Student Loan Forgiveness & Relief for Veterans

If you're a veteran with student loan debt, you may qualify for forgiveness, discharge, or significantly reduced payments through one or more federal programs. The right path depends on your disability status, employment, loan type, and military service history.

• Public Service Loan Forgiveness (PSLF) — Active-duty service and post-military government or nonprofit work counts toward 120 qualifying payments for full forgiveness
• Total & Permanent Disability Discharge — Veterans rated 100% Permanent & Total (P&T) or TDIU can have all federal student loans forgiven
• Military Loan Repayment Programs — CLRP and SLRP can pay up to $65,000 toward student loans as an enlistment incentive
• Income-Driven Repayment (IDR) — Monthly payments based on taxable income; VA disability pay is excluded, which can result in $0 payments
• SCRA Interest Rate Cap — Caps interest at 6% on pre-service student loans during active duty
• Borrower Defense & Closed School Discharge — Relief for veterans defrauded by predatory schools

Important: Private student loans are generally not eligible for these federal programs. The options below apply to federal student loans unless noted otherwise. For broader financial planning, see our Financial Readiness guide.

PSLF forgives the remaining balance on qualifying federal Direct Loans after you make 120 qualifying monthly payments while working full-time for a qualifying employer. Active-duty military service in any branch counts as qualifying public service employment.

How Military Service Qualifies

• Active-duty service in any branch (Army, Navy, Air Force, Marines, Coast Guard, Space Force) counts as full-time government employment
• National Guard and Reserve members on active duty qualify during their active-duty periods
• Post-military federal government employment also qualifies (VA, DoD civilian roles, etc.)
• State and local government jobs and qualifying 501(c)(3) nonprofit employment after service also count

Core Requirements

• Loan type: Only Federal Direct Loans qualify. FFEL or Perkins loans must be consolidated into a Direct Consolidation Loan first (prior payments do not carry over)
• 120 qualifying payments: Payments do not need to be consecutive — gaps are allowed. Each payment must be made under a qualifying repayment plan, for the full amount due, within 15 days of the due date
• Qualifying repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), and the 10-Year Standard Plan. The new Repayment Assistance Plan (RAP) is also expected to qualify
• Private student loans do not qualify for PSLF

Why This Matters for Veterans

• VA disability pay is not counted as income for IDR payment calculations — this can result in very low or $0 monthly payments
• $0 payments on IDR plans count as qualifying payments toward PSLF
• A veteran who served 4 years active duty and then works 6 years in federal government could reach 120 payments — as long as qualifying payments were made during both periods
• Time spent in military deferment or forbearance does not count toward the 120 payments because no payment is being made

How to Certify Employment

Submit the PSLF Form (formerly the Employment Certification Form) annually or whenever you change employers. Military members can use their Leave and Earnings Statement (LES) or other military documentation. The form is submitted to your PSLF servicer (currently MOHELA). Use the PSLF Help Tool to check eligibility and generate the form.

College Loan Repayment Program (CLRP)

CLRP is an enlistment incentive where the military repays a portion of your qualifying student loans. It must be written into your enlistment contract — if it's not in the contract, you will not receive it.

• Repays 33⅓% of outstanding loan balance per year of service (up to the maximum)
• Payments cover principal only — interest is not included
• CLRP payments are considered taxable income (taxes are withheld)
• Loans must have been taken out before enlistment and must not be in default
• CLRP and the GI Bill cannot typically be used together — choosing CLRP may affect GI Bill eligibility

SCRA Interest Rate Cap (6%)

The Servicemembers Civil Relief Act (SCRA) caps interest at 6% on student loans taken out before entering active duty. The interest above 6% is forgiven — not deferred or added to the balance. This applies to both federal and private student loans.

