Paying for college is always a concern for students as they transition to the next stage of their lives. For transitioning servicemembers, there are resources available specifically to address education costs. In addition to education benefits earned in conjunction with military service, the U.S. Department of Education and U.S. Department of Defense also offer special student loan benefits and repayment options to eligible members of the Armed Forces.

In the military community, a common misconception about financing higher education is that applying for federal aid is unnecessary for servicemembers, and many believe that the application will yield only student loans. On the contrary, completing a Free Application for Federal Student Aid is actually the first step in exploring other award opportunities that may be available to you. While student loans may be a part of your financial aid package, they are often not the only element.  

You're not required to accept the loans you are offered, and you may elect to reduce the amount borrowed if you choose. Additionally, grants are often awarded to those students who demonstrate financial need, and many scholarships require a FAFSA application for consideration. The Federal Pell Grant, for example, may be used concurrently with GI Bill® or tuition assistance benefits. Because you are not required to repay these resources, grant and scholarship funding can be valuable additions to your TA or GI Bill funding. Visit UMUC's Scholarship page to search for scholarships specifically for military students and learn more about the application process.

In certain circumstances, it may be necessary to apply for student loans and, in these situations, federal loans are often offered at a lower interest rate than corresponding private loans. Repayment options are generally more affordable and can be based upon your income as it fluctuates annually (sometimes as low as $0 per month). You can even postpone federal loan repayment during or following periods of active duty.

Servicemembers are also eligible for Public Service Loan Forgiveness. PSLF is a program that forgives the remaining balance on federal direct loans after ten years or 120 qualifying on-time payments. The program requires that you are employed full-time at a qualifying government or non-profit agency (military service included) while making your payments.

Other lesser-known benefits for servicemembers include:

  • Servicemembers Civil Relief Act interest rate limits, which cap interest on both federal and private loans obtained prior to military service at six percent during periods of active duty.
  • A zero percent interest rate for up to 60 months while you are serving in a hostile area that qualifies for special pay.
  • The HEROES Act waiver, which defers many of the documents required for federal student loan benefits while you are on active duty.
  • Certain circumstances in which the DoD will repay a portion or all of your loans based on your branch of military service. Contact your military personnel officer for details.
  • If you have a service-related disability, you may qualify for a Total and Permanent Disability (DPD) discharge of your student loans. Documentation from the VA will be required.

For additional information and resources, please reference this guide to military student loan benefits

The 2017–2018 FAFSA is still open for Spring 2018, and the 2018–2019 FAFSA is now available. To learn more about how you can take advantage of these resources and secure the best possible education or to get your financial aid questions answered, e-mail UMUC's Financial Literacy Team.