Does anyone have the scoop on the Military College Loan Repayment Program? Would be helpful if someone could delve into how it actually works and if there are any hidden drawbacks. Thanks in advance!
The Military College Loan Repayment Program (CLRP) is a benefit provided by several branches of the military to help service members repay their student loans. Each branch has certain requirements, so let's unpack those a bit:
The Army, Navy, and Air Force offer up to $65,000 towards loan repayment over your first three years of service. The National Guard provides up to $50,000. Note that this is a taxable benefit, so expect a percentage of it to be withheld for federal and state taxes.
To be eligible, you must enlist in one of these branches and your job should be listed as a CLRP eligible job at the time of your enlistment. You should find this in your enlistment contract. Bear in mind that not all Military Occupational Specialties (MOS) qualify for the CLRP.
To take advantage of the CLRP, you must decline the Montgomery GI Bill (MGIB) at the time of enlistment. You won't be eligible for the MGIB during the time the military is making repayments on your loans. This doesn't impact Post 9/11 GI Bill benefits, but it's something to consider since the MGIB can significantly cover education costs if you plan to pursue further education while in service or after discharge.
Take note that the repayment doesn't apply to every type of loan. Generally, the CLRP covers federal student loans such as Federal Stafford, Perkins, and PLUS loans. Private loans are typically not covered.
Finally, a point to consider is that the military only pays 33.33% of the outstanding loan balance or $1,500 (whichever is greater) at the end of each year of service. This means that if your loan is accruing interest at a higher rate, the remaining loan balance might not decrease as much as you anticipated.
In conclusion, while the CLRP can provide significant assistance in repaying student loans, it requires a careful evaluation of its trade-offs and limitations. Always take the time to go through your contract and understand the requirements and consequences before making a commitment.
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