Military Spouse Student Loan Forgiveness: A Guide
Did you know Americans have over $1.75 trillion in student loan debt? An average American has $29,400 in student loan debt upon graduation, which can affect them for years. Many Americans struggle to pay this debt for different reasons, and military spouses are not exempt from this dilemma.
Being a military spouse poses many problems, including new employment opportunities once their spouse is relocated, good childcare facilities, and uprooting themselves in new communities. Unfortunately, there is no military spouse student loan forgiveness program.
While active duty service members have different student loan forgiveness programs to choose from, these programs don’t extend to the student loan debt of their respective spouses. However, military spouses can explore other programs to lower their debt-related expenses.
We’ll discuss different public service loan forgiveness programs and options to lower private student loans that military spouses can consider.
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Is there a Military Spouse Student Loan Forgiveness Program?
No, there is no designated military spouse student loan forgiveness program. Most military loan forgiveness programs apply only to active duty service members.
However, being a military spouse may offer perks and opportunities to lower this financial burden. One such benefit is the Servicemembers Civil Relief Act, which can reduce the debt interest rate to six percent. Alternatively, they can also look into federal forgiveness programs to help better manage their expenses.
Federal Student Loan Forgiveness Programs
The spouses of military members can look into the existing federal student loan forgiveness programs to offset their student loan debt. Each program has unique eligibility requirements, meaning some programs are exclusively available to certain professions. While these programs won’t lift their financial burdens, they can significantly help, especially in the long run.
IDR Loan Forgiveness
Under an Income-Driven Loan (IDR) Forgiveness plan, a military spouse may have any existing balance on their student loans forgiven after 20 to 25 years. IDR refers to four student loan repayment options based on a person’s income percentage. These options are:
- Income-Contingent Repayment Plan (ICR Plan)
- Income-Based Repayment Plan (IBR Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
IDR plans to limit the income amount dedicated to loan payments, which generally ranges between 10% and 20%. Qualified individuals must pay taxes on the forgiven loan amount. However, they’ll have decades to plan to pay these taxes.
PSLF or Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is a federal program that encourages people to pursue careers in government or non-profit organizations. It helps people who work for a qualified employer eliminate their student debt.
A comprehensive list of eligible employers, including government and non-profit organizations, is available. Military service is one of the available options one can explore.
To qualify for PSLF, an individual must have successfully paid a minimum of 120 monthly payments with a qualified payment plan. This is equivalent to a decade of payments while employed by a qualified non-profit organization or the government.
Because of the COVID-19 pandemic, this program has underwent several temporary changes, including the following:
- All federal student loans were put into zero-interest forbearance in March 2020, and no payments were due until October 2023.
- The Department of Education issued a limited waiver for counting payments. While a PSLF-designated one-year waiver expired last October 2022, a related income-driven repayment account adjustment extends until the end of 2024.
Spouses with considerable student debt can save tens of thousands of dollars. This program can knock off years or in some cases even a decade of loan payments.
All federal direct loans qualify for this program, except for the Federal Family Education Loans (FFEL) and Federal Perkins loans. However, they may count if these exempted loans are included in a Direct Consolidation loan. Private student loans aren’t included in this program.
Teacher Loan Forgiveness
If the military spouse turns out to be a teacher, they can apply for the Teacher Loan Forgiveness program. This program is open to full-time teachers who’ve completed at least five straight years in an educational service agency or low-income school.
Those who’ve met the requirements of this program can get up to $17,500 on Direct Subsidized and Unsubsidized Loans as well as Subsidized and Unsubsidized Federal Stafford Loans. Other qualified educators can receive up to $5,000 in loan forgiveness.
Nurse Corps Loan Repayment Program
Thanks to this program, registered nurses (NRs), advanced practice registered nurses (APRNs), and nurse faculty can receive loan forgiveness of up to 85% of their total unpaid nursing education. To qualify, the applicant must have worked as a nurse faculty member in an eligible nursing school or critical shortage facility (CSF).
The Nurse Corps Loan Repayment program is available to military spouses who are registered nurses. They must have worked in assigned areas for at least two years, making it feasible for spouses who can move for work.
National Health Service Corps Loan Repayment Program
This particular federal program recruits health professionals to work in assigned areas with a shortage of healthcare experts. The program helps them repay their qualifying educational loans in exchange for their services.
Aside from loan debt forgiveness, military spouses who qualify for this program can enjoy a competitive salary and an opportunity to help the community.
This program is available to military spouses who can move to assigned areas. However, this is open to healthcare professionals only.
Alternate Ways To Finance Military Spouse Student Loans
Some of the programs mentioned above require spouses to work in specific fields. But what if they don’t qualify for these programs? Fortunately, other programs can help finance their loan debt.
Servicemembers Civil Relief Act (SCRA)
The SCRA, formerly known as the Soldiers and Sailors Civil Relief Act, allows military spouses to reduce their student loan interest rate to a maximum of six percent if the loans were signed before the service member entered active duty.
While this may not technically be a student loan forgiveness program, it can help lower monthly payments.
This particular SCRA protection only applies during the service member’s active duty period until a year after their service ends.
Moreover, the military spouse must proactively apply for this interest rate reduction and provide evidence that their spouse is rendering military duty. Student loans signed after the service member entered active duty don’t count for SCRA protections.
Transferring Post-9/11 GI Bill Benefits To A Spouse
The Post-9/11 Bill enables people in the Armed Forces to pass unused education benefits to immediate family members, including military spouses.
To push for this, the service member must have rendered at least six years and commit to four more years. The recipient of loan forgiveness must have been enrolled in the Defense Enrollment Eligibility Reporting System (DEERS).
Student Loan Refinancing
Student loan refinancing permits people to swap their current student loan for another with better interest rates or payment terms. This can lower one’s monthly payments, making them easier to pay. Federal loans not qualifying for loan forgiveness can be consolidated into a qualifying loan type.
State-Sponsored Assistance Programs
Select states offer loan assistance programs to their residents. For example, qualified social workers in New York can receive up to $26,000 in loan assistance through the NYS Licensed Social Worker Loan Forgiveness program.
Final Words
While there is no designated loan forgiveness program for military spouses, other programs and methods of financing debt exist to help alleviate their financial burden. What’s vital is that they empower themselves with their options and learn how to qualify for the best options. They can stave off thousands of dollars in debt that can help their everyday budget.
Should military spouses choose a financing option that depends on their spouse’s military status, they must present evidence that their spouse is on active duty. This is where SCRACVS can provide proof of one’s active duty status. Check the service member’s active duty status by clicking here
FAQs
Does student loan forgiveness apply to the military?
Yes, several student loan debt forgiveness programs are geared toward active duty service members.
What benefits do military spouses get?
Military spouses enjoy benefits such as access to commissaries and exchanges, free healthcare, military discounts, etc.
Will my IDR loan be forgiven?
Any remaining loan can be forgiven if it isn’t fully repaid even after 20 to 25 years of payments.
How do you get the military to pay off student loans?
This would depend on the program one applies to, but the essential requirement is enlisting as a service member.
