Military Spouse Student Loan Benefits: What's Covered?

Military spouses face unique challenges when it comes to funding their education. While there are no military spouse student loan forgiveness programs, military spouses can still benefit from federal student loan forgiveness programs such as the Public Service Loan Forgiveness Program (PSLF) and Income-Driven Repayment (IDR) plans. Additionally, the Servicemembers Civil Relief Act (SCRA) provides a 6% interest rate cap for service members and their spouses during active duty and for one year after. Military spouses can also take advantage of tuition assistance programs, grants, scholarships, and federal loans, which often have lower interest rates and more flexible repayment options than private loans.

Military spouse student loan forgiveness programs

Military spouses face unique challenges when it comes to funding their educational goals. While there are no military spouse student loan forgiveness programs in existence, military spouses can still take advantage of other loan forgiveness programs to cover existing loan debt.

Public Service Loan Forgiveness Program (PSLF)

The Public Service Loan Forgiveness program is a federal program that encourages individuals to enter certain career paths. Military spouses who work full-time for eligible employers can have their student loan debt wiped out in as little as 10 years. All Federal direct loans qualify for the PLSF, with the exception of Federal Family Education Loans (FFEL) and Federal Perkins Loans. However, if you consolidate these exempted loans into a Direct Consolidation Loan, they might become eligible. Private loans are not qualified for this program.

Income-Driven Repayment (IDR) Plans

If you don't qualify for the PSLF, you can still get military spouse student loan forgiveness through Income-Driven Repayment (IDR) Plans. IDR refers to the four student loan repayment options based on a percentage of your income. Depending on your chosen plan, you can potentially have a remaining balance of 20 or 25 years forgiven. This program also sets a cap on loan payments as a small percentage of your income, generally 10% to 20%. Unlike PSLF, you'll pay taxes on the forgiven debt amount with IDR forgiveness.

Servicemembers Civil Relief Act (SCRA)

The SCRA allows military spouses to lower the interest rate on their loans to a maximum of 6%. However, this interest rate cap extends only to student loans taken out before the service member enters active duty. Technically, this program does not offer student loan forgiveness but can help lower monthly payments.

Post-9/11 Bill

The Post-9/11 Bill allows Armed Forces individuals to pass unused education benefits to immediate family members, including military spouses.

Nurse Corps Loan Repayment Program

The Nurse Corps Loan Repayment program is available for military spouses who work as nurses. To qualify for this program, they must work in designated critical shortage facilities (CSF) or eligible nursing schools for at least two years.

Federal student loans

Military spouses can access federal loans through the Free Application for Federal Student Aid (FAFSA), which determines eligibility for federal financial aid. The FAFSA offers Federal Pell Grants, which are typically awarded to undergraduate students and do not need to be repaid. Federal Direct Stafford Loans are another option, providing low-interest loans for students enrolled at least half-time in a variety of educational institutions. Federal PLUS Loans are also available to eligible graduate or professional degree students and parents of dependent undergraduate students.

Military spouses can benefit from special programs and protections, such as the Servicemembers Civil Relief Act (SCRA), which provides a 6% interest rate cap during active duty and one year after for financial obligations incurred before military service. Additionally, the Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on direct loans after 120 qualifying monthly payments while working full-time for a qualifying employer. Military spouses who are educators can apply for the Teacher Loan Forgiveness program, which offers up to $17,500 in forgiveness benefits. The Nurse Corps Loan Repayment program is another option for military spouses working as nurses, covering up to 85% of nursing education debt.

While military spouses are not eligible for public service loan forgiveness programs, they can explore conventional federal forgiveness programs. Federal student loans offer a range of income-driven repayment plans, such as the Income-Contingent Repayment (ICR) plan, which caps monthly payments at 20% of discretionary income. Consolidation loans allow borrowers to combine multiple federal loans into one, making repayment more manageable. Federal loan borrowers should also be aware of their grace periods and deferment options, which can provide temporary relief from payments during active duty or other qualifying circumstances.

Private student loans

Military spouses can access both federal and private student loans. While there is no designated military spouse student loan forgiveness program, military spouses can qualify for the Servicemembers Civil Relief Act (SCRA). The SCRA provides a 6% interest rate cap for service members and their spouses during active duty and one year after for financial obligations made before their military service. This does not offer loan forgiveness but does lower monthly payments.

Private student loan refinancing is when a person applies for a new loan to repay their current student loans, allowing them to lower their interest rates or extend payment timelines. This is only available from private lenders and means forfeiting federal protections like specialized repayment plans and potential loan forgiveness.

