7 Ways to Protect Your Identity While on Vacation

Summer vacation season is here, and if you’re traveling far from home, you probably want to do all you can to make sure your wallet or purse doesn’t end up in the wrong hands.  But according to a recent Experian ProtectMyID survey, 30% of travelers have experienced identity theft while away from home or know someone who has.

It’s best to take steps now to keep control of your sensitive information.  Here are some ways you can take to protect yourself on your next trip.

1. Sign up for bank fraud alerts.

Gary Devan of San Diego says he signed up to receive texts from his financial institution so that he’d be immediately notified of unusual or suspicious activity in his accounts, like unusually large purchases.

“If alerts are available on your accounts, you can receive them even while on vacation,” he says.

Devan has good reason to want to avoid an account breach — he happens to be the chief information officer where he banks, Mission Federal Credit Union. He hasn’t experienced any noteworthy issues, but says the fraud alert service gives him peace of mind while traveling.

2. Be careful surfing on public Wi-Fi spots.

Hackers may be able to access public networks and see any information you send over them, including bank account numbers, logins and passwords, says Jason Glassberg, co-founder of Casaba Security, a computer security firm in Redmond, Washington.

Glassberg suggests skipping Wi-Fi while traveling, unless you use a virtual private network.  “If you don’t have a VPN, stick with a cellular signal, as it’s much safer,” he says.  “For a laptop, you can hotspot your phone to connect over cellular.”

Cellular text-messaging and VPNs are good alternatives, but the reality is, you may still choose to use public networks to surf the Web, especially if you’re not sending sensitive data over Wi-Fi. If that’s the case, it’s a good idea to set your device to forget that network when you log off.  That way, it won’t automatically log back on to it the next time you go online.

3. Install phone-tracker software.

If your device goes missing, you may be able to use “find my phone” or similar software to pinpoint its location and retrieve it. If that’s not possible, some apps could erase all the data on the device, so it won’t get into the wrong hands. Another way to help prevent data theft is to lock the screens on your electronics.

4. Keep your purse or wallet secure.

If you carry a handbag, try to keep it in front of you, so it’s not an easy mark for thieves.  If you have a wallet, try to secure it as well. “I keep mine in a zipped pocket or travel pack,” Devan says.

Another idea is to wrap the wallet in a rubber band or other coarse material so that it won’t easily slide out of your pocket.  In addition to securing your belongings, it’s also a good idea to be aware of your surroundings and try not to become distracted.

5. Be careful around ATMs.

“Look at them before you swipe. Check for loose housing, exposed wires, bulkiness and anything that looks out of ordinary,” Glassberg says. Those are all signs that a thief may have installed a skimmer on the machine, which could lift the data from your card, he says.  Also, try to use a bank branch or merchant you trust when withdrawing cash.

6. Watch out for fake front desk calls.

Say you’re staying in a hotel and someone calls your room, says he’s from the “front desk” and needs to verify your credit card number. Don’t think you have to share your information immediately. You could say you’ll call back and then hang up. Then, you can call the front desk using the number you have in your records and ask the staff if they really need this information. If not, you may have just avoided an identity theft attempt.

7. Leave your important financial files at home.

Social Security cards as well as credit and debit cards that you don’t plant to use on the trip can stay behind. The fewer sensitive documents you have, the fewer chances that they could be stolen.

Despite your best efforts, if you find that your identity has been stolen, it’s important to report it quickly to your financial institutions and the local police.

Your summer vacation should be a time for relaxation, so take steps now to avoid crossing paths with a thief or hacker. By using these tips, you could lower the odds of having your identity stolen and boost your chances of having more fun in the sun.

Margarette Burnette is a staff writer at NerdWallet, a personal finance website. Email: mburnette@nerdwallet.com. Twitter: @margarette

This article originally appeared on NerdWallet.

Image by Maksim Kostenko via 123RF Copyright: <a href=’https://www.123rf.com/profile_maximkostenko’>maximkostenko / 123RF Stock Photo</a>

Here’s Exactly How Student Loan Interest Works

Back when you signed the dotted line and took out your student loans, how well did you understand the terms? Maybe things were a little fuzzy, but you knew you needed the loans to pay for college.

