Only loans taken out prior to enlisting are eligible for the reduced interest rate. The SCRA also applies to other debt, such as credit cards, car loans and mortgages.
The benefit is not automatic, though. Borrowers need to submit a written request to each of their loan servicers and provide a copy of their military orders.
Other Federal Benefits
Individual branches of the military have their own student loan repayment programs, too, notes financial aid expert Mark Kantrowitz, publisher of Edvisors.com.
The Army, for example, pays up to $65,000 in qualified loans. Graduates need to request the benefit when they enlist and must turn down the GI Bill.
Military repayment assistance only applies to federal loans, which can be a point of confusion for some service members, he says.
"The forms signed by new members of the military were not at all clear on this point," he says. "While there have been some improvements, I still hear from veterans who are upset about it."
Additional federal benefits are available for service members directly in the line of fire. Troops stationed in hostile areas that qualify for special pay "do not have to pay interest on Direct Loans made on or after October 1, 2008, for up to 60 months," according to the Department of Education, and those injured while serving may be able to have all of their federal student loans discharged.
Full-time, active-duty service members are not the only ones who qualify for student loan relief. The National Guard has a student loan repayment plan for guardsmen who enlist for at least six years and meet other requirements. The program pays up to $7,500 annually, with a maximum total benefit of $50,000, for those who qualify.
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