How does the Servicemembers Civil Relief Act affect my student loan interest rates?
During your period of active duty, the Servicemembers Civil Relief Act (SCRA) establishes a maximum interest rate of 6% on any student loans borrowed by you prior to your military service.
This student loan interest rate also applies to any private education loans you may have borrowed prior to your service dates.
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 or loan servicer a written notice and a copy of the military orders calling you to 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:
• You are serving on active duty during war or other military operations or national emergency
• You perform qualifying National Guard duty during war or other military operations or national emergency ABS service 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.
Federal Family Education Loans (FFEL), which are loans you would have borrowed through a lender, that first disbursed on or after October 1, 2008 are also eligible for the Military Service Interest Waiver when included in a Federal Direct Consolidation Loan.
This also includes Consolidation loans that repaid FFEL or Direct loans first disbursed on or after October 1, 2008.