Military College Loan Repayment (CLRP)

It is not a simple bargain to put your life on the line to serve your country. That’s why the military comes with programs with numerous benefits that make serving more appealing. One of the advantages is the military college loan repayment benefit. It serves as an opportunity to inspire service members to enlist in the military. It’s a pretty good idea if the benefit programs can help you pay for your cost of education, which can be quite high. Don’t you think so?

Are you familiar with the primary benefits that come with the GI Bill? Do you know how it is possible to get most of your college education paid if only you’ll enlist in the military? But the military provides various other opportunities for students currently enrolled and students who are hoping to get into college as well.

In this guide, we will have a detailed look at the military college loan repayment, which means students who have already enrolled in college and have amassed huge college debt and are searching for assistance to pay off their student loan debt. The information in this guide is for federal student loans, excluding private student loans. The private banks issue private student loans, and the government has no authorization to discharge student loan debts.

So then, let’s get into it.

Military College Loan Repayment (CLRP) Program

The military college loan repayment is one of the best student loan forgiveness available to service members today. It’s also one of the most beneficial military loan forgiveness programs. The CLRP is the only possible program that helps service members, such as you, to pay off their student loan debt.

Numerous iterations come with the college loan repayment program. And each of them comes with their unique benefits. The CLRP benefits help you to clear off a maximum of $65,000 of loan debt.

However, you have to remember that the CLRP benefits could end abruptly due to President Trump’s projected budget for 2020. The proposed budget could change how the repayment program works, so if you still haven’t taken advantage of the program, it’s better to do so now.

Is The Military College Loan Repayment Benefit Worth It?

Simple answer, yes. The CLRP is an effective way to get rid of your loan debt. The program provides a maximum of $65,000 to help repay any student loan you contracted prior to joining the military. You can qualify for the program if you’ve not enlisted for military service before. However, you are eligible if you join the Navy and Army reserves after you’ve served in active service. Another way to qualify is if you reenlist in the military. But you must state in the enlistment contract that you’ve rejoined the Army; otherwise, you’ll not receive your CLRP benefits.  

Remember everyone does not qualify for the college loan repayment program, and also not every loan is eligible for the military CLRP benefit. So, go through the entire guide to help you decide which CLRP works for you.

Military College Loan Repayment According To Branches

Every military branch offers different CLRP benefits. So in deciding where to enlist in military service, it is essential to know which military branch will give you what you need to pay off your student loans. Don’t assume that all the military benefits are the same. What you’ll receive in the Coast Guard is different from the Army Reserve or National Guard.

For example, if you’re planning to enlist in the Marines to pay off your student loans, you may need to rethink your decision because the Marines don’t offer any CLRP benefits. Take the time to go through the following branches in the military before choosing. The reason is simple: if you select the wrong militarily, you could end up losing a lot of money in military college loan repayment.  

Army Student Loan Repayment Program

The army student loan repayment gives up to $65,000 in overall loans in the benefits program. Active duty service members must accept to enlist in the Army for a minimum of three years. If you complete your first year of active service, you’ll get a 33.33% in your remaining principal loan balance. In other words, you get $1,500 in your first year of active service to clear off your loan debt. You will get your payment for each of the next two years until you reach the amount limit.

Army Reserves can receive a maximum of $20,000 in loan debt repayment. But you must enroll in the Army for a minimum of six years. After the first year, you will receive 15% of your remaining loan balance annually or $1,500 until you get to the $20,000 limit.

The Army student loan repayment program continues to provide opportunities to get your student loans reduced or paid off entirely. Remember that the program is for service members who already have student loan debts. So if you don’t have any outstanding debts but need assistance in your college tuition, then you might want to check the Army Tuition Assistance program.

Navy Loan Repayment Program

The CLRP program for the Navy is similar to the army loan repayment benefit.  The Navy provides a total of $65,000 in forgiveness, and it is accessible to every active duty service member who enlisted for the Navy. To qualify for the program, you have to be an active-duty military member for a minimum of four years.

The college loan repayment for Navy Reserve is similar to the army student loan repayment for Army Reserve members. The difference is that the overall benefit is up to $10,000 rather than $20,000 in the Army Reserve. Also, you must serve for a minimum of six years in the Navy for you to be eligible.

National Guard Student Loan Repayment

As a National Guard service member, you could get up to $50,000 of the National Guard student loan repayment. But that is when you enlist for a minimum of six years. The qualification requirement is more strict in other branches. You must join with a qualified job and agree to engage in active duty from six to eight years.

Current National Guard members can qualify for the National Guard student loan repayment if they extend their contract six years more, meet the required eligibility, and have a high score in the AFQT.

