Getting Student Loan Forgiveness for Military Service (a How-to Guide)

Written by: Kristyn Pilgrim
Updated: 2/05/20

You work hard to earn your college degree, but student loan bills loom once you graduate. If you want to give back to your country through public service, you have a great option to have your student loans forgiven.

The process of student loan forgiveness varies depending on the type of public service you perform, but if you remain in a specific beneficent field for several years, you may be eligible to have part or all of your loans forgiven. Your monthly payments may be partially or entirely deferred while you work, too, although this time will not count toward your total needed payments on your loan.

One method for having your student loans forgiven is through military service, which is one of the professions that qualify for the Public Service Loan Forgiveness (PSLF) offered by the federal government. While this program cannot forgive any private student loans you may have, you can qualify for partial or total military student loan forgiveness.

What Is the Public Service Loan Forgiveness Program and How Does Military Service Qualify? 

President George W. Bush unveiled the PSLF plan in 2007, encouraging people who had gone through at least four years of college and taken out federal student loans to apply their skills to a public service position for at least ten years. Jobs in this category include, a position within the federal government, a qualifying nonprofit organization, an important volunteer service, and active-duty military service.

You must also make ongoing loan payments during this time. If you defer your loan payments, this does not count toward the required 120 monthly payments that qualify you for the PSLF military student loan forgiveness option. However, these monthly payments do not need to be consecutive. You can defer your loan payments while you are in a combat zone, for instance, and then begin repayment again when you return from deployment.

The federal government offers several types of help for military service members and their families, including the G.I. Bill, which can help with college tuition; student loan deferment during military service; deferments on student loans after active duty; and the Servicemembers Civil Relief Act (SCRA) Interest Rate Cap, which caps the interest on federal student loans taken out prior to military service at 6% while you are on active duty.

In 2017, about 6,800 active-duty military personnel were enrolled for military student loan forgiveness through the PSLF. This represents about 22% of all commissioned military officers since 2007 who paid for their education with federal loans, personal loans, private funds, and scholarships. About 2,500 of these individuals were in the U.S. Navy and Marine Corps.

Since 2007, 30,091 officers in the military, making up about 23% of the commissioned officers during the decade from 2007 to 2017, earned degrees at institutions that were not part of a federally funded military academy, officer candidate school, or a Reserve Officers Training Corps (ROTC) program funded by the Department of Defense (DOD).

Military Eligibility for Public Service Loan Forgiveness

Working in any branch of the U.S. military is one of the qualifying forms of employment for loan forgiveness, listed under qualifying public services. To qualify under the terms of PSLF, you must:

  • Work full time, based on either your employer’s definition of full time or more than 30 hours per week
  • Have no defaults on the loan in the past
  • Have direct federal loans or direct consolidated federal loans
  • Repay your direct loans through income-driven repayment or standard repayment
  • Make 120 qualifying payments, which may be $0 if you have a qualifying income-based repayment. Deferment or forbearance times do not count as part of the 120 qualifying payments.
  • Serve in the military for 10 consecutive years

The only loans eligible for PSLF are direct federal loans, which may be subsidized, unsubsidized, or consolidated. Direct loans mean that the Department of Education (DOE) is your direct lender, with no third party or middleman managing your loan while you are in school.

Subsidized loans go to eligible undergraduates who demonstrate financial need to cover the costs of higher education, especially if they do not qualify for enough scholarships or grants to cover tuition and other aspects of college. Subsidized loans may have a longer grace period before monthly payment notices begin than some other loans, and the interest may be capped at a very low rate.

Unsubsidized loans also have a good grace period and a lower interest rate. They allow you access to some forgiveness or cancellation programs, but they can be awarded to both undergraduate and graduate students, and they are not based on financial need.

Direct consolidation loans have many benefits after you graduate. If you have taken out several types of federal student loans, you can combine them so you make one monthly payment – with one low interest rate – to one loan servicer over more than 10 years.

If you are in the military and you have taken out any of these direct student loans, you may be eligible for your military service to count toward forgiving some or all of the loan. The only form you need to submit to the government is the employment certification form, which can be found online. The DOE will examine your service to see if you qualify for military student loan forgiveness.

The PSLF Process, Once You Submit Paperwork

Once your loans have been transferred to FedLoan Servicing, check with the loan servicer to determine how many payments you have made. This will help you understand if you qualify for PSLF.

Once you are employed full time by the military and have made 120 qualifying repayments on your student loans, you can fill out of the employment certification form and submit it to the DOE. Once the government receives your form, they will: 

  • Review the information and determine if your student loans qualify for military student loan forgiveness through PSLF. Private loans you have taken out do not qualify for PSLF.
  • Notify you if the form is incomplete or a determination cannot be made
  • Examine your payment history once your military service is determined to qualify
  • Tell you the total number of qualifying payments you have made, so you can determine how long it might take you to complete the 120 monthly payments

Once all of this is complete and the DOE has determined that you qualify for military student loan forgiveness, you must fill out a PSLF application to receive this forgiveness. After that has been processed, the remaining balance of your loan will be forgiven.

Loans forgiven through military student loan forgiveness options via the PSLF are not considered income by the Internal Revenue Service (IRS), so you will not have to pay income tax on that amount.

Other Military Student Loan Forgiveness and Repayment Options

It is important to note that there are many options for military student loan forgiveness, deferment, or repayment with the DOD. These should not be confused with PSLF, which can accept military service, among other types of public service work, to forgive the remainder of loans but will not repay the loans for you.

If you are interested in repayment through time in the U.S. Armed Forces, you should consider the College Loan Repayment Program (LRP), which can benefit: 

  • Active-duty and retired U.S. Army members
  • Army National Guard members who are active duty, full time, drilling, or retired
  • Army Reserve members who are active duty, drilling, or retired

Serving your country through the military can provide several benefits, whether you enlist prior to, during, or after attending college. Military student loan forgiveness through PSLF is one of several potential avenues to paying for a college education, repaying student loans, or reducing interest rates so you can pay less over time.

If you have served in the military but did not perform 10 years of service, you may have other options for repaying your student loans, especially if these loans were taken out after your military service concluded.