Student Loan Debt 101

If you’re a recent college graduate or you have a child that borrowed student loans, the reality of those loans might be starting to hit you. As a service member, you may be entitled to loan forgiveness or repayment assistance.

Nearly three-quarters of students graduate with student loan debt. If you or your child is one of them, it’s important to include student loan debt repayment in your financial planning.

The first step to paying student loan debt is learning all of the terms and conditions of the loans. Are they private or federal loans? Are the loans subsidized or unsubsidized? Is there a grace period after you or your child leaves school? If so, take advantage of that time and set money aside to be prepare for when the first payment is due.

While it might seem convenient, try to avoid loan deferment.  In most cases, student loans will continue to accrue interest even when they’re on hold. Once you determine how much you’ll be paying towards you or your child's student loans each month, calculate that payment into your monthly budget. Creating a budget is one surefire way to get your finances on track! 

The Public Loan Forgiveness Program offers loan forgiveness to members of the military who have made 120 qualifying monthly payments towards their student loans. The Army College Loan Repayment: Active Duty program offers annual payments to active duty service members who have previously accrued student loan debt. To qualify, you must have a score of 50 or higher on the Armed Forces Qualification Test. 

You have 10 years to use your benefits from the GI Bill after you leave the military. After you apply to receive benefits, the GI Bill may cover your full tuition. You will also receive monthly housing allowances and money towards your books and supplies. 

For more information about student loan repayment, watch the video.  

 

 


Tip of the Day

  • Written by Katie Bryan | November 28, 2013

    Set a goal, make a plan, #save automatically - pledge to save today!  http://ow.ly/ksLWb

Saver Stories View all »

Building Wealth by Setting Goals

Written by Super User | April 24, 2013

My name is Allison Mecadon and I’m a Youth Coordinator with the Virginia National Guard Youth Program. My husband, Tom, is an M-Day Army National Guard Member (an M-Day member is one who performs weekend drill, but is not on full-time duty).

Read more...

Airman Succeeds Through Dedication to Building Wealth Not Debt

Written by Super User | October 13, 2011

I came into the Air Force at 23 years old in 1993 with about 12 outstanding bills (hospital bills, car loan, car insurance, school loans, credit cards, etc.). You name it, I had the bill. Thanks to the Family Support Center, Dave Ramsey's Financial Peace University, and many other sources, I now have no outstanding bills.

Read more...

Meet Wacinque BeMende

Written by Super User | November 26, 2010

Meet Wacinque BeMende. He’s so passionate about encouraging savings and promoting financial literacy, he’s established his own Kid’s Savings Program. Wacinque donated $15,000 to the Community Action of Laramie County in Cheyenne Wyoming to begin the Wacinque “ Rhino” Fund Endowment to help kids open savings accounts.

Read more...