• Federal student loans: The rate reduction is applied automatically — your servicer checks eligibility
• Private student loans: You must submit written notice to your lender with a copy of your military orders
• Can be requested at any time during active duty or within 180 days after separation
• The rate cap lasts through your final day of active duty

Military Service Deferment

• Available to active-duty servicemembers — postpones student loan payments during service
• Post-Active Duty Student Deferment: Up to 13 months after returning from active duty
• Subsidized loans: Government pays the interest during deferment
• Unsubsidized loans: Interest continues to accrue and may capitalize
• Combat zone bonus: No interest charged on Direct Loans (first disbursed after October 1, 2008) for up to 60 months while serving in a hostile fire or imminent danger pay area
• Key trade-off: Deferment does not count toward PSLF because no payments are being made. If pursuing PSLF, staying on an IDR plan (even with $0 payments) may be a better strategy

VA Education Debt Reduction Program (EDRP)

If you work for the Veterans Health Administration (VHA) in an eligible healthcare role, the EDRP can repay up to $40,000 per year (up to $200,000 over five years) of your student loans — tax-free. Eligible positions include physicians, nurses, social workers, psychologists, and other hard-to-fill roles. Since VHA employment also qualifies for PSLF, you can receive EDRP payments and accrue PSLF qualifying payments simultaneously.

If you have a 100% Permanent and Total (P&T) VA disability rating or Total Disability Individual Unemployability (TDIU), you can have all federal student loans completely forgiven. This applies to Direct Loans, FFEL loans, and Perkins loans — the entire remaining balance including principal, interest, and fees.

Who Qualifies

• 100% Permanent & Total (P&T) VA disability rating
• Total Disability Individual Unemployability (TDIU) — the VA treats this as total disability for TPD purposes
• An 80% or 90% VA rating does not qualify — must be 100% P&T or TDIU
• Social Security Disability Insurance (SSDI) or SSI determination also qualifies
• Physician certification of total and permanent disability is a third option

How to Apply

• Automatic process: Since 2021, the Department of Education works directly with the VA to identify qualifying veterans. You may receive a notification letter without having to apply
• Self-application: Apply at studentaid.gov/tpd-discharge with your VA documentation showing 100% P&T or TDIU
• No physician certification needed when using VA documentation
• Processing typically takes several weeks to months

Tax Treatment & Monitoring

• Federally tax-free: Discharged amounts are not treated as taxable income (permanent for discharges on or after January 1, 2018)
• Most states: Follow the federal rule and do not tax the discharged amount. A few states (notably Mississippi) may still tax it — check with your state tax authority
• No monitoring period for veterans: Veterans with VA-based TPD discharge are exempt from the 3-year post-discharge monitoring that applies to other borrowers
• New loans after discharge: You can take out new federal student loans after TPD discharge, but must certify ability to engage in substantial gainful activity

Income-Driven Repayment (IDR) plans set monthly payments based on your taxable income and family size. The critical advantage for veterans: VA disability compensation is not counted as income for IDR calculations because it is tax-exempt and not included in your Adjusted Gross Income (AGI). A veteran whose only income is VA disability could have a $0 monthly payment — and $0 payments still count toward both PSLF and IDR forgiveness timelines.

Plan Comparison

Discretionary income means your AGI minus 150% of the federal poverty guideline for your family size. Since VA disability pay is excluded from AGI, this threshold significantly reduces payments for veterans.

The New Repayment Assistance Plan (RAP)

Congress created RAP through legislation signed July 4, 2025. It takes effect July 1, 2026 and will eventually become the only IDR plan for new borrowers. Key differences from older IDR plans:

• Payments based on total AGI rather than discretionary income — may result in higher payments for veterans with taxable income
• $10/month minimum payment and balance must decline by at least $50/month
• 30-year forgiveness timeline — longer than the 20-25 years under IBR/PAYE
• Forgiven amounts under RAP may be taxable income
• Current SAVE, PAYE, or ICR borrowers must transition to IBR or RAP by July 1, 2028
• VA disability income is still excluded from AGI, so veterans receiving only VA disability would still have very low payments

Choosing the Right Plan

• Pursuing PSLF? IBR is the best choice — lowest payments based on discretionary income, and PSLF forgives at 120 payments regardless of plan forgiveness timeline
• Not pursuing PSLF? IBR still likely offers lower monthly payments than RAP for most veterans
• 100% P&T or TDIU? Apply for TPD discharge first — your loans may be forgiven entirely, making IDR unnecessary
• Only income is VA disability? Payment under any IDR plan will likely be $0

For more on managing finances after service, see our Financial Readiness guide.

