What is the Army Loan Repayment Program?

The United States Army has a number of programs to assist newly enlisted soldiers in repaying their student loans. One of the best options is to enter the Army’s Loan Repayment Program (LRP), which offers substantial benefits to those soldiers who qualify for the program. By entering and completing the LRP, a soldier can drastically reduce his or her short and long-term student debt while also using the education to benefit their military or later civilian career options.

The Loan Repayment Program

The LRP is available to qualified enlisted soldiers in the United States Army at the time of their enlistment. The LRP will repay up to $65,000 of the soldier’s qualifying student loans. It should be noted that this total is sometimes adjusted due to inflation or other factors and so individuals interested in this program should consult with their recruiting officer to determine what the current total compensation is.

The LRP will repay the following types of student loans:

• Loans made under Title IV, Part B of the Higher Education Act of 1965.

• Loans made under Part D or E of the Higher Education Act.

• Loans that have been made by an institution that is an agent of the state or is subject to evaluation and examination by federal regulatory agencies.

• A pension fund or other private entity. This type of loan must be independently evaluated by the LRP.

The LRP pays in installments of 33 1/3 percent or $1,500 dollars, whichever is greater. The first installment is paid after the recipient has spent a full year on active duty. Additional payments are made at the end of the following two years of active duty. For this reason, a successful LRP repayment program will take no more than three years of active duty service.

Qualifying for the LRP

The LRP is intended to compensate highly qualified candidates, and there are a number of qualification requirements for those individuals seeking to enter this program. Perhaps the most important requirement is that the applicant must first disenroll from the Montgomery GI Bill program. This makes the soldier ineligible to participate in the LRP while also benefiting from the provisions of the GI Bill.

Secondly, the applicant must have a high school diploma and a score of at least 50 on the Armed Services Vocational Aptitude Battery (ASVAB). Because of this, individuals seeking entry into the LRP should be certain that they have graduated before their enlistment.

Finally, enlisted soldiers must sign up for a high-demand critical military occupational specialty (MOS). These are specialties that are currently suffering a shortfall in qualified members. However, the list of critical specialties changes regularly as the Army reevaluates its current needs. For this reason, anyone seeking to benefit from the LRP should be prepared to accept a number of different MOS selections.

The Soldier’s Loan Responsibilities

It is important to note that the Army does not become the servicer of the loan. The money is disbursed to the loan’s originator, but the soldier remains responsible to ensure that his or her loans remain current. Allowing a loan to become delinquent may impact the soldier’s current or future eligibility to participate in the LRP process.

Ultimately, the LRP program can be an excellent way for a soldier to repay his or her loans while also gaining valuable experience in a high demand MOS. This, coupled with the short period of repayment, makes the LRP program an extremely attractive option for those individuals with large amounts of student debt who are considering a career in the Army.