47K veterans and active duty troops will automatically receive student loan relief – are you eligible?
The US Department of Education has automatically waived interest on federal student loans for more than 47,000 active-duty military personnel, current and former, according to an August 20 press release. Previously, eligible military personnel had to claim interest relief, resulting in only a small proportion taking advantage of this benefit.
The brave men and women in uniform serving our country can now focus on their jobs and return home safely, without filling out more paperwork to access their hard-earned benefits.
Eligible military personnel who have been deployed to areas of imminent danger are not entitled to any interest on certain federal student loans paid as of October 1, 2008, under the Higher Education Act. The latest decision from the Department of Education automatically addresses eligibility for benefits and retroactively waives interest on these loans.
Not all veterans and active duty members will be eligible for this interest waiver. If you’re looking for other ways to save money on student loan interest, consider alternatives such as federal forgiveness programs and student loan refinancing.
You can compare the student loan refinance rates of several private lenders without affecting your credit score on Credible.
ANOTHER STUDENT LOANS DEPARTMENT TERMINATES A FEDERAL CONTRACT – ARE YOU IMPACT?
What to do if you do not qualify for the military interest exemption
Student loan borrowers who serve in the U.S. military are eligible for unique benefits for student loans, such as a 6% interest rate cap under the Servicemembers Civil Relief Act (SCRA) and even student loan repayment assistance through the Department of Defense (DOD).
Veterans and active-duty military service members who cannot meet 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 the military can save money on student loan debt:
- Apply for the Public service loan remission program (PSLF). Student loan borrowers who are employed by a federal agency – including military personnel – may be eligible for cancellation of their federal student loan debt after making 120 eligible student loan payments. However, eligibility for the PSLF is complicated; 98% of PSLF applications are refused, according to the most recent data.
- Find out if you are eligible for a total and permanent disability (TPD) release. Approximately 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 for borrowers with disabilities identifiable by the Department of Veterans Affairs.
- Refinance to reduce the interest rate on your student loan. Refinancing your private student loans can help you get out of debt faster and lower your monthly payments. Student loan refinancing rates are near historic lows, which may mean now is the time to pay off your college debt at a lower rate.
It is not recommended that you refinance your federal student loans, especially if you are hoping to take advantage of the military benefits. Switching from your federal student loans to private student loans would make you ineligible for certain deferral and forgiveness measures.
You can search for free student loan refinance offers on Credible to see if this option is right for your financial situation.
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Is Student Loan Refinancing Right For You?
Refinancing your private student loans can help you lower your monthly payments, pay off college debt faster, and save money over the life of the loan. Borrowers who refinanced shorter term student loans on Credible saved nearly $ 17,000 in interest and saved years on their repayment schedule, while those who refinanced longer term were able to reduce their monthly payments by over $ 250 on average.
But refinancing student loans is not advisable for all borrowers. For example, refinancing your federal student loans into a private student loan would make you ineligible for federal protections such as forbearance and student loan forgiveness programs.
If you have private student loan debt, it’s worth considering refinancing when interest rates are near their all-time low. Refinancing at a lower rate can help save you money over time and make your college debt more manageable.
Use a student loan calculator to see if refinancing is right for you. You can estimate the interest rate on your new student loan on Credible without negatively impacting credit.
PRIVATE STUDENT LOANS ARE NOT IMPACTED BY SUSPENSION OF PAYMENT OF CORONAVIRUS AID
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