 

Air Force College Loan Repayment Program

You can qualify for the student loan repayment benefit up to a maximum amount of $10,000, if you enlist for a minimum of three years. When you complete your first active duty service, you’ll get $1,500 or 33.33% on your remaining principal balance. From then on, you’ll receive payment until you reach the $10,000 limit.

Marines College Loan Repayment Program

Currently, the Marines don’t offer any military college loan repayment for their service members. In 2007, they launched a trial program to offer a maximum of $30,000 in loan repayment for service members who would accept to serve in active duty for an additional six months in their new enlisting contracts. The program got discontinued in 2011.

Coast Guard Loan Repayment Program

The Coast Guard offers new service members up to a maximum of $30,000 loan repayment benefit. You will receive a cap up to $10,000 after the first year of active service. From then on, you can receive the benefits for the next six years, of course, if you haven’t reached the $30,000 mark yet. But you have to sign a contract of three years of military service for you to benefit from the program.

There’s important information to note here. If you receive benefits from the program and later leave the Coast Guard for a different military, you will have to pay back all the money the government gave you to cover your loan debt. If you are not cautious, you could be paying huge bills for a long time. So, don’t enlist to leave soon. The repercussions can be problematic and regrettable.

Get Your Free Assessment

Subscribe and get notified when we launch our platform and be one of the first to try it for free for an entire year. Already subscribed?

Your CLRP Benefits Will Not Cover Your Accrued Interest

Remember that the college loan repayment only provides the amount of money for your unpaid principal balance. The military doesn’t pay for the interests of the student loan. So, that means you have to pay the interest on your own. But the good thing is that, if the principal balance declines, so will the overall balance decrease. That means, you still don’t have to worry because it will save your money in the long term. Let’s go into details.

The CLRP is taxable, which could increase your income tax charge for the total years you received the loan repayment. Automatically, the federal government keeps 28% of the payment they pay to you, which should cover the tax liability in most instances. However, it also means you will not get the total amount because a portion of it goes to the IRS.

But if you want to avoid the interest from accumulating altogether, then you have to defer your payments. However, you can only do so while in active duty. What you have to do is to request your lending company that they suspend your loan debt. If they defer your payments, you won’t get an increment in your interest even though your CLRP benefits are clearing your principal loan. Again, that can only happen as long as you serve in active duty.

Before you defer your payments, speak to your loan servicer if your loan debt is eligible for a deferment. And also, if the deferment can prevent an increase in your interest loan.

Student Loans That Qualify For Military College Loan Repayment

Every student loan debt does not qualify for the CLRP program. Only federal loans qualify for the program. So if you have private student debt, you might want to consider other options outside the CLRP program. Here are lists of federal loans eligible for the program:

  1. Perkins Loans
  2. Parent PLUS Loans
  3. ALAS Programs
  4. Stafford Loans
  5. FISLs
  6. SLSs

Private loans, institution loans, and government-funded loans that do not qualify to receive forgiveness under the CLRP. If you want to know with certainty if your loan debt qualifies for the program, please visit the official website of the National Council of Higher Education Loan Program. After visiting the site, download the Higher Education Act of 1965, Title IV. You’ll find out if your loan debt is part of the list.

One more thing: if your loan is in default, you will not be eligible to qualify for the military CLRP program.

Service Personnel Qualified to Receive Military College Loan Repayment Benefits

Unfortunately, enlisting in the military service does not automatically qualify you to receive the CLRP benefits. After you initially join the military, extend your contract to a set time, you will also have to attain the following eligibility requirements:

  • If you’re initially enlisting the military, you must not have any previous military experience
  • If you are enlisting or rejoining the Navy or Air Force, you must accept to participate for a minimum of four years of active duty
  • For the Army, if you enlist or reenlist, you have to agree to serve a minimum of three years of active service
  • For those in Navy and Army reserves, and National Guard, you should accept to serve in active duty for a minimum of six years.
  • If you plan to receive benefits from the Army, they require a diploma in high school and a general score of 50 minimum in the ASVAB. The requirement is for reserves, active duty, etc. Also, for the high school diploma, GED’s are not part.
  • If you are in the Army Reserves and active duty, Air and Army National Guard, register for the MOS or AFSC that is eligible for the program benefit. However, note that there are always changes occurring in the MOS and AFSC. So speak to your recruiter to know if your MOS or AFSC qualifies for the program benefits.

If you want to receive the military college loan repayment, you should ensure that it’s stated in your contract. It’s very crucial. To conclude on the eligibility requirement, consolidate your student loan debt and send your promissory note to your assigned recruiter before you finalize your contract. When you qualify for the requirements listed above, you can receive your benefits.

