit a copy of your military orders if they indicate a different start date than reflected in the database. It’s still a good idea to contact your loan servicer to make sure they proactively check this benefit. Through refinancing, most of our loans will be below 6%.
Military Service Deferment: This program lets you postpone federal loan repayment while on and immediately following active duty. While private loans may not offer this benefit, it is available on many federal loans. Remember, even if you can defer your payments for a period of time, you still have to pay the loan back.
Veterans Total and Permanent Disability Discharge: Members who are totally and permanently disabled may qualify for loan discharge on federal loans. This is a benefit no one hopes to receive, but it is available if needed for most federal loans.
Military Lending Act: Set to take place in October, this new benefit caps interest rates at 36% – but don’t worry! Once you refinance, your interest rate won’t get anywhere near that number. Our borrowers lower their interest rate by an average of 2% when refinancing.
GI Bill: Military members qualify for a benefit up to the cost of undergrad tuition and fees at the most expensive in-state university. This benefit is paid directly to the school.
Some benefits are only eligible for federal loans, so make sure you have an understanding of what you qualify for before refinancing your federal loans. Contact your servicer if you are unsure. Private loans do not have many of these built-in programs, so you should be safe to refinance without risking the loss of unforeseen features.
Benefits for Military Family Members
If you are an immediate family member of someone serving in the military, you qualify for several benefits to pursue or repay higher education costs.
Post 9/11 GI Bill Dependent Benefits – This is an excellent program for family members of the Armed Forces, allowing a transfer of any unused credits for education costs to your spouse or children. You must request the transfer while still a member of the Armed Forces. There are several requirements for this benefit; view them here.
Dependents Education Assistance Program – This benefit is for children 18 to 26 with a family service member who was killed in action, became permanently and totally disabled, is MIA or captured. This is another benefit that no one wants to qualify for, but 45 months of education and training benefits are available for those who are eligible.
Military Spouse Career Advancement Accounts (MyCAA) – up to $4,000 for military spouses pursuing a college degree or licensing and credential programs. The skills or degree earned must be one that can transfer in order to follow a military spouse within the US or overseas, or be a “portable” career.
When refinancing, it’s important to weigh your options and find what works best for your unique situation. If you don’t qualify for federal benefits, refinancing is a great way to save on interest cost and get out of debt faster. See what you can save by using our Find My Rate tool.