Student Loan Resources for Military

March 20, 2013 | Kate Horrell

Student loan debt is a huge issue for many families.  The Consumer Financial Protection Board knows that student loan repayment is an important topic.  Today, their Servicemember Affairs group had a Military Educator Forum to discuss loan repayment options available to the military.  While I wasn’t invited to attend, I did follow along on Facebook.  Here’s what I read there:

SCENARIO 1: After venting to his mom about his crushing student loan debt, fictional servicemember Adam Krahn visits Angela, a personal financial manager, for help. He’s frustrated and desperately wants answers. Angela tells him that other servicemembers like him can owe as much as $25,566 in student loans, aren’t getting accurate information from their servicers about repayment options, and often don’t understand their legal protections. She starts off by explaining to Adam what a loan servicer does and then refers him to an education services officer for further assistance.  http://1.usa.gov/16GSLjZ

SCENARIO 2: Relieved that his situation is common, Adam visits Patrick, an education services officer (ESO). He learns loan repayment options can be complicated, and that deferments or forbearance are not the best options. They can add thousands of dollars in interest and make him ineligible for better repayment programs like Income-Based Repayment (IBR) or the Public Service Loan Forgiveness (PSLF). Patrick tells Adam that checking whether his loans are federal or private student loans through the Department of Education’s National Student Loan Data System (NSLDS) will help him figure out the best options. Patrick refers him to the JAG Office for information on how the SCRA can help:http://1.usa.gov/ZXENos

SCENARIO 3: Melissa, a legal assistance attorney, explains to Adam that he can use the Servicemembers Civil Relief Act (SCRA) to reduce the interest rate on all his pre-service student loans to 6%. He has to send a written request to his loan servicer along with a copy of his military orders. That rate reduction could save him thousands of dollars and is guaranteed by law. She lets him know that can submit a consumer complaint to the CFPB if he is denied or has any trouble with his loan servicer:http://1.usa.gov/16GSOMD.

SCENARIO 4: Adam still can’t believe how complicated student loan repayment options can be. He’s learned that his best choice is to work with qualified professionals like PFMs, ESOs, and JAGs to help him work through which options for his student loan situation. He knows he can find them at any installation by visitinghttp://1.usa.gov/16GSSMf.

While this is the strangest post I’ve ever written (a string of someone else’s FB status?), I think that there is some useful information here.  I had no idea that so many military resources were available to help make smart decisions about loan repayment questions.  If you have student loan debt, be sure to learn every aspect of every option before you take action.  You’ll ensure the best decision for your current situation, and for your future success.

Have you used military resources to make decisions about student loans?  Was it helpful?  Would you recommend it to others?

Comments

  1. Dawn P says:

    I am the wife of a reservist who will be deployed soon. I have 50,000 in student loan debt and have not been able to find work. What should I do? There is no way that I can even begin to make the minimum payments when I can't even find work? Also with the deployment looming over us, it is hard to find work that will work within my schedule and allow me to be available still for my son???

    • KateKashman says:

      Dawn, there are a couple of issues here. You would probably benefit from some personalized advice about your entire financial situation, especially if this activation is going to mean more or less pay for your husband. If you are near a military base, you can utilize the services of your family readiness center. Otherwise, Military OneSource offers online or telephone financial counseling. What I can say is that you need to be trying as hard as possible to pay something towards your loans. Even if you apply for a deferment or forbearance and receive it, you are still accruing interest on this large debt. If you feel that you can not work while your husband is deployed, make it your job to micro-manage your family's budget and make as much progress as possible towards your debt. Cut coupons, hang your clothes to dry, do some mystery shopping, learn to prepare more home-cooked foods, sell stuff on eBay or Craigslist, plan your meals, pick up some freelance work (try eLance), learn to knit, – whatever you can do to decrease your costs and increase your debt payments. You may also consider looking for casual, temporary, or substitute work. Depending on your son's age, you could do child care at a local gym and bring your son, or substitute teach while he is in school, or register with a temporary agency. I can tell that you feel frustrated, but even without working there are usually ways to stretch your dollars a little bit more and make some payments towards your loans. Good luck, and let us know how it goes.

Speak Your Mind

*

Current day month ye@r *