Question about the Loan Repayment Program and enlistment bonuses (Army, credit card, student loans)
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So say you enlist and get into the LRP. What i understood is that the military will pay 33% of the debt that you have each year. So say if i have 20K in debt. During the year i pay 2,000 of my debt bringing down to $18,000, does that mean the military will pay 6,000 which is about a third of the debt and therefore bringing it down to $12,000. Then during the following year i pay another 2,000 bringing my debt down to 10,000, and the military will pay 33% of that bringing it down to 6,600. Is this kinda how it works?
I read you get the LRP if you enlist in a critical MOS in the army. So say i have a bachelor's degree and i enlist in a critical MOS and get the LRP, will i also get enlistment cash bonus for getting in a critical MOS and also enlisting with a degree along with the the LRP?
will i also get enlistment cash bonus for getting in a critical MOS and also enlisting with a degree along with the the LRP?
Sort of works like that, but I don't know if you can get LRP and an enlistment bonus... It will be affected by your MOS and years of enlistment. And it may change periodically like re-enlistment bonus' change. I've gotten some quick answers from them on the phone in the past. Email or Talk a recruiter Contact Us
So say you enlist and get into the LRP. What i understood is that the military will pay 33% of the debt that you have each year. So say if i have 20K in debt. During the year i pay 2,000 of my debt bringing down to $18,000, does that mean the military will pay 6,000 which is about a third of the debt and therefore bringing it down to $12,000. Then during the following year i pay another 2,000 bringing my debt down to 10,000, and the military will pay 33% of that bringing it down to 6,600. Is this kinda how it works?
I read you get the LRP if you enlist in a critical MOS in the army. So say i have a bachelor's degree and i enlist in a critical MOS and get the LRP, will i also get enlistment cash bonus for getting in a critical MOS and also enlisting with a degree along with the the LRP?
This is what happens when the Army repays student loans.
About 1 year into service, you'll receive an e-mail regarding repayment information the Army needs. You'll have to fill out some paperwork and get some paperwork from the lender. That information is completed and turned in. <-it's been a few years so that may or may not be the same method being used.
The Army will only pay principle, they will not pay interest. That money is also considered income so it is taxable. However, the Army will not ********* by giving you a 1099 at the end of the year therefore most likely causing you tax liability come tax filing season.
They will deduct taxes from the repayment and then pay the net amount after taxes to your lender.
Let's say you owe $21,000 in principle. It's an easy number to use for math. The Army will pay $7,000 on the anniversary of your 1st, 2nd and 3rd year. But before that, they will deduct appropriate taxes, let's say you're taxed at 20%, that brings their payment down to $5,600 to the lender as $1,400 goes to taxes. At tax filing season, you'll go on DFAS and pull a W2 for taxes paid on student loan repayment.
You would be able to qualify for military deferment, I believe the most time you'll be given is about 3 years. Interest will still accumulate but you lose the pressure of having to make a payment, which is convenient because you won't have access to those bills while you're in Basic, in the field, etc. However, that also doesn't mean you can't keep paying.
If you deploy for 12 months, some companies will also give you forgiveness, no strings attached, no tax, etc.
Another financial tidbit: if you join, any loans whether it's fixed (car, home, etc.) or rotating (credit cards), you can use the Service Member Civil Relief Act to reduce interest to a maximum of 6% but that only helps if you have rates higher than that. In addition to reducing the interest, most will also reduce minimum monthly payment or quite possibly even suspend interest or minimum monthly payment requirements.
This works only on credit established before military service. So that 18% Visa card you got while you were a civilian, it would be reduced to a maximum of 6% after you join.
I've taken full advantage and have saved thousands of dollars in interest and built my credit profile up significantly.
I cannot answer the question of whether or not you can get SLRP (student loan repayment) and an enlistment bonus. Honestly, I wouldn't trust a recruiter to answer that question, either. I would want to hear it straight from a MEPS (Military Entrance Processing Station) counselor and see it on paper before I committed.
This is what happens when the Army repays student loans.
About 1 year into service, you'll receive an e-mail regarding repayment information the Army needs. You'll have to fill out some paperwork and get some paperwork from the lender. That information is completed and turned in. <-it's been a few years so that may or may not be the same method being used.
The Army will only pay principle, they will not pay interest. That money is also considered income so it is taxable. However, the Army will not ********* by giving you a 1099 at the end of the year therefore most likely causing you tax liability come tax filing season.
They will deduct taxes from the repayment and then pay the net amount after taxes to your lender.
Let's say you owe $21,000 in principle. It's an easy number to use for math. The Army will pay $7,000 on the anniversary of your 1st, 2nd and 3rd year. But before that, they will deduct appropriate taxes, let's say you're taxed at 20%, that brings their payment down to $5,600 to the lender as $1,400 goes to taxes. At tax filing season, you'll go on DFAS and pull a W2 for taxes paid on student loan repayment.
You would be able to qualify for military deferment, I believe the most time you'll be given is about 3 years. Interest will still accumulate but you lose the pressure of having to make a payment, which is convenient because you won't have access to those bills while you're in Basic, in the field, etc. However, that also doesn't mean you can't keep paying.
If you deploy for 12 months, some companies will also give you forgiveness, no strings attached, no tax, etc.
Another financial tidbit: if you join, any loans whether it's fixed (car, home, etc.) or rotating (credit cards), you can use the Service Member Civil Relief Act to reduce interest to a maximum of 6% but that only helps if you have rates higher than that. In addition to reducing the interest, most will also reduce minimum monthly payment or quite possibly even suspend interest or minimum monthly payment requirements.
This works only on credit established before military service. So that 18% Visa card you got while you were a civilian, it would be reduced to a maximum of 6% after you join.
I've taken full advantage and have saved thousands of dollars in interest and built my credit profile up significantly.
I cannot answer the question of whether' or not you can get SLRP (student loan repayment) and an enlistment bonus. Honestly, I wouldn't trust a recruiter to answer that question, either. I would want to hear it straight from a MEPS (Military Entrance Processing Station) counselor and see it on paper before I committed.
If I were in your situation, I would defer and let the Army pay as much as possible. It's cheaper paying tax on the SLRP than it is paying the SLRP.
Keep this in mind as well: as they pay off significant chunks of principle, the interest charged will be lower as well.
I do believe, it's been a few years now, that the first year they pay is what they'll pay on the 2nd and 3rd installments as well because I did not send in paperwork each subsequent year for them to pay the lender. So their installment payments will be equal each year.
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