Student loan interest is one of the more complicated aspects of student loans. How interest rates are set, how interest accrues, and how payments are divided between your principal balance and interest charges can be difficult to grasp.

But understanding how student loan interest works is an important step in managing your debt.

How does student loan interest work?

When new student loans are issued, the borrower signs a promissory note that explains the terms of the loan. Every part of this document is important to read and understand, as it determines how much you owe and when your payments are due.

The most important terms to look out for are:

  • Issue date: The date your loan starts to accrue interest
  • Amount borrowed: The total amount borrowed in each loan
  • Interest rate: How much you have to pay to borrow the funds
  • How interest accrues: Whether interest is charged daily or monthly
  • First payment date: When you have to make your first loan payment
  • Payment schedule: How many payments you have to make

Lenders understand that most full-time students do not have an income, and if they do, it is not enough to cover student loan payments while in school. Because of that, many student loans are subsidized by the federal government. That means you do not accrue interest while still in school.

Unsubsidized loans, meanwhile, charge interest from the day the loan is issued.

Why is this important? Knowing whether your loans are subsidized or unsubsidized tells you if your balances will grow while you’re in school.

How is student loan interest calculated?

Your required loan payment will be the same each month. However, when you make a payment, interest is paid first. The remainder of your payment is applied to your principal balance.

Student loan interest is typically compounded daily. That means your interest rate is divided by the number of days in the year and you are charged each day based on the outstanding balance.

To understand how compound interest works, let’s look at an example. Consider a Direct loan with a $10,000 balance and a 4.29% interest rate.

If this loan were compounded annually, 4.29% of the loan balance would be charged each year. In this case, the interest would be $429 per year.

If your loan compounds daily, you’ll instead be charged interest every day. Your 4.29% interest rate will be divided by 365. That comes out to 0.0118% of interest each day. Assuming a $10,000 balance, that is $1.175 per day.

If you make your payment on the regular schedule once per month, the interest you accrued over the month is added up. Your payment is applied to that accrued interest, which comes out to about $35 in our example. The rest of your payment lowers your outstanding principal balance.

How is student loan interest applied?

As you make payments on your student loan, your balance and the amount of interest you accrue will drop. With lower interest charges, more of your payments are applied to your principal. Over the life of your loan, your interest paid will decline each month, which accelerates your principal payment. That’s how amortization works.

Remember, interest is always paid first. If you have an unsubsidized loan or are past the subsidy period, your loan payoff date requires you to make the same minimum payment each month. If you are on a payment plan or have deferred payments, interest will continue to accrue. This amount is added to your principal, increasing your student loan balance.

If you are able, you should always pay at least the interest each month. If you don’t, your loan balance will continue to grow and you will owe interest on the interest you didn’t pay in previous months.

Further, making partial payments will count as a missed or late payment on your credit report and may cause you to go into loan default, which is not a good thing.

If you are struggling to make payments and can’t figure out a way to afford them, you can look into an income-driven repayment plan. The REPAYE program, for example, limits your payments to 10 percent of your discretionary income.

This loan payment calculator can quickly tell you how much of your payments are going toward interest and principal each year.

How are extra student loan payments treated?

When you make your monthly payment, you are given the option to pay extra. If you do, that extra payment is applied directly to the principal, which will reduce your interest in the future.

Any other extra payments made throughout the month are treated as normal payments. That is, your payment is first applied to interest you accrued since your last payment and then your principal.

Don’t underestimate the power of early payments. Paying an extra $50 or $100 each month can save you thousands of dollars in interest depending on your loan terms. Check out the student loan prepayment calculator to see how much you can save by paying a little more every month.

When I was still making student loan payments, I lived on a budget that allowed me to make a full payment each payday. Paying double each month helped me pay down my balances quickly, and I was able to make my final payment exactly two years and six days after graduation.

Compound interest is a powerful weapon

As some believe Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

Putting off payments or just making the minimum each month will leave you with a big interest cost over the life of your loan.

Use your new knowledge of compound interest to pay off your loans early. You work hard for each paycheck. Pay more today so you can save big later.

