More and more at GetOutOfDebt.org we are getting questions about how to get your student loans eliminated, forgiven, or discharged if you are in or served in the military, police officer, teacher, librarian, or other public service employee.
It is absurdly ironic that members of the military can go into harms way, fight in combat and yet return back home only to struggle trying to escape the invisible bondage of penetrating student loan debt.
We almost need a secondary definition for PTSD. How About Prepare to Suffer Debt?
There are some real options that can help you do this but like the military there are rules to follow and hoops to jump through.
Public Service Loan Forgiveness Program
One overlooked program is the Public Service Loan Forgiveness Program. Under this program members of the military that have been employed by the military or a qualifying public service job for the last ten years may have their federal student loans FULLY discharged.
Public service qualifying occupations include:
- Emergency management,
- Military service,
- Public safety,
- Law enforcement,
- Public interest law services,
- Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten),
- Public service for individuals with disabilities and the elderly,
- Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations),
- Public education,
- Public library services, and
- School library or other school-based services.
You need to be employed in these position at least full-time which is considered to be at least 30 hours a week or what the employer considers to be full-time.
The benefit of this program is it allows you to discharge your debt after it has been consolidated for a low payment. You can use the online student loan consolidation calculator here.
The way the program works is that after making 120 monthly and on-time consolidated and reduced payments you remaining balance will be forgiven. – Source
Not all student loans are eligible for consolidation. Private student loans are excluded. Loans that are eligible to be consolidated can be found here.
Direct Loan payments that qualify include:
- The Income Based Repayment (IBR) Plan;
- The Income Contingent Repayment (ICR) Plan;
- The Standard Repayment Plan, with a 10 year repayment period; and
- Any other Direct Loan repayment plan, but only payments that are at least equal to the
monthly payment amount that would have been paid under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 monthly payments. (February 3, 2010)
And you may actually be able to have zero dollar loan payments count towards your required 120 payments. If you qualify for a zero monthly payment under the Income Based Repayment or Income Contingent Repayment programs then those payments, or lack thereof, will actually count. Pretty cool, huh?
For more information on this program read this publication by the U.S. Department of Education.
National Defense Student Loan Discharge
If you helped to pay for college with a National Defense Student Loan it may be partially discharged.
Recipients of a National Direct Student Loan and Perkins Loan may receive partial cancellation of their loan for their service in the United States Armed Forces if his/her military service was for a full year in a hostile fire/imminent danger pay area.
If you believe that you may qualify for cancellation of your loan(s) due to your military service as described above, you should send a copy of your DD214 (discharge form) and letter of explanation to the agency servicing your loan.
Waiver of Interest
Under the Higher Education Opportunity Act of 2008, active duty military members may be eligible for no accrual of interest on their student loans for up to 60 months.
In addition, in the event that a borrower chooses to obtain a consolidation loan for the purposes of using the no accrual of interest for active duty service members program offered under section 455(o), the Secretary shall offer a Federal Direct Consolidation loan to any such borrower who applies for participation in such program. – Source
Eligible military members include those:
- serving on active duty during a war or other military operation or national emergency
- performing qualifying National Guard duty during a war or other military operation or national emergency
- serving in an area of hostilities in which service qualifies for special pay under section 310 of title 37, United States Code.
Have More Tips and Information?
We want to continue to help and assist members of the military with information on dealing with student loans so please post any tips and information you can to help in the comments section, here.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.