3. The National Defense Student Loan Discharge

The program is targeted at individuals working in public services, so the military personnel are eligible for loan forgiveness under this program. The program cancels any remaining student loan after 120 monthly payments made on time and consecutively. During this time, the candidate must have a full-time job (at least 30 hours/week). The program is not as direct as the CLRP, nor does it offer high forgiveness, since there are few chances that the military has a high amount of money to pay on their loan after 10 years of full payments. Also, the program was established in 2007, which means that individuals will start benefiting from it in 2017, so it is not a solution for military members in immediate need of help.

A good way of making the loan easier on the budget is to recalculate monthly payments. This will offer a partial relief on the financial burden and leaves more for the loan forgiveness coverage.

The National Defense Student Loan Discharge (NDSLD) program is aimed towards military personnel who accessed a loan through the Perkins Loan or a National Direct Student Loan programs and who served at least one year in an area with imminent danger and/or direct fire. The program has not yet reported the forgiveness rate or the number of people who have taken advantage of it so far, but it is certainly worth a try. Candidates must fill in a special DD 214 discharge form and explain why they think they qualify for the program. The form and the explanatory letter must be sent to the company which services the loan.

4. The Servicemembers Civil Relief Act

The Servicemembers Civil Relief Act establishes a series of benefits for military personnel, including a maximum interest rate of 6% for any loan contracted before enrolling in the military service. This means that individuals who have a student loan and enroll in the army can reduce their interest to 6%. In most cases, this translates into a considerable reduction of the total sum which must be paid. This measure is valid only for the period in which the military is in service, so it is recommended that the papers are done immediately after enrollment for dramatic reductions. In order to benefit for the SCRA, the qualified candidate must contact the loan provider attaching copies of the order and an official request to reduce the interest rate according to the SCRA law. The good news is that the SCRA interest rate reduction is available for any type of loan, including car loans, mortgages and credit cards.

5. The Veteran’s Total and Permanent Disability (TPD) Discharge

Military and veterans who have suffered injuries during their service or have a total and permanent disability, can apply for a loan discharge. This means that the individual’s debt will be erased because he/she is incapable of working in order to pay it back. The program is available for candidates who have a Direct loan, a Perkins loan or an FFEL loan.

In order to receive a loan discharge, the candidate must notify the US Department of Education that they have a TPD and submit a special application along with the documents which prove your disability. Veterans need to send information form to the US Department of Veteran Affairs stating that your TPD prevents them from being employed and thus you cannot repay the student loan contracted previously. The Department will evaluate the papers and decide if the veteran is eligible for a loan discharge.

6. Military Student Loan Forgiveness Deferment Programs

The Student Loan Deferment program does not offer students loan forgiveness, but helps individuals delaying its payment only till a later date. This decreases the financial pressure for a period of time, until the applicant can make ends meet. Yet, the program is not available to all military with student loans. In order to find out if a candidate is eligible, the individual must contact the lender and discuss their situation. Candidates who are actively involved in classes and also take specific training are very likely to benefit from a loan deferment, but once again, it is necessary to discuss each case with the company servicing the loan. A personalized approach is available and candidates may get a good deal after the discussion.


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