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.