How does the Servicemembers Civil Relief Act affect my student loan interest rates?
The Servicemembers Civil Relief Act (SCRA), establishes a maximum interest rate of 6% on debts incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service.
What do I need to send my lender in order to qualify for the Servicemembers Civil Relief Act interest rate cap of 6%?
To qualify for the 6% interest rate cap, you need to provide your lender a written notice and a copy of the military orders calling you to military service or extending your military service.
What is the Military Service Interest Waiver?
If you borrowed a Direct Loan, no interest will accrue for up to a period of 60 months if you meet one of the following conditions:
1. You are serving on active during war or other military operations or national emergency
2. You perform qualifying National Guard duty during war or other military operations or national emergency ABS serve in an area of hostilities for which service qualifies for special pay.
The Military Service Interest waiver applies to Direct Loans first disbursed on or after October 1, 2008.
FFEL Program loans first disbursed on or after October 1, 2008 (including Consolidation loans that repaid FFEL or Direct loans first disbursed on or after October 1, 2008) are also eligible for the Military Service Interest Waiver when included in a Federal Direct