How The Government Issues Your CLRP Benefits

You don’t receive the benefit payment directly. So don’t expect to get a check or a cash deposit in your bank. Instead, the government sends your funds to the loan servicer. After enlisting in the service, your loan lender will get their payments straight from the government. But that will be after you have completed everything required of you to be eligible to receive your CLRP benefits.

Military College Loan Repayment And Post 911 GI Bill Benefits

You can’t receive CLRP benefits together with Post 911 GI Bill unless you decide to serve for a more extended period. Instead, for you to acquire both program benefits, you need to serve for at least six years. In that case, the first three years will go towards the CLRP benefits, and the last three years will account for the Post 911 GI Bill.

But we recommend discussing the idea with your recruiter to find out more and also make sure that it’s clearly defined in your contract agreement. You have to make sure that you have the right information before you proceed with any choice.

Other Military Loan Forgiveness Programs

Aside from the military college loan repayment benefit, there are other forgiveness benefits available to you in different programs. They include:

  1. Public Service Loan Forgiveness (PSLF)
  2. National Defense Student Loan Discharge (NDSLD)
  3. Servicemembers Civil Relief Act (SCRA)
  4. Veterans Total And Permanent Disability Discharge

Public Service Loan Forgiveness (PSLF)

One of the best student loan forgiveness is the Public Service Loan Forgiveness. The program is not made for military members, but they can take advantage of the benefit. It’s a great deal if you want to move away from the military into a public service job position.

One crucial factor that will determine if the Public Service Loan Forgiveness is the best choice for you is if you can work for the next ten years. The reason is that the PSLF is willing to forgive your loan debt in exchange for ten years of working full-time in the public sector.

To qualify for the PSLF, you have to consecutively make ten-year loan repayment while working for a minimum of 30 hours in a week. Don’t forget that the 30 hours in a week are for working in a qualified public job position.

Jobs That Are Eligible For Public Service Loan Forgiveness

Public job positions refer to job positions offered by the government, state, or local. Also, working in a nonprofit qualifies you for the PSLF. In short, it means military members like you can qualify for the forgiveness program.  Also, jobs like firefighters, police, and other similar jobs all qualify as government jobs, and hence qualify for the PSLF.

One eligibility criterion to look out for in PSLF is that you must enroll in income-based loan repayment. Examples of those are:

  • PAYE Plan
  • REPAYE Plan
  • IBR Plan
  • ICR Plan

However, you have to do your research to know which program is the best one for you. Because some student loans can get total repayment by the end of the ten years. But PSLF is the best alternative for the numerous student borrowers out there, especially those with enormous debts.

National Defense Student Loan Discharge (NDSLD)

Have you used the National Defense Student Loan Discharge to pay for your college tuition? If so, then you can partly have the cost discharged. People with Perkins Loans and Direct Student Loan can qualify to get a part cancellation of their loan debt. That is, if they served in the Armed Forces and only if they had a one year of hostile fire or IDP area.

If you are sure that you do qualify, you can send a letter to the appropriate authority and explain why you think you are eligible for the program. The success rate is low, but it does work only if you qualify for the program.

Servicemembers Civil Relief Act (SCRA)

President Bush passed the Servicemembers Civil Relief Act (SCRA) in 2003. It’s an addition to the Soldiers and Sailors Civil Relief Act (SSCRA), which was enacted in 1940. The two define the benefits given to active duty military members. There are various benefits that the law provides, but the one that connects to student loan forgiveness is as follows:

  • A maximum of 6% on interest rates for loan debt that a service member incurred before joining the military.

In other words, if you have a loan debt that exceeds 6% of interest rate before you joined the military, you can be eligible to get the interest rate decreased. It doesn’t only apply to student loan debts, but also car loans, mortgages, debts on credit cards, and other loan debts incurred before you enlisted in the military.  

The SCRA is not like the interest in deferments, meaning that the Servicemembers Civil Relief Act forgives your debt; it doesn’t delay and accumulate in later months or years. To take advantage of this program, send an official request letter to your loan servicer and have them reduce your interest rate as stipulated in the SCRA law.

You should quickly act because you get a reduction in your interest rate as long as you’re on active service duty. So, you may want to move a bit soon.

Veterans Total And Permanent Disability Discharge (TPD)

Being permanently disabled in the line of active duty is not an exciting moment in life. It comes with many repercussions that can affect families physically, emotionally, and financially. Through the Veterans Total and Permanent Disability program, you can have your loans permanently discharged.

If you’re a veteran and were permanently disabled while you were serving in the military, your student loan debt can be forgiven. To qualify for the discharge, the Department of Veterans Affairs (VA) will have to verify that you have a service-related permanent disability. Then provide you with documentation approved by them to qualify you for the loan forgiveness.