Get your student loan interest quickstart guide PDF

The article Here’s Exactly How Student Loan Interest Works originally appeared on studentloanhero.com.

Ask Brianna: How Can I Lessen the Financial Pain of Moving?

“Ask Brianna” is a column for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna@nerdwallet.com.


This week’s question:

“I’m moving out of state, and I’m afraid the process will be really expensive. How can I move cheaply while making sure my stuff arrives intact?”

You’ve come to the right place: My dad has been in the moving industry for 47 years. I know when you need a hand truck instead of a dolly, and that among a mover’s greatest frustrations is that every customer underestimates how much stuff he or she has.

Paying for a move can be harder than packing and hauling your stuff. Hiring professionals is a good idea if you have a lot of furniture or fragile items. But a one-bedroom professional move from Chicago to Boston with no packing services could cost between $2,177 and $2,923, according to Moving.com. If you don’t have that much saved, you might be tempted to put the bill on a credit card, but interest charges would make it even more burdensome.

There are ways to cut that cost or avoid it altogether. Pack a rental van if you’re comfortable driving it or have a friend who is, and if you’ll have help carrying the big stuff. Or limit yourself to what fits in your car and accumulate Craigslist furniture once you arrive.

Here’s how to move without going broke.

Time it right

If you use a professional moving service, avoid the popular summer months and the last weekend of each month, when prices often are higher. Compare at least three estimates from local, reputable movers, says Scott Michael, president and CEO of the American Moving and Storage Association.

If you’re moving across state lines, for example, look up companies using the Federal Motor Carrier Safety Administration’s Protect Your Move search tool. You can view whether the company is registered with the Department of Transportation and insured, and you can see if it has a history of consumer complaints.

Be wary of lowball offers, Michael says, which could lure you into a bait and switch with an unscrupulous company and end up costing you more.

Ask the companies whether you’ll pay less if you shift your dates. A company may charge less on certain days or weeks based on its workload, Michael says.

Lighten the load

The cost of long-distance moves usually depends on the weight of the shipment and the number of miles to the destination, Michael says. Even if you move a short distance or without professional help, downsizing makes the move less pricey. (With a moving man for a dad, I’ve become ruthless at regularly culling my clothes and knickknacks, always ready for the next move.)

Lina Rosenberg, 25, has moved across states three times in the past two years, largely by driving herself in her car and choosing partially furnished apartments. She says it’s smart to donate excess clothing, store out-of-season clothes at a friend’s home for pickup later and leave bulky furniture behind. But don’t get rid of kitchen items, she says. They don’t take up much packing space, and they can be costly to replace.

Pack and ship cheaply

Packing your own items will save you money whether or not you hire movers. You don’t need to buy boxes. Rosenberg suggests reusing boxes from liquor stores: They’re sturdy and small, which means you can’t make them too heavy to carry.

For items that can’t fit in your car, consider Amtrak or Greyhound. They offer shipping services that can be cheaper than package delivery companies or the Postal Service. Rosenberg once shipped a bicycle by train using Amtrak Express Shipping. (You’ll have to drop off your boxes at an Amtrak station, then pick them up at your destination.) Compare quotes using your individual shipping load and timeline.

Take the tax deduction

Moving for a new full-time job may mean gaining access to a generous, slightly under-the-radar perk: a tax deduction for moving expenses. You can lower your taxable income by the amount it costs to move your stuff, your car and yourself to your new home.

But you have to meet some specific requirements to get the deduction. Your new job must be at least 50 miles farther from your previous home than your old job was. The expenses must take place within a year of starting work in your new location. And you can’t take the deduction if your employer reimburses you for moving expenses. When you meet those criteria, the stress of uprooting your world might be happily overshadowed by the money you save.

Brianna McGurran is a staff writer at NerdWallet, a personal finance website. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe.

This article was written by NerdWallet and was originally published by The Associated Press. 

The article Ask Brianna: How Can I Lessen the Financial Pain of Moving? originally appeared on NerdWallet.

5 Ways Marriage Affects Your Student Loans

Marriage legally binds you to your spouse — but that doesn’t mean saying “I do” to another set of student loans. Each of you remains responsible for loans you took out before your wedding. But marriage can affect your loan payments, loan-related tax breaks and ability to pursue other financial goals. Here’s how.

