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Student Loan Relief, Higher Ed Benefits for the Military

By U.S. News & World Report

This year, July is Military Consumer Protection month, an awareness campaign to promote good financial education resources for service members and veterans alike, as well as to help guard them against fraud and abuse.

First initiated in 2013 by the Federal Trade Commission as Military Consumer Protection Day, this has since developed into a year-round crusade that not only the FTC supports but also the Department of Defense, the Consumer Financial Protection Bureau and Military Saves.

More than 50 federal and state agencies, attorneys general and consumer advocacy groups observe Military Consumer Protection Month, joining together to support military service members and veterans.

The Student Loan Ranger has discussed some student loan-related military benefits in the past — and now is a great time to provide an overview of all the student loan and other higher education-related benefits available to the military and veterans.

Interest Rate Cap

The Servicemembers Civil Relief Act was enacted during World War II as the Soldiers’ and Sailors’ Civil Relief Act of 1940, which was an extension of a similar act originally passed in 1918. The act was intended to protect military members from the possible negative consequences of being stationed far from home with no real way to manage financial and legal affairs.

The law has been amended many times since its origination and now covers procedures such as civil judgments, including child support cases, garnishments and tolling related to various statues of limitations.

For student loans and other consumer debts incurred prior to service, while the service member is in active duty status, the SCRA limits the amount of interest that can be charged to 6 percent, regardless of whether the previously agreed to interest rate was higher. The interest rate cap will apply if the borrower — or borrowers, in the case of a co-signed loan — or endorser is eligible for the benefit.

[Discover three ways to get academic credit for military training.]

This interest provision applies to both federal and private student loans. As of July 1, student loan holders are required to proactively check the Department of Defense government database to determine whether a borrower may be eligible for the SCRA and then apply the benefit appropriately.

With that said, it’s always a good idea to contact your loan holder to ensure that they received the accurate dates of their eligible service. You can also submit your own eligibility evidence to the loan holder, especially if you don’t feel the dates they are using accurately reflect your service dates.

Deferments

Active-duty service members can also defer their federal student loan payments during their tours. While most can defer those payments for up to 180 days after their active duty has ended, service members who were enrolled in school when called up can defer for a total of 13 months after their active duty end date. This gives them time to re-enroll in school if they so choose.

Unlike SCRA, the loan holder will not automatically place this deferment on your account, so it’s important that you or your borrower’s representative submit a completed application to all your federal loan holders.

The original three-year time limit that applied to this benefit was eliminated in 2007; service members are eligible as long as they are considered active duty status.

Most private loans do not offer deferments specific for military service, but service members should reach out to their loan holders and ask about potential options if they can’t afford their payments while on active duty.

[Know when it’s OK to postpone your student loan payment.]

Public Service Loan Forgiveness

The option to defer student loan payments is nice, but in some cases it may not be the best long-term strategy. Because the federal government pays active duty service members, their service counts as eligible employment under the Public Service Loan Forgiveness Program.

If federal student loan borrowers plan to remain in the military for many years or work for the government, a nonprofit or other eligible employer after they leave military service, using one of the income-driven repayment options may be a much better strategy than deferment.

Service members just need to make sure their loans are federal direct loans before they start the repayment plan or none of their payments will count toward the forgiveness program. As an added bonus, some student loan payments that the DOD made may count toward the 120 needed for the forgiveness program.

[Discover more methods of student loan forgiveness.]

Tuition Reductions and Waivers

In addition to these primarily postcollege benefits, many states offer generous tuition reductions and waivers for service members or veterans who attend their respective state colleges. Some of these discounts also apply to the service members’ or veterans’ family members. Dozens of scholarships are also available for the military.

Although they can be hard to track down, many good benefits are available for the military and veterans. During Military Consumer Protection Month and throughout the year, we encourage all service members, veterans and their families to some time making sure they fully understand their potential eligibility for these student loan options.

More from U.S. News

How Arbitration Helps, Hurts Defrauded Student Loan Borrowers

Understand Student Loan Forbearances, Rehabilitation Payments

Defrauded Student Loan Borrowers May Soon Have Discharge Options

Student Loan Relief, Higher Ed Benefits for the Military originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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