If you have student loans and you're on active duty, you might be sitting on one of the most valuable SCRA benefits available—and not even know it.

The 6% interest rate cap applies to student loans taken out before you entered active duty, and this can translate to thousands of dollars in savings over the course of your service.

How the SCRA Applies to Student Loans

Here's the key rule: Any student loan you took out before entering active duty is eligible for the 6% interest rate cap.

This applies to:

  • Federal Direct Loans
  • Federal Stafford Loans
  • Federal PLUS Loans
  • Federal Perkins Loans
  • Private student loans
  • Consolidated student loans (if the original loans were pre-service)

The Math: Why This Matters

Let's look at a real example:

Scenario: You have $50,000 in student loans at 7% interest

Without SCRA: You're paying $3,500/year in interest

With SCRA (6% cap): You