Not all Army recruits who are interested in educational benefits are looking to find a way to pay for a program they will be taking in the future. There is a program available for grads who are looking for help to pay for the student loans they took out to pay for their already completed education. The Army Loan Repayment Program (LRP) can help some soldiers manage the costs of student loan debt accrued before entering the Army.
Army Student Loan Repayment Program Overview
The Loan Repayment Program (LRP) is offered by recruiters as a special incentive to prospective soldiers. It pays up to $65,000 in student loans for highly qualified individuals. Examples of loans which may be repaid under the Loan Repayment Program are as follows:
- Stafford Loans
- Perkins Loans
- Parent Loans for Undergraduate Students (PLUS)
- Supplemental Loans for Students (SLS)
- William D. Ford Loans
Consolidated loans incurred to pay for the soldier’s education may be paid for under LRP.
Army Student Loan Repayment Program Eligibility
To be eligible to receive LRP benefits, a recruit must meet a number of qualifications. He or she must be enlisting in the Service for the first time and must hold a high school diploma. A soldier who wishes to receive LRP benefits must specifically decline enrollment in the Montgomery GI Bill in writing. LRP must be guaranteed in writing in the enlistment contract.
The loan must have been advanced to the recruit under the provisions of the Higher Education Act of 1965, Title IV, Part B, D, or E. The loan must have been taken out before the start of the soldier’s active duty service.
This program is available to recruits who agree to enlist in a critical MOS (military occupation specialty). These are positions the Army is particularly interested in filling, and job titles are updated on a quarterly basis. The staff at local recruiting offices have access to a current list.
Armed Services Vocational Aptitude Battery Test
A prospective soldier who would like to be considered for the LRP must also have achieved a grade of at least 50 on the Armed Services Vocational Aptitude Battery (ASVAB). Achieving a score of 50 represents the 50th percentile, which indicates that the person scored as well as half of all test-takers. (The standard for admittance to the Army for a soldier who will not be applying for LRP is 31.)
This is multiple-choice test which is administered to prospective servicemen and women. The test may be given to high school students, but a person who attains a high marks on it is not required to enlist in the Armed Forces. It is used to determine whether a person has an aptitude for performing well in the Army or other branch of the Service.
The ASVAB is made up of nine sections:
Army Student Loan Repayment Entitlement
Under the Army Loan Repayment plan, an enrollee will qualify for a payment of $1,500 or 33 1/3 of the percent of the unpaid principal amount owing on the student loan, whichever is greater, for each year of active duty service completed. Accrued interest on the outstanding student loan will not be paid under the LRP. The maximum amount which will be paid on the soldier’s behalf is $65,000 and payments are forwarded directly to the lender.
Payments received under this plan are taxable in the year the payment is made. Some soldiers, particularly those who start their active duty service between November and February, may receive two payments in one year.
Army Student Loan Repayment Limitations
Not all student loans are eligible for payment under this program. The following are examples of loans which do not qualify under LRP:
Army personnel are specifically barred from receiving Loan Repayment Program and Montgomery GI Bill (MGIB) benefits for the same period of service. Any student loans taken out after the start of active duty service will not be paid under this plan.
The Army will not allow a person who has defaulted on a student loan to enlist. Student loans which are in default will not be paid for under LRP.
The Army Student Loan Repayment Program offers a generous benefit for qualifying soldiers. Someone who has incurred student loans and who agrees to enter the Service to fill a critical need position can get hep to pay off the principal over a three-year period, up to the Program’s limit.