Will The Military Pay Off Your Student Loans?Updated: November 4, 2020
There are many incentive programs designed to encourage people to join the United States military. Some of those programs involve enlistment bonuses, others involve allowing new recruits to enter the military at a slightly higher rank than they otherwise would (which can affect certain pay and allowance issues) and others may be related to the new recruit’s student loans.
Where student loans are concerned, military people have more than one avenue to pay off or pay down their student loans thanks to being in the Army, Navy, Air Force, Marine Corps or Coast Guard.
The previously mentioned enlistment bonuses can help there though they are not directly associated with student loans. They are worth mentioning here because with a large enough bonus, the new recruit may find their ability to reduce student loan debt substantially increased.
The U.S. Navy alone offers enlistment bonuses in categories including (but not limited to) the following which is current at the time of this writing but is subject to change depending on mission requirements:
- Advanced Electronics Computer Field (AECF-AEF) — $10,000
- Air Rescue Swimmer (AIRR-ATF) — $36,000
- Avionics Aviation (AV-SG) — $10,000
- Cryptologic Technician Interpretive (CTI-ATF) — $25,000
- Cryptologic Technician Networks (CTN-ATF) — $10,000
- Explosive Ordnance (EOD-ATF) — $36,000
- Hospital Corpsman (HM-ATF) — $25,000
- Navy Diver (ND-ATF) — $36,000
- Nuclear Field (NF) — $38,000
- Special Warfare Boat Operator (SB-ATF) — $36,000
- Sub Electronics Computer Field (SECF-5YO) — $10,000
- Special Warfare Operator (SO-ATF) — $36,000
Not all military career fields offer enlistment or reenlistment bonuses, but as you can see from this list of Navy jobs, there is a real incentive to consider military service if your loan balances are high.
But none of this addresses the more direct question of whether or not the military will pay off your student loan debts.
Will The Military Pay Off Your Student Loans?
Military student loan repayment, forgiveness, or assistance programs vary depending on the branch of service and may be subject to change depending on Congress, program start and end dates, and other variables.
What follows is current at the time of this writing but you will need to check with the Education Office, Personnel Center, or other appropriate agency depending on your branch of service to see what is being currently offered.
The United States Army offers the Loan Repayment Program (LRP) for service members who sign up as new recruits (and not prior-service military) for three years or more into active duty. Some other requirements of the Army’s LRP include (but are not limited to):
- The soldier must have Loan Repayment Program guaranteed in writing in the enlistment contract;
- The soldier must have a high school diploma;
- A score of 50 or higher on the Armed Services Vocational Aptitude Battery is required;
- The new recruit is required to enlist in one of the critical MOSs that qualifies for the program (Local Army recruiters have the list and is updated quarterly).
Under this program the soldier is required to disenroll from the GI Bill, which is a very important factor to consider when exploring options under LRP, which is intended only for student loans “made, insured, or guaranteed prior to entry on active duty” and the student loans must meet certain qualifying criteria that include but may not be limited to the following:
- Any loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965;
- Any loan made under part D of such title (the William D. Ford Federal Direct Loan Program);
- Any loan made under part E of such title;
- Any loan incurred for educational purposes “made by a lender that is – (i) an agency or instrumentality of a State; (ii) a financial or credit institution (including an insurance company) that is subject to examination and supervision by an agency of the United States or any State; (iii) from a pension fund or a non-profit private entity.”
Other branches of the military have, in recent years, suspended or modified their student loan repayment programs. Some go away for a time and come back again, others may be limited, reduced, or otherwise restricted to certain career fields, enlistment types, or other variables.
Depending on the nature of your military service and the branch you signed up with, you may (or may have in the past) been eligible for as much as $65 thousand in student loan payoff funds. You may also be required to be on active duty in order to continue in such a program; be sure to ask how to proceed at or near reenlistment time.
But such programs are commonly in flux from year to year – publishing a comprehensive guide to military options for student loan repayment from the military itself is nearly impossible due to the frequently shifting nature of these programs.
One common factor persists, though; when you research your options for military student loan forgiveness, you will find many of these programs will require a withdrawal from the GI Bill program and require the enlistee to claim these benefits when entering the military or within a certain time frame after starting duty.
And there’s another factor in common; the policy of not “assuming” the recruit’s student loan, as in taking financial responsibility for it. The borrower is fully responsible at all times for the student loan, it’s payment, and eventual (or early) payoff of the note. The military will not accept responsibility for the student loan.
Student Loan Payoff Versus Student Loan Forbearance Or Forgiveness
One thing the military does not do is to issue student loan forbearance or forgiveness – only the lender can opt to forgive the loan or issue a forbearance. Those who need such assistance must contact the lender directly to apply for any available options to get the loan forgiven, have payments delayed until a later date, or renegotiate the loan.
It is also crucial to know the difference between student loan forbearance, student loan deferment, and forgiveness. Depending on the nature of your agreement with the lender or the rules of the program you want to use, you may or may not be responsible for paying interest on the loan during the period of forbearance or deferment.
One crucial factor to remember when considering any student loan payoff program, loan forbearance, loan forgiveness, etc.? You may be required to be current or bring the account into current status in order to be offered a full range of options. If your loan is delinquent, you may be required to enter into a satisfactory payment program in order to have other options made available to you.
Always discuss your circumstances with the lender in any case – if you are thinking of taking advantage of a loan repayment program or any other student loan program that can offer you a benefit, make sure your accounts are current and that you don’t need to address a problem with late or missed payments.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News