1. Your monthly payment could increase

Federal loan borrowers can enroll in one of four income-driven plans to lower their monthly payments. One, the Revised Pay As You Earn plan, determines married borrowers’ payments based on their combined adjusted gross income and loan debt, no matter how they file taxes. This usually means a higher monthly payment.

But married Pay As You Earn, Income-Based Repayment and Income-Contingent Repayment enrollees who choose the tax status “married filing separately” pay based on their individual incomes. Filing separately, though, means missing out on tax breaks joint filers receive.

“We run both scenarios just to see what the tax liability will be for both of them, and I have yet to find a situation that ‘married filing separately’ is better,” says Ara Oghoorian, a financial planner and owner of ACap Asset Management in Encino, California. Ask your tax preparer to check your tax bill for both options.

2. You could lose the student loan interest deduction

The student loan interest deduction lets you deduct up to $2,500 of student loan interest paid in the previous tax year from your taxable income. But if you and your spouse together earn more than $160,000, you’ll lose the deduction. You can’t claim it at all if you file separately.

3. Your spouse’s payments could affect your finances

If you co-sign your spouse’s private student loan, you’re legally responsible for repaying it if he or she can’t. The loan will also appear on both of your credit reports, where it could impact your ability to take on new credit or debt, such as a mortgage.

And if your spouse takes out a student loan during your marriage and then defaults, creditors in some states can go after both of your wages and assets — or, if you file jointly, your tax refund.

4. Your spouse may chip in on payments

If you and your partner decide to help each other repay your loans, consider creating a written agreement outlining the terms. It’s not an official document unless you have it drawn up by a lawyer, but it could help you avoid arguments in the future, especially in case of a divorce if one spouse depends on the other for financial help.

But remember: “The other spouse may agree to pay on the loans of his or her spouse, but the federal government doesn’t care about that because the loans remain only in the borrower’s name,” says Adam Minsky, a Boston-based lawyer specializing in student loans.

5. You may be responsible for debt after divorce

Debt you bring into a marriage typically remains your own, but loans taken out while married can be subject to state property rules in divorce. And if one spouse co-signs the other’s private student loan, he or she is legally bound to the loan until obtaining a co-signer release from the lender.

To avoid post-divorce legal squabbles over student debt, couples can create a prenuptial or postnuptial agreement. But these agreements have limitations.

“Too often people think it will get them out of paying the debt and it’s not going to do that,” Minsky says. “But if the couple is concerned about a worst-case scenario and have agreed to do something in private that differs from the student loan agreement, then putting that in writing would be possibly really important down the line.”

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article 5 Ways Marriage Affects Your Student Loans originally appeared on NerdWallet.

Image by sheeler via 123RF Copyright: <a href=’https://www.123rf.com/profile_sheeler’>sheeler / 123RF Stock Photo</a>

You’re Losing Money With Unsubsidized Federal Loans – Here’s What You Can Do

If you have federal student loans, do you know if they are subsidized or unsubsidized? Are you unsure?

It’s important to know what type of student loans you have: Direct Subsidized Loans, Direct Unsubsidized Loans, or even a mix of both. That’s because the interest on unsubsidized loans accrues differently than interest on subsidized student loans. This can end up costing you more if you’re not careful.

Knowing if you have unsubsidized or subsidized loans can help you make smarter repayment choices and properly prioritize repayment. You can make the right moves to avoid interest on unsubsidized loans, and get the most benefit out of subsidized loans.

How interest on unsubsidized loans costs more

The main difference between an unsubsidized loan and subsidized loan is how and when each accrues interest. Both types of federal student loans carry the same interest rates for undergraduate students. But interest on unsubsidized loans can cost you more.

The initial interest costs on unsubsidized loans

Repayment of all federal student loans defers automatically until six months after you graduate or are no longer enrolled in college.

During this period, the federal government covers all accrued interest costs for subsidized federal loans. Interest on unsubsidized loans, however, starts accruing right away. And this accrued interest is capitalized (meaning added to your balance) before repayment begins.

