Education/Student Loan questions (SCRA, repayment)

[BADFNZ]

Keep in mind that usually during a deference, your loan is still earning interest. So unless you're dirt poor and cannot make the payment under any circumstances, I'd continue paying it. Just my opinion of course.

[D-ron]

There is a lot of dissimilar information going on in this thread. There are all sorts of different rules regarding deferments depending on which type of loan you have, so it may be that everyone is partially correct. I do know that many loans do not accrue interest when in deferment. Also, for some military deferments, the deferment can be for an indefinite period of time; it's no longer limited to three years, due to the act I mentioned previously. Clearly more research is needed. I EAD in January, so I wasn't planning on looking into this until a few more months, but if I can find some time I will do some research and post my findings here.

[Herk Driver]

There always is alot of different information posted on this subject.

SCRA caps most loans at 6% for obligations entered into prior to entering military service. Some companies have their own policies that are more generous than the SCRA; some do not.

[D-ron]

Here are some snippets I took from the deferment form for my loans. Make sure you check what type of loan you have because some of them aren't charged interest during the deferment.

A deferment is a period during which I am entitled to temporarily postpone making payments on the principal balance of my loan(s). Interest is not

charged during a deferment on subsidized FFEL or Direct Loan program loans, or on Perkins Loan Program loans. Interest is charged during a deferment

on unsubsidized FFEL and Direct Loan program loans.

The Federal Family Education Loan (FFEL) Program includes Federal Stafford Loans (both subsidized and unsubsidized), Federal PLUS Loans, and

Federal Consolidation Loans.

n The Federal Perkins Loan (Perkins Loan) Program includes Federal Perkins Loans, National Direct Student Loans (NDSL), and National Defense Student

Loans (Defense Loan).

n The William D. Ford Federal Direct Loan (Direct Loan) Program includes Federal Direct Stafford/Ford (Direct Subsidized) Loans, Federal Direct

Unsubsidized Stafford/Ford (Direct Unsubsidized) Loans, Federal Direct PLUS (Direct PLUS) Loans, and Federal Direct Consolidation (Direct Consolidation)

Loans.

It says the maximum length is 3 years, but the form is outdated, there actually is no length limit right now as far as I can tell. Can't see any reason why you'd want to defer loans longer than that anyway. You gotta pay them eventually.

A military deferment is available only for:

• Federal Stafford Loans (both subsidized and unsubsidized), Federal PLUS Loans, Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans,

and Federal Perkins Loans, that were first disbursed on or after July 1, 2001, and

• Federal Consolidation Loans and Direct Consolidation Loans, only if all of my Title IV loans included in the consolidation loan were first disbursed

on or after July 1, 2001.

 I may defer repayment of my eligible loan(s) for a maximum of 3 years while I am:

• Serving on active duty during a war or other military operation or national emergency. I must provide my loan holder with a copy of my military orders or a

written statement from my commanding or personnel officer, or I must have my commanding or personnel officer certify Section 4 on this form; or

• Performing qualifying National Guard duty during a war or other military operation or national emergency. I must provide my loan holder with a copy of

my military orders or a written statement from my commanding or personnel officer, or I must have my commanding or personnel officer certify Section 4

on this form.

Unfortunately being in training might make you ineligible. However, SPiF said that he was able to defer his loans during UPT, so maybe loan providers use their own discrection on this one.

Active duty means full-time duty in the active military service of the United States as defined in 10 U.S.C. 101(d)(1), but does not include training or

attendance at a service school.

[spit21fire]

Does anyone know if there is any sort of tuition reimbursement for student loans from the gi bill?

[Carpetbagger]

Just to clarify, if you are a Guardsman/Reservist on title 10 orders for Active Duty for Training (OTS,UPT, etc), SCRA applies to you. If you are a NG on Title 32 orders due to a national emergency, you are covered by SCRA. If you are activated on Title 10 orders, you are covered by SCRA. If you are a member of the ARC, you are also covered during the time period between receipt of the orders, and the day the orders actually begin (Section 106.)

Remember, the intent is to protect servicemembers from hardship, not give them a "free ride." Scenario: A Physician's Assistant who makes $###,### per year is also a TSgt PJ in the Reserves who makes less on AD orders than his civilian job. Scenario 2: A school teacher who makes $xx,### is also a LTC Herk pilot who makes considerably more on AD. For one of these folks, military duty can pose a financial hardship. If a creditor can prove that you have not suffered a financial hardship due to military duty, the 6% rate does not have to be given. VERY FEW creditors will fight that battle, because the burden of proof is on them, and most respect military service anyway.

SCRA Explained

I came through under the previous SSCRA, which became SCRA in 2003, and I never had any problems getting interest rates lowered from creditors or lenders, or terminating a lease early when my PCS orders came through. Loan forbearance/forgiveness is a different animal. See your lender or Dept of Ed rep for more on that (Stafford Loan Repayment Options).

Any of you contemplating leaving the military for federal civilian service, or becoming a dual status employee (ART/Mil Tech), look into the Palace Acquire program, also known as developmental internship or "baby ART" program. Student Loan Repayment is part of the deal up to $10K per year (with some caps that escape me at this time.) THAT is a really good deal!

Edited August 28, 2008 by Carpetbagger

[NHbound]

Revival - anyone else get a fat check from Sallie Mae today? Says it was from a settlement with the DOJ over SCRA violations.

[TheGuardGuy]

Just got one for $4k