Can My Military Service Student Loans be Forgiven?

Question:

Dear Steve,

I have been in the military for 12 years and I acquired some student loans while in, is there any way that they can be forgiven?

Mike

Answer:

Dear Mike,

On paper, some loans for public service or military members should be eligible for forgiveness under the Public Service Loan Forgiveness program.

This only applies to federal student loans and even then, only a certain type of loan.

Eligible Loans

Only Direct Loans are eligible for PSLF. If you borrowed before July 1, 2010, some or all of your loans may have been made under an older federal student loan program called the Federal Family Education Loan (FFEL) Program.

If you have both Direct Loans and other types of federal student loans that you want to consolidate to take advantage of PSLF, it’s important to understand that if you consolidate your existing Direct Loans with the other loans, you will lose credit for any qualifying PSLF payments you made on your Direct Loans before they were consolidated. In this situation, you may want to leave your existing Direct Loans out of the consolidation and consolidate only your other federal student loans.

While you should be eligible for tax-free loan forgiveness in that program after 120 qualifying payments, the program is a total wreck and the Department of Education is denying loans for forgiveness at an alarming rate.

I’m not sure what branch of the military you are in but both the Army, Air Force, Coast Guard, and Navy have student loan repayment programs with some strict qualifications.

There are some other service dependant programs that seem to be unfunded at the moment.

I would check with whoever you talk to in the service regarding military benefits and see what tuition reduction programs may be available. While they might not forgive your loans, they could help reduce them.

Steve Rhode Debt Coach and Author

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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