By the time you graduate, you could owe significantly more than you borrowed.

Let’s look at an example of two students who each borrow $5,000 a year at 4% to cover college costs, and graduate in four years. One student has access to subsidized student loans, and the other only borrows through unsubsidized student loans.

By maximizing the subsidized student loans available each year, Student B avoids most interest charges. She owes $2,420 less by the time she enters repayment than Student A – despite the fact the each initially borrowed $20,000 in student loans. And because of her higher initial balance, Student A will pay $520 more in student loan interest over 10 years of repayment.

In all, choosing to maximize her subsidized student loans will save Student B $2,940 in interest, compared to Student A.

That’s assuming repayment goes off without a hitch. Subsidized loans can also help you if you need to defer student loans after entering repayment.

Unsubsidized loans accrue interest in deferment

While unsubsidized loans almost always continue to accrue interest, subsidized loans won’t accrue any interest during deferment. This includes deferment after entering repayment, such as unemployment deferment.

Other common reasons for deferment include:

  • Returning to college to earn another degree
  • Unemployment
  • Economic hardship
  • Active duty military service
  • Service in the Peace Corps

If you need to defer student loans for any of the above reasons, unsubsidized student debt will cost you more than subsidized loans.

For instance, let’s say that two years into repayment, both Student A and Student B find themselves unemployed. They choose to defer their student loans to help make ends meet while they search for new jobs.

Here’s how a one-year unemployment will affect each person’s student loan debt:

Student A Student B
Balance after two years of repayment $18,938 $16,928
Balance of unsubsidized loans $18,938 $1,977
Interest accrued $758 $79
Balance after deferment $19,696 $17,007


Once again, Student B’s subsidized loans help her save hundreds by avoiding student loan interest – in this case, $679. Add that to her initial savings, and she’s now $3,619 ahead of Student A on student debt.

The federal student loan interest subsidy will also kick in if you’re on an income-driven repayment plan with payments lower than your monthly interest charges.

How to pay less interest on unsubsidized loans

Overall, unsubsidized student loans will accrue more interest and cost you more than subsidized student loans. Unfortunately, there’s no real way to get around these interest charges.

However, if you have a mix of subsidized and unsubsidized student loans, prioritizing payments can help you avoid or minimize interest payments. And even if you have only unsubsidized student loans, these strategies can still help you get ahead of interest:

1. Find out what types of federal student loans you have

First, you’ll want to make sure you know which loans are subsidized and which aren’t. If you don’t have the information readily available, try contacting your current student loan servicer. You might even be able to find that information yourself if you have an online account with your servicer.

You can also request your financial aid history from the National Student Loan Data System (NSLDS). This report will display a full list of all your student loans and other educational aid, including details about the type of loan and whether it is unsubsidized.

2. Repay unsubsidized loans first

Paying extra on student loans is a smart way to shave years off your repayment period and save hundreds (and potentially thousands) of dollars in interest. If you can sacrifice now to pay extra on your student loans, you’ll definitely get ahead and save.

When you’re deciding which student loans to pay off first, consider prioritizing your unsubsidized student loans over any subsidized loans. Because interest on unsubsidized loans is always accruing, these student loans carry a (slightly) higher risk and cost than subsidized loans. This means that they might be worth targeting and getting rid of before your subsidized loans.

3. Only defer subsidized loans

Should you need to defer student loans at any point, do so strategically and defer only your subsidized student loans. This will pause payments without accruing interest or increasing your balance.

If possible, avoid deferring your unsubsidized loans. Continue repaying these as normal or pay only the interest that accrues each month. This will help you keep up with your balance and avoid slipping further into debt.

4. Look into refinancing unsubsidized student loans

Because subsidized student loans have more protections than unsubsidized student loans, you have more to lose by refinancing these from federal to private student loans.

Unsubsidized student loans, on the other hand, might be a good option to refinance. In return, you could gain a better student loan rate and terms that fit your needs.

Whatever you decide, it’s important to have a plan of attack in place so you can pay down your student loan debt as quickly as possible, which will save you money in the long run.