The Public Service Loan Forgiveness Program (PSLF) is a federal program for individuals who work at eligible public service jobs like non-profit organizations. Military spouses who work full-time for eligible employers can have their student loan debt wiped out in as little as 10 years. The PSLF will forgive the remaining balance on direct loans after you have made 120 qualifying monthly payments under a repayment plan while working full-time for a qualifying employer.

The Nurse Corps Loan Repayment Program covers up to 85% of education debt for registered nurses, advanced practice registered nurses, and nurse faculty who work in an approved healthcare facility with a critical shortage of nurses or an approved nursing school as nurse faculty. Military spouses who are nurses can qualify for this program if they work in designated areas for at least two years.

Interest accrual and forbearance

While there are no military spouse student loan forgiveness programs, military spouses can take advantage of conventional federal loan forgiveness programs. Military spouses can also benefit from the Servicemembers Civil Relief Act, which provides protections and benefits to eligible spouses.

Military spouses can explore the following options to manage their student loan debt:

• The Public Service Loan Forgiveness Program (PSLF): Military spouses who work full-time for eligible employers can have their student loan debt forgiven in as little as 10 years. However, this program can be challenging for military families who move frequently.
• Income-Driven Repayment (IDR) Plans: These plans offer four student loan repayment options based on a percentage of the borrower's income. Depending on the chosen plan, any remaining balance after 20 or 25 years of repayment may be forgiven. It's important to note that taxes may apply to the forgiven amount under IDR plans.
• Interest accrual limits: Interest does not accrue on Direct Loans issued after October 1, 2008, for military members serving in hostile areas that qualify for special pay. Borrowers with older Direct Loans or FFEL loans can consolidate them into the Direct Loan program to benefit from this.
• Grace periods: Initial grace periods can be extended for up to three years if called to active duty for more than 30 days before the grace period ends. The grace period restarts upon returning from active duty.
• Deferments and forbearances: Military members on deployments may be eligible for special deferments to pause student loan payments during repayment or while in school. Additionally, servicemembers and their families can explore forbearance options in certain circumstances.

It's important to note that private student loans have different requirements, and military spouses may need to contact their loan servicers directly to discuss options for lowering interest rates or requesting forbearance.

Funding college for military spouses

Military spouses face unique challenges when it comes to funding their education. While there are no military spouse student loan forgiveness programs per se, there are other options available to help fund college for military spouses. These include:

Student Loan Forgiveness Programs

Although there are no military spouse-specific student loan forgiveness programs, military spouses can still take advantage of conventional federal loan forgiveness programs offered by the U.S. Department of Education. The Public Service Loan Forgiveness Program (PSLF) is one such option, which is available to individuals working at eligible public service jobs, including non-profit organizations. Military spouses who work full-time for eligible employers can have their student loan debt wiped out in as little as 10 years. It's important to note that PSLF can be tricky for military families who move around frequently, and private student loans are generally ineligible for forgiveness.

Income-Driven Repayment (IDR) Plans

Military spouses can also consider IDR plans, which offer student loan repayment options based on a percentage of their income. With IDR plans, any remaining balance after 20 or 25 years of repayment may be forgiven, although taxes may apply on the forgiven amount.

GI Bill Benefits

The Post-9/11 GI Bill provides up to 36 months of education benefits for approved programs, and service members may transfer unused GI Bill benefits to their dependents, including military spouses. This can be a valuable source of funding for college or other educational pursuits.

Scholarships and Grants

Various organizations offer scholarships and grants specifically for military spouses, such as the National Military Family Association (NMFA) and ThanksUSA. These scholarships and grants can provide much-needed financial assistance for college or other educational programs. Additionally, the General Henry H. Arnold Education Grant Program offers need-based grants of at least $2,000 to spouses of active duty, retired, and deceased active-duty Air Force members.

Financial Aid

Military spouses can also explore financial aid options such as grants, scholarships, low-interest loans, and work-study programs. Many colleges grant financial aid on a first-come, first-served basis, so it's important to submit the necessary forms even if you're unsure of your eligibility.

Savings Options

Planning and saving for college expenses is another strategy for military spouses. Options like Coverdell Education Savings Accounts (ESA) and 529 College Savings Plans offer tax advantages and help individuals save for education expenses.

Career Training and Support

Onward to Opportunity, formerly known as the Veterans Career Transition Program, is a free program that provides career skills training, professional certifications, and job placement support to military spouses. This can be a valuable resource for those seeking to develop their careers and improve their employment prospects.

While there may not be dedicated military spouse student loan forgiveness programs, the options outlined above demonstrate that there are still numerous avenues to explore when it comes to funding college for military spouses. By taking advantage of these opportunities, military spouses can pursue their educational goals and achieve financial assistance.

Frequently asked questions