Student loans are very common with the high cost of higher education. The average citizen is likely not able to pay for college expenses, like tuition and books, on their own.

Since these loans provide financial assistance, these loans are imperative for furthering education. Both government and private student loans may be available to you. Therefore, it is worth taking the time to learn about the difference between these loan types in order to make an informed decision before you borrow. 

Additionally, active U.S. service members and veterans may qualify for access to additional loan programs as well as loan forgiveness. In order to borrow wisely, it is important to look at the best student loans, repayment options, grants and other options that are available to service members and veterans. 

The Importance of Student Loan Programs

While education is important, it can also be very expensive. Therefore, student loan programs are crucial in providing financial assistance to pay for tuition, book and other education-related expenses. These types of loans are easily qualified for in comparison to traditional loans and, in most cases, have relatively low-interest rates. 

Student loan repayment does not usually begin until after a student has left school or dropped down to a part-time level. Additionally, several types of loans, particularly government loans, offer employment or limited income based deferment and payment reductions until a situation improves. 

Regardless of the type of student loans you intend to apply for, there are several things that you can do in order to lower the amount of debt that you could potentially owe as the more you borrow, the more difficult it is to repay the loan. You can minimize the potential financial burden of student loans by: 

  • Applying for grants and scholarships to potentially reduce the amount you will need to borrow.
  • Work part-time to help pay for some of your education costs while attending school. 
  • Consider less expensive schools as well as in-state education in order to reduce costs. 
  • Cut costs where you can, including through the purchase of used books.

Private Student Loans Vs Government Student Loans

When determining the best student loans, it is important to consider whether you wish to borrow from a private lender or from a government program. However, it is generally not as easy to qualify for a loan through a private lender as it is through a government program. For loans through private lenders, you will need to meet income and credit-related requirements. 

Government loan programs are also considered to be the most affordable option. Loans obtained through government programs include a fixed rate whereas private loans may include a variable one. Interest rates may also be higher on private loans. 

Reviewing VA Government Student Loan Programs

In addition to traditional student loan programs, U.S. veterans and active service members may qualify for assistance through several loan programs. These programs include, but are not limited to: 

Post 911 GI Bill 

The Post 911 GI bill offers monetary educational benefits of up to $22,805.34 of an in-state school’s full tuition amount as well as additional funds that may be used towards books and school supplies. The program also provides qualifying beneficiaries up to 26 months of VA education that can be used within 15 years. The total amount of financial assistance that you can receive will be based upon your qualifications, including the amount of time that you remained in active duty since September 10th, 2001. 

Montgomery GI Bill

The Montgomery GI bill assists with the cost of tuition for qualifying service members and select reserve members. The program requires a minimum service obligation as well as regular payments towards the “Buy-Up Program”. The type of education or training program that you wish to enroll in will also affect your benefit amount. 

Veterans’ Educational Assistance Program (VEAP)

VEAP is designed to assist active duty military personnel with the cost of higher education by matching the amount of money that military personnel put aside from their military pay towards an educational fund. 

Survivors’ and Dependents’ Assistance Program

There are two types of programs offered beneath the Survivors’ and Dependents’ Assistance Program. The first, the Fry Scholarship, offers VA education benefits to the children or spouses of service members that have died in the line of duty after September 10, 2001. 

The second program, the DEA program, provides financial assistance for furthering education to the children and spouses of disabled veteran and service member that have died, are detained by a foreign entity while in the line of duty or are currently missing in action. 

National Call to Service Program

The National Call to Service Program offers several benefits to military personnel who have performed a period of national service that was designated by the Secretary of Defense. Qualifying veterans and service members may either choose financial assistance towards the repayment of an educational loan or a cash out bonus of a smaller monetary amount. 

Qualifying for Student Loan Forgiveness as a Veteran

As a U.S. service member or a veteran, you may qualify for student loan forgiveness as part of the Public Service Loan Forgiveness program. This program provides loan forgiveness to qualifying service members and veterans after 120 qualifying payments. Additionally, veterans who become totally and permanently disabled, regardless of whether or not a disability occurred due to military service, may qualify to have their loan discharged. 

Student Loan Repayment Options for Veterans 

There are several student loan repayment options available to both service members and veterans. In addition to standard repayment options, government loans (and some private loans) may adjust payment amounts based upon income, potentially reducing payments while experiencing a hardship

In addition to income-based repayments, deferments are available for government loans when unemployed or experiencing significant hardship where repayment would cause undue financial difficulties. Military deferments can be applied to both government and private loans.

Deferments are also available while serving in active duty as well as for a period of time immediately after service. While serving in the U.S. armed forces, your existing student loans can be reduced to a zero percent interest rate during the deferment period. This applies to both private and government loans.