The article You’re Losing Money With Unsubsidized Federal Loans – Here’s What You Can Do originally appeared on studentloanhero.com

What To Buy (and Skip) in July

July is here, and as temperatures rise, you can expect prices to drop on popular products.

Make the most of midsummer sales with our guide to what you should buy (and skip) during the month of July.

Buy: Patriotic items

Each year around July 4, stores pledge allegiance to the red, white and blue with sales on just about everything that has stars and stripes on it. Expect clothing discounts at department stores and decoration discounts at party supply shops. Wait until close to the holiday to buy your items at the best possible price.

Some stores extend their sales to other products. Last year, we located Fourth of July deals on food, appliances, mattresses and more. Keep your eyes peeled for star-spangled savings.

Skip: Back-to-school supplies

We know: While you’re working on your tan, school is the last thing you want to think about. And you don’t have to. Retailers begin their back-to-school sales as early as July, but you’ll save more if you don’t buy your backpack or laptop just yet. School-oriented deals historically reach their peak in late August and early September, when stores are more motivated to clear shelves.

In August 2016, for example, Best Buy offered up to $100 off select Dell computers. Carter’s took up to 50% off school apparel styles, and Wayfair dropped dorm supply prices by as much as 70%.

Buy: Summer apparel

By July, tank tops, shorts and flip-flops have been on display for several weeks — and in some cases, several months — so it’s finally time to stock up.

By this point of the season, don’t settle for anything less than a sale price on summer apparel. Look for storewide discount events and coupons specifically for clothing departments. Designer brand Coach, for instance, has already launched its Summer Sale, as have apparel and accessory shops Forever 21 and Old Navy. And July 21 marks the beginning of Nordstrom’s anniversary sale.

Skip: Lawn mowers

July isn’t an ideal time to purchase large, outdoor items, such as lawn mowers. After all, you aren’t the only one thinking about tending your yard, and higher demand traditionally means higher prices.

By the time August and September roll around, outdoor items will see steeper discounts, so hold off for another month or two.

Buy: Travel

July’s a great time to book your travel — as long as you’re planning a trip for later in the summer. On average, buying a flight for August travel will be 7% cheaper than buying one for July, according to a 2017 report of expected daily flight rates by CheapAir.com, an online travel agency.

If you absolutely have to fly this month, CheapAir recommends traveling on Tuesdays and Wednesdays instead of weekends. And July 4 flights are expected to be more affordable than flights on the days before and after.

Bonus: Black Friday in July

If last year is any indication, expect Black Friday-esque deals this month in an assortment of categories, such as apparel and electronics. Retailers often offer these discounts in an attempt to boost typically sluggish summer sales — but they can also spell real savings for consumers.

Last year, Amazon hosted its second annual Prime Day on July 12, with limited-time deals on products across the site. Walmart, Target and Forever 21 have hosted Black Friday in July blowouts in past years.

Keep an eye out for similar midsummer blowout sales again this year. They could be a solid opportunity to buy things you’ve been holding off on for a while.

And … ice cream

July 16 is National Ice Cream Day. Use it as an excuse to indulge in your favorite flavor. If you work it right, you can get your cone on the house.

Last year, some ice cream shops offered free or discounted treats. PetSmart PetsHotel locations even gave dog-friendly ice cream to four-legged friends. You’ll usually be able to find promotional announcements and coupons on social media.

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: courtney@nerdwallet.com. Twitter: @courtneynerd.

Updated June 23, 2017.

The article What to Buy (and Skip) in July originally appeared on NerdWallet.

Image by sean824 via 123RF Copyright: <a href=’https://www.123rf.com/profile_sean824′>sean824 / 123RF Stock Photo</a>

Complete Guide to Military Student Loan Forgiveness and Repayment

When Deborah Rykers graduated from college in 2008, she didn’t think she would spend eight years of her life in the United States Air Force. As an education graduate, that wasn’t her plan.

“An opportunity came my way, and I was recruited by a friend of mine,” said Rykers. “It was the best eight years of my life, but I wasn’t prepared to come back to civilian life, especially with the student loans I had taken out for my teaching degree.”