For-profit colleges have historically targeted veterans because of a loophole in the 90/10 rule: GI Bill and DoD Tuition Assistance funds counted as "non-federal" revenue, meaning every dollar of GI Bill funding qualified the school for an additional $9 in federal student aid. This created a massive financial incentive to aggressively recruit veterans — often using inflated job placement rates, fake employer partnerships, and high-pressure tactics.

The loophole was officially closed in 2023, but many veterans still carry debt from these schools. If you were misled, you may have options.

Borrower Defense to Repayment

If your school engaged in fraud or misrepresentation — inflated job placement rates, false employer partnerships, misleading transfer credit claims, or deceptive recruiting — you can apply for discharge of your federal student loans.

• Applies to Federal Direct Loans and FFEL Program Loans (for certain time periods)
• Apply at studentaid.gov/borrower-defense
• Include detailed descriptions and any supporting documentation (marketing materials, emails, enrollment documents)
• Your loans may be placed in forbearance during processing
• Processing times can be lengthy — months to years depending on backlog

Schools with Approved Group Discharges

The Department of Education has approved blanket or group discharges for students of specific schools. If you attended one of these, you may receive automatic loan cancellation:

• Corinthian Colleges (Everest, Heald, WyoTech) — blanket discharge
• ITT Technical Institute — blanket discharge (closed 2016)
• DeVry University — group discharge for documented misrepresentation periods
• University of Phoenix — loan forgiveness for students deceived by false marketing
• Art Institutes, Westwood College, Marinello Schools of Beauty, Argosy University — group discharges
• Check the full list at studentaid.gov borrower defense findings

Closed School Discharge

If your school closed while you were enrolled, within 180 days of your withdrawal, or while you were on an approved leave of absence, you may qualify for complete discharge of federal loans taken for that program. You do not qualify if you completed all coursework or transferred through a teach-out agreement. Contact your loan servicer or check if automatic discharge applies to your school's closure.

Protect Your Benefits

• Before enrolling, compare schools using the education benefits page on VetAtlas
• Report a predatory school to the VA: VA GI Bill Feedback System
• File a complaint with the FTC: reportfraud.ftc.gov

• The GI Bill cannot be used to pay off existing student loans — it covers tuition, fees, housing, and books for current or future education only
• GI Bill benefits are not counted as income for IDR payment calculations or on the FAFSA
• Veterans are classified as independent students on the FAFSA regardless of age — no parental information required
• You can receive GI Bill benefits and federal student loans/Pell Grants for the same enrollment period
• Using GI Bill to cover tuition reduces the need to borrow — this is the ideal approach
• If GI Bill doesn't cover all costs, federal student loans (especially subsidized) are preferable to private loans

For a detailed comparison of education benefits, see our Education Benefits guide.

Step 1: Check Your Loans

Log into studentaid.gov to see all your federal student loans, your current servicer, loan types, and balances. Knowing your loan types (Direct vs. FFEL vs. Perkins) determines which programs you're eligible for.

Step 2: If You Have a 100% P&T or TDIU Rating

Apply for TPD discharge immediately at studentaid.gov/tpd-discharge. You may have already been identified through the automatic VA data match — check your mail and email for a notification letter. If approved, your entire federal student loan balance is forgiven.

Step 3: Consolidate If Needed

If you have FFEL or Perkins loans and want to pursue PSLF, consolidate them into a Federal Direct Consolidation Loan as soon as possible. Prior payments on non-Direct loans do not count toward PSLF — only payments made after consolidation count. Apply for consolidation at studentaid.gov.

Step 4: Enroll in an IDR Plan

If pursuing PSLF or if you need lower monthly payments, enroll in Income-Based Repayment (IBR) — it currently offers the lowest payments for most veterans. Apply through your loan servicer or at studentaid.gov. Remember: VA disability pay is excluded from your income calculation.

Step 5: Certify Your Employment for PSLF

If you're in qualifying employment (military, government, or 501(c)(3) nonprofit), submit the PSLF Form to certify your employment. Do this annually and whenever you change employers. Use the PSLF Help Tool to generate the form.

Step 6: Check for Borrower Defense Eligibility

If you attended a for-profit school that used deceptive practices, check the approved school findings list and apply for borrower defense at studentaid.gov/borrower-defense.

Key Resources