GI Bill Benefit Transfers and Student Loan Forgiveness

Know Your Options

Last year, the Department of Defense implemented new rules for the Transfer of Education Benefits (TEB) for the Post-9/11 GI Bill. The grace period is coming to an end, and service members with at least 16 years in the military must comply with the new rules by July 12, 2019, or they will lose the ability to transfer education benefits.

Here’s how TEB will work going forward:

  • Minimum six years in service required for eligibility
  • Must commit to an additional four years of service at time of transfer
  • Service members with more than 16 years of service will no longer be eligible

Prior to this policy change, there was no restriction on when a transfer could take place.

To transfer benefits, visit the milConnect website, log in with your common access card, and select “Transfer Education Benefits (TEB)” under the “Benefits” section. More detailed instructions are available here in the FAQ section.

DEALING WITH STUDENT DEBT

Even after using education benefits like the Post-9/11 GI Bill, many service members and veterans wind up with student loan debt after they graduate. According to Military Times, about 200,000 active-duty service members owe a total of $2.9 billion in student loan debt.

This issue affects civilians and military communities alike, and is a big part of the national conversation right now. Several presidential candidates have recently called for the cancellation of all student loan debt. Whether you support these proposals or not, some simple steps can help you reduce or even eliminate your student loan debt.

DURING ENLISTMENT

First, make sure you understand the protections provided by the Servicemembers Civil Relief Act (SCRA). If you have student loan debt prior to joining the military, as soon as you’re elevated to active duty, the interest rate on student loans is capped to 6 percent. It’s up to you to hold your lender accountable, whether private or federal. And if you decided you don’t want to repay your student loans while on active duty, you can defer payments.

In addition, most branches offer programs that could help. These include the following:

  • The Army’s Loan Repayment Program (LRP), which pays 33.33 percent of your principal balance for three years, up to $65,000
  • The Army Reserve College Loan Repayment Program offers assistance to those in a qualifying Military Occupational Specialty (MOS)
  • Health Professions LRP for doctors, dentists, and other healthcare professionals in the Army and Navy could provide up to $120,000
  • Air Force Judge Advocate General’s Corps, which offers up to $65,000 in repayment assistance
  • Navy Student LRP, which offers up to $65,000 over the course of three years
  • Air Force College LRP is available to anyone enlisting with past student debt
  • National Guard who enlist for a minimum six-year term could receive up to $50,000 in forgiveness

Lastly, although Perkins Loans were discontinued in 2017, you can still qualify for assistance if you utilized the program in the past. These are just a few of the programs at your disposal, so be sure to talk to your financial advisor about your options.

LIFE AFTER SERVICE

There are further opportunities to lower or eliminate your student loan debt after you leave the service. There are several income-driven plans from the U.S. Department of Education, including the Income-Based Repayment Plan. Most federal student loans are eligible for at least one of these plans. The relief scales based on your income and family situation.

There are a few more circumstances that could affect your student loan debt:

  • If you are 100 percent disabled or considered individually unemployable, you have a right to loan forgiveness
  • The Public Service Loan Forgiveness Program could help if you have a public-interest job, like a nonprofit, government, or civilian military position
  • If you’re a school teacher in a low-income school

Be sure to do your homework. Many of these programs require application or enrollment, so it’s up to you to take matters into your own hands when looking for student loan forgiveness.

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