The TPD can relieve you from the following loan programs:

  • Direct loans
  • FFEL loans
  • TEACH Grant service

When your TPD is approved, the VA will alert you that your loans have been cleared. They will also direct your loan servicers to return any loans you paid on or after the day VA approved your documentation.

Other Non-Military Loan Forgiveness Programs

Sometimes, you may still have issues with your student loan debt even after taking advantage of the military repayment and forgiveness programs. But other non-military forgiveness programs can also be of help to you. For the relief programs, there’s the:

  • Forgiveness programs
  • Consolidation programs
  • Forbearance programs
  • Deferment programs
  •  Rehabilitation programs

Remember to take advantage of the military college loan repayment benefit, but if for some reason, you don’t qualify or get your loan debt paid off, you can search on our page for the guides listed above. There is tons of information to help you each step of the way.

When Your Loan Debt Is Not In Good Shape

The CLRP programs explained above, together with the other forgiveness programs, are for people who have their loan debt in good shape. It means you’ve been consistent with your monthly payments, and thus, having a good record. But, if you end up in default or delinquency, or even get a wage garnishment, there are two options for you:

  1. Follow our guide on how to get out of default and delinquency
  2. Call us for a quick review assessment

If you’re not sure if it’s possible to get your student loans in good shape, we recommend that you retake a look at your options and attempt a bankruptcy discharge.

Bankruptcy Discharge

If there’s a high possibility that you’ll not get rid of your loans through other means, then you can file a bankruptcy to clear off your student loan debt. It’s not that simple to pay off your loan debt through a bankruptcy discharge, but it’s certainly possible. It’s worth taking a look if you don’t have enough funds, and huge debts are weighing you down.

However, if your loans are private, then nothing outlined in this guide is beneficial to you. Fortunately, there are options to help you get financial relief from your student loans.

Let’s have a look.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

Private Student Loans Forgiveness Programs

Let’s state the facts clearly, private student loans are challenging to pay off. However, few ways can help you eliminate your debts. There are:

  • Private loan consolidation programs
  • Default help
  • Bankruptcy discharges
  • Forgiveness programs

Luckily, one of these programs can help you clear off your student loan debts. Seek professional advice to get a clear view of your case. It’ll help aid you in getting rid of your loans faster.

Things To Take Into Account About The Military College Loan Repayment

When you get to find out that the military can pay some or all of your loan debt, it can be tempting to sign up for the military. However, before you enlist, especially when you sign the contract agreement, be very sure of how you’ll get the loan payment and what you need to do to get it. Consider the following things:

Know The Seriousness Of Enlisting In The Military

Have a clear understanding of being a military member, what you’ll be doing, where you will live, how long you will stay there, and the emotional and physical dangers involved.

Do A Proper Research About The Military

If you haven’t joined the military before, then you may need to consider if joining the military is the right step forward. Take some time off to be 100 percent sure, both physically and emotionally, that enlisting in the military is the best thing to do.

Have A Proper Understanding Of The Contract Agreement

Contract agreements can be a little bit complicated. Have a deep understanding of the terms of the contract. How long will you be on active duty, and on what terms?

Be Sure That Your Student Loan Is Eligible

Nothing is worse than joining a military, say, National Guard, and later finding out that your loan did not qualify for the National Guard student loan repayment. Every military has its own eligibility requirements. Find out which one is suitable to get your debts paid off. If you’re in default, confirm if you can still get a loan repayment or not.

Ask About The Military College Loan Repayment Before You Enlist In The Military

To avoid any mistakes, find out all the opportunities available to you before enlisting.

Compare Loan Repayments

How much will you be forgiven under the National Guard student loan repayment? What about the Army student loan repayment? What will be your salary at the end of the month? Will it cater to you and your family (if any)? Verify the CLRP benefits to be sure you are making the right choice.

If You’re Not Interested In The Military, Consider Other Options

There are other options you can take a look at that’s not life-changing. There are many student loan forgiveness programs that can help you pay off your student loans. Explore those areas and find the perfect one that fits your needs.

Conclusion

The military college loan repayment provides numerous ways for you to get rid of your student loans for good. The type of military you enroll in will determine if your loan will totally be cleared, or you’ll need other forgiveness loans to total pay off your debt. But you have to remember that entering the military is a life-changing course. It’s a career that needs a considerable time to make a final decision.

It’s a good idea to join the Army to repay your loans. But it is also better if you’ll consider the pros and cons of enlisting in the military with the sole intent of repaying your student loan debt. It’s a big decision, no doubt. That’s why we are here to help. For you to choose the right military college loan repayment, you need a good strategy. Call us for a free consultation before you enlist in the military. We will be prepared to help you with your financial freedom. In the end, you might not even need to join the military in the first place. Find a competent professional adviser before you make the final call!