If you’re a veteran with student loan debt, you may be able to benefit from student loan forgiveness. Forgiveness means you no longer need to repay some or all of your loans. This article covers what you need to know about student loan forgiveness for veterans and how to qualify.
If you don’t qualify for loan forgiveness, you may want to consider refinancing. Visit Credible to compare student loan refinance rates from various lenders, all in one place.
- Are veterans eligible for student loan forgiveness?
- Public Service Loan Forgiveness (PSLF)
- Total and permanent disability (TPD) discharge
- National Defense Student Loan Discharge
- Student loan repayment assistance programs for veterans
As a veteran, you may be eligible for a host of benefits that can lower your cost of higher education. For example, the GI Bill can help pay for some or all of your tuition and fees, as well as housing expenses and the cost of textbooks while you’re in school.
If you already have student loans, you may qualify for loan forgiveness. Depending on when and for how long you served, and when you took out your loans, you may be eligible to have your student loans forgiven or discharged as a veteran. A few different federal programs offer this benefit. Here are a few of the most common.
The Public Service Loan Forgiveness Program, or PSLF, is a federal student loan program that forgives your remaining student loans if you make 120 qualifying on-time payments while working in the government or nonprofit sectors. Service in the U.S. military counts under this program.
How to qualify for PSLF
In general, to qualify for Public Service Loan Forgiveness, you must:
- Work full-time for the federal government, a state or local government, or a qualifying nonprofit.
- Hold federal Direct Loans (you can consolidate other federal loans into a Direct Consolidation Loan to qualify).
- Repay your loans with an income-driven repayment plan.
- Make 120 qualifying monthly payments.
Qualifying monthly payments must meet certain criteria. Payments must be made:
- After Oct. 1, 2007.
- Under an income-driven repayment plan.
- For the full amount due.
- No later than 15 days after the due date.
- While you work full-time for a qualifying employer.
Under rules adopted during the COVID-19 pandemic, you may be able to receive credit for payments that don’t normally qualify toward Public Service Loan Forgiveness. You can potentially receive credit for some late payments, payments less than the amount due, or payments made under different repayment plans. You can determine if you qualify under the new rules by using the Federal Student Aid website’s PSLF Help Tool.
How to apply for PSLF
As you get closer to your 120-payment requirement, you can fill out the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application form to make sure your employment and payments qualify you for the program. Filling out this form early will help you determine if you’re on track for PSLF.
The easiest way to fill out this form is through the PSLF Help Tool. It’ll generate a form that you’ll need to print out and sign, and bring to your employer to sign. Once it’s signed, you can send it to a PSLF servicer. These instructions are on the form.
If you become permanently disabled and unable to work, you may qualify to have your federal student loans canceled. As a veteran, a determination from the U.S. Department of Veterans Affairs that you’re 100% disabled due to service will likely qualify you for the TPD discharge.
The following loans are eligible to be canceled:
- Federal Direct Loans
- Federal Family Education Loans (FFEL)
- Federal Perkins Loans
- TEACH Grants (You don’t have to complete your service obligation for this grant.)
How to qualify for a TPD discharge
To qualify for a TPD discharge, you’ll need to show the government that you have a total and permanent disability. This means that:
- You’re unable to perform substantial gainful activity due to a physical or mental impairment. Substantial gainful activity essentially means work for pay.
- Your impairment is likely to result in death, has lasted for at least five continuous years, or is expected to last for five years or more.
- If you’re a veteran, the VA determined that you aren’t able to work due to a service-related disability.
Documentation you’ll need
Documentation that proves you have a total and permanent disability can come from the U.S. Department of Veterans Affairs, the Social Security Administration, or a physician.
For you to qualify, the VA must be able to provide paperwork showing you’re 100% disabled due to a service-related disability, or that you’re otherwise unemployable under its framework.
If you receive Social Security Disability Insurance benefits or Supplemental Security Income, you can also show you qualify by providing a Social Security Administration notice of award or Benefits Planning Query that outlines your total disability. The review date must be at least five to seven years from your current determination.
If neither of the above applies, you may be able to qualify with a certification from your doctor that you’re unable to work.
How to apply for a TPD discharge
You may not need to apply for a TPD discharge at all. The VA and Social Security Administration proactively look for people who qualify for student loan forgiveness and send the information to the U.S. Department of Education. If that happens, you’ll get a letter notifying you that you can have your student loans discharged. Unless you specifically decline, your loans will be canceled automatically.
If you haven’t gotten this letter but believe you qualify for a TPD discharge, you can:
- Complete a TPD application at DisabilityDischarge.com. The website will create a form that you can print and sign.
- Attach your required documentation.
- Mail or email the completed form to the federal TPD servicer using the instructions on the application.
The National Defense Student Loan Discharge program cancels student loan debt for veterans who served in areas under hostile fire or in imminent danger. You may be able to have up to 100% of your Federal Perkins Loans or National Direct Student Loans canceled if you served for enough time in these conditions.
How to qualify for a National Defense Student Loan Discharge
The amount you qualify for depends on your years of service. Cancellation begins at 15% for the first and second year of service, 20% for the third and fourth years, and 30% for the fifth year. After five years of active-duty service under hostile fire or in imminent danger, 100% of your loans qualify for cancellation.
How to apply for a National Defense Student Loan Discharge
If you qualify, you can apply through the school where you received your Perkins Loans or through the school's Perkins Loan servicer. Contact the school or servicer for more information on applying.
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If you don’t qualify for student loan forgiveness or cancellation, other programs for veterans may help you pay your student loans, such as repayment assistance. These are programs where third parties, like employers or local governments, make student loan payments on your behalf.
Prior Service Loan Repayment Program
Army Reserve soldiers who formerly served on active duty may qualify for loan repayment assistance of up to $50,000.
Army Loan Repayment Program
The U.S. Army offers to pay up to $65,000 of your federal student loans as an incentive to enlist. You must agree to serve for at least three years and take an Army position that qualifies for the benefit. Ask your Army recruiter for the most recent list of eligible positions.
If you qualify, the Army will pay up to one-third of your student loan balance each year or $1,500 (whichever is greater) for up to three years — up to the maximum benefit of $65,000.
Navy Loan Repayment Program
The U.S. Navy offers a program very similar to the Army’s. The Navy Loan Repayment Program also offers to pay up to $65,000 of a new sailor’s student loans for three years of service, at a rate of one-third of your student loan balance per year.
National Guard Student Loan Repayment Program
Joining the Army National Guard with or without prior military service could make you eligible for this student loan assistance program, which promises up to $7,500 in federal loan repayment per year for up to six years. Borrowers must agree to serve for at least six years, and take part in a qualifying job.
Air Force College Loan Repayment Program
With this program, the Air Force pays up to $10,000 for service members who agree to serve at least three years, at a rate of one-third of their student loan balance per year. If you join the Air Force Judge Advocate General’s (JAG) Corps, you can qualify for up to $65,000 in federal loan repayment after three years of service.
Coast Guard Student Loan Repayment Program
Civilian employees of the U.S. Coast Guard may be eligible for up to $60,000 of student loan repayment assistance after six years of service. You must serve at least three years to receive reimbursement, which qualifies you for up to $30,000 in repayment assistance.
Health Professions Loan Repayment Program
Doctors, dentists, and other healthcare professionals who agree to serve in the U.S. military may be eligible for student loan repayment assistance at a rate of $40,000 per year of service. The Army, Navy, and Air Force all have their own versions of this program, but they may have different maximum amounts for repayment assistance.
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