The US Department of Education has automatically waived federal student loan interest for more than 47,000 current and former military personnel on active duty. according to press release dated August 20… In the past, eligible employees had to apply for interest waiver, with the result that only a small fraction took advantage of this benefit.
The brave men and women in military uniform serving our country can now focus on getting their jobs done and returning home safely, rather than completing additional paperwork to gain access to their hard-earned benefits.
Eligible military personnel who have been deployed to areas of imminent danger are not eligible for interest on certain federal student loans issued on or after October 1, 2008 under the Higher Education Act. The final step by the Ministry of Education will automatically process eligibility for benefits and retroactively waive interest on these loans.
Not all veterans and active military personnel are eligible for interest waiver. If you are looking for other ways to save on student loan interest, consider alternatives such as federal forgiveness programs and refinancing student loans.
You can compare student loan refinancing rates from multiple private lenders without affecting your credit rating on Credible.
What to do if you are not eligible for the military interest exemption
Student loan borrowers who serve in the U.S. Army are eligible for unique student loan benefitsfor example, the 6% interest rate cap under the Civilian Aid to the Armed Forces Act (SCRA) and even help with the repayment of student loans through the Department of Defense (DOD).
Veterans and military personnel on active duty who cannot keep up with their federal student loan payments are eligible for military service deferral and income-based repayment plans. But the benefits don’t end there. Here are some ways for military personnel to save on student loan debt:
- Apply for Government Service Loan Forgiveness program (PSLF). Student loan borrowers who are hired by a federal agency, including military personnel, may be eligible to repay their federal student loan debt after making 120 qualifying student loan payments. However, eligibility for PSLF is tricky; According to the latest data, 98% of PSLF applications are rejected.
- See if you are eligible for a full and permanent disability discharge (TPD). About 323,000 Americans are eligible for a TPD discharge. By the end of 2021, the Biden administration will automatically pay off federal student loan debt borrowers with disabilities, which can be identified through the Department of Veterans Affairs.
- Refinance to lower your student loan interest rate. Refinancing private student loans can help you get out of debt faster and lower your monthly payments. Student loan refinancing rates are close to historic lows, which means now is a good time to pay off college debt at a lower rate.
It is not advisable to refinance federal student loans, especially if you are hoping to take advantage of military benefits. Converting your federal student loans to private student loans will strip you of your eligibility for certain deferral and forgiveness measures.
You can look for student loan refinancing offers free on Credible to see if this option is right for your financial situation.
Is student loan refinancing right for you?
Refinancing private student loans can help you lower monthly payments, pay off college debt faster, and save money over the term of the loan. Borrowers who refinanced short term student loans on Credible saved nearly $ 17,000 in interest and cut their repayment schedule by years, while those who refinanced for a longer period were able to cut their monthly payments by more than $ 250 on average…
But refinancing a student loan is not recommended for all borrowers. For example, refinancing your federal student loans into a private student loan will strip you of your eligibility for federal protections such as administrative leniency and student loan forgiveness programs.
If you have a private student loan in arrears, it is worth considering refinancing while interest rates are close to record lows. Refinancing at a lower rate can help you save money over time and make your college debt more manageable.
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