Under the Servicemembers Civil Relief Act (SCRA), servicemembers can reduce their interest rate to 6 percent on all pre-service obligations, including student loans, while they are on active duty.
Does SCRA apply federal student loans?
The SCRA interest-rate cap is available for federal and private student loans, for both borrowers and cosigners. Interest on student loans obtained PRIOR to your active duty military service is limited to 6% during periods of active duty. (If there is a change to your existing interest rate it will not exceed 6%.)
What loans does SCRA apply to?
The following types of financial obligations, among others, are currently eligible for the six percent SCRA interest rate benefit: credit cards; automobile, ATV, boat and other vehicle loans; mortgages; home equity loans; and student loans.
Can the military help pay off student loans?
The Army Student Loan Repayment: Active Duty program offers military student loan repayment assistance to people on active duty. … If you qualify, the Army will pay up to 33.33% of your principal balance each year for three years. You could receive up to $65,000 in loan assistance.
Do I have to pay back student loans while in the military?
The Army will repay 33 1/3 percent of the outstanding principal balance, less taxes of the Soldier’s student loans annually or $1,500, whichever is greater, after each year of service (up to $65,000, less taxes) up to three years total.
Does SCRA cover reservists?
The SCRA covers all active duty service members, reservists and the members of the National Guard while on active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after discharge.
Does SCRA apply to DOD civilians?
The SCRA simply does not apply to employees of DOD contractors, nor does this law apply to civilian employees of DOD, the Department of State, the Drug Enforcement Administration, the Central Intelligence Agency, or other federal agencies that send civilian employees to overseas assignments.
Is SCRA a veteran?
Veteran borrowers called up to active duty may be able to request relief pursuant to the Servicemembers Civil Relief Act (SCRA). SCRA is intended to ease the economic and legal burdens on military personnel during their active service.
Are student loans deferred while in the military?
During a period of activity military duty, your student loan lender will let you defer or postpone making payments on your student loan. You can also defer making payments for the 13-month period that follows the end of active duty.