For many like Rykers, military enlistment can open up doors of opportunity and provide a fulfilling career. But one of the biggest drawbacks is being isolated from real world financial responsibilities like student loans, Rykers explained.

Rykers isn’t the only service member burdened with student loans. A 2012 study found that 41 percent of armed forces members held student loan debt, according to Reuters. Given the increase in student loan debt since that time, that number could be even higher today.

But there is good news for both active duty servicemen and veterans. Military student loan forgiveness, repayment relief, and refinancing options are available to those who qualify.

Here’s a list of options for military student loan repayment and forgiveness that will help you get out of debt fast.

Military student loan repayment assistance programs

What’s better than lower monthly payments or a reduced interest rate? How about no student loans at all?

There are several military student loan repayment assistance programs that can help eliminate some or all of your debt.

Army Student Loan Repayment: Active Duty

The Army Student Loan Repayment: Active Duty program offers military student loan repayment assistance to people on active duty. Among other requirements, you must enlist for at least three years and score 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB).

If you qualify, the Army will pay up to 33.33 percent of your principal balance each year for three years. You could receive up to $65,000 in loan assistance. Note that you can only use this money to pay off federal student loans, such as Direct, FFEL, and Perkins Loans. Private loans aren’t eligible.

Army Reserve College Loan Repayment Program

If you’re in a qualifying Military Occupational Speciality (MOS), you could get assistance through the Army Reserve College Loan Repayment Program. You must enlist for at least six years and have loans before you go on active duty.

This program will pay 15 percent of your loan balance for up to $20,000. It applies primarily to federal student loans, not to private ones.

Health Professions Student Loan Repayment Program

The Health Professions Loan Repayment Program helps doctors, dentists, and other healthcare professionals on active duty or in the Army Reserve. Qualifying borrowers can receive up to $40,000 per year for up to three years. This $120,000 in military loan forgiveness could go a long way toward paying off medical or dental school loans.

Prior Service Soldier Loan Repayment Program

Army Reserve soldiers with prior military service can receive up to $50,000 toward student loan payments. You can request more information about student loan forgiveness for veterans through the U.S. Army website.

National Guard Student Loan Repayment Program

Members of the National Guard could receive up to $50,000 in military loan forgiveness. You must enlist for a minimum six-year term of service.

Navy Student Loan Repayment Program

If you’re in the Navy, you could receive up to $65,000 in student loan repayment assistance. The Navy program helps sailors in the first three years of service.

Air Force College Loan Repayment Program

The Air Force College Loan Repayment Program (CLRP) is available to any person enlisting with past student loan debt. It awards up to $10,000, made in yearly payments of 33.33 percent of the debt or up to $1,500 — whichever is higher.

Air Force Judge Advocate General’s Corps Loan Repayment Program

If you join the Air Force Judge Advocate General’s (JAG) Corps, you could get up to $65,000 in student loan repayment assistance. You’ll receive payments over a three year period after your first year of service as a JAG officer.

Military student loan forgiveness and discharge programs

Loan repayment assistance programs give you money to help pay off your student loans, but forgiveness and discharge programs get rid of your loans completely. Below are three options for military student loan forgiveness and cancellation.

National Defense Student Loan Discharge

The National Defense Student Loan Discharge is designed to help those who have put their lives on the line for their country. To qualify, you must have served at least one year in an area deemed imminent danger or in direct fire and have a Perkins or Direct student loan.

The application for the discharge includes a Department of Defense form and a letter explaining why you believe you qualify sent directly to the servicers of your loan. The amount discharged is partial and varies, so it is best to contact your loan company.

Veterans Total and Permanent Disability Discharge

For those who have sacrificed so much, the Veterans Total and Permanent Disability Discharge is there to release you of your loans. To qualify, you must have a service-related disability documented by the Department of Veterans Affairs and been deemed permanently disabled. Most loans are eligible for military student loan forgiveness through this program.

Public Service Loan Forgiveness

Service to our country qualifies borrowers for one of the most popular student loan forgiveness programs — Public Service Loan Forgiveness. This program forgives all student loan debt after the borrower makes 120 qualifying payments while working full-time with the military or another qualifying non-profit.

Note that deferred payments do not count towards the 120 monthly payments and might extend your timeline to receive PSLF.

Other options for managing your student loan debt

Beyond military student loan forgiveness and repayment assistance, you have other options for making your student loans more manageable. The four approaches below can reduce your interest rate or lower your monthly payments. If you’re dealing with a lot of student debt, these four strategies could help ease the burden.

Cap interest through the Servicemembers Civil Relief Act (SCRA)

The Servicemembers Civil Relief Act could provide some relief from student loan debt. This act caps the amount of interest that can be collected on an active duty service person’s debt at 6.00%. This is especially good for borrowers with high-interest private loans, which often have higher rates than federal student loans.
For example, using our student loan payment calculator, a $20,000, 10-year loan at 8.5% interest has a monthly payment of $247. With the rate reduced to 6%, the monthly payment is lowered to $222. That’s a savings of $3,112 over the 10-year period. Apply those savings as extra payments on your loan and, you’ll cut a full year from your repayment plan.

To qualify for this benefit, your loans must be more recent than August 14, 2008. Contact your loan servicer for information about SCRA eligibility.

Defer your student loans while you’re on active duty

If you’re currently serving, your monthly payment doesn’t have to be a burden. The Department of Education allows you to defer your student loan payments during active duty service and 13 months after your return (or until you return to school with at least half-time status).

During this time, the government will pay the interest on your Federal Perkins, Direct Subsidized, and Subsidized Federal Stafford Loans while the principal is delayed. While you won’t pay your loans off any faster, you also won’t have to worry about accruing interest while your payments are paused.

This is not the case for unsubsidized loans, however. If you have an unsubsidized loan, you might benefit from using a student loan deferment calculator to see the amount of interest you will accrue while in deferment.

Lower your monthly payments with an income-driven repayment plan

Another way to manage your monthly payments is to apply for an income-driven repayment plan. These plans take into account your current discretionary income and family size in order adjust your monthly payments accordingly. In some cases, your new monthly payment could be as low as $0.

For example, Income-Based Repayment is one of the most popular plans. It limits your monthly payments to 10 or 15 percent of your discretionary income and results in forgiveness of any remaining debt after 25 years.

Overwhelmed by the thought of all the paperwork required to maintain enrollment? That’s where the Heroes Act Waiver comes in. With HAW, you’re not required to submit applications or proof of income during active duty periods. This means that even if your income increases, you can request to maintain the old, lower payment.

Note that this option does come with possible drawbacks. So always consider the pros and cons of income-driven repayment before enrolling.

Refinance your student loans for a lower interest rate

Whether you’re a civilian or an active duty member, an effective way to tackle student loan debt is by refinancing your loans. Refinancing is the process of paying off one or more student loans by obtaining a new, single loan through a private lender. Unlike the military loan repayment assistance program, refinancing applies to both federal and private loans.

Usually, the goal is to get a lower interest rate on the new loan, and in turn, enjoy smaller monthly payments. This move can save thousands of dollars in interest charges, too. You might also be able to extend your repayment period to lower monthly payments even more (though this could cancel out some or all interest savings).

It’s important to note that refinancing isn’t a magical solution to your debt problem and it’s not a great choice for all borrowers. There are several important pros and cons to consider, especially when it comes to refinancing federal student loans.

For example, refinancing federal loans with a private lender means permanently giving up access to government-backed benefits, including income-driven repayment options and the Public Service Loan Forgiveness Program.

However, if you have several high-interest loans or private loans — or don’t qualify for income-driven repayment — refinancing could be the answer to cutting the cost of that debt.

Student debt relief is available for servicemembers and veterans

Student loan debt shouldn’t be a burden to carry on and off the battlefield. The government has provided incentives, benefits, and student loan forgiveness for veterans and those on active duty.

“Without my student loans, I wouldn’t be a teacher today,” Rykers said. “But without my service, I wouldn’t be the person I am today.”

The article Complete Guide to Military Student Loan Forgiveness and Repayment originally appeared on studentloanhero.com.

Image by olegdudko via 123RF Copyright: <a href=’https://www.123rf.com/profile_olegdudko’>olegdudko / 123RF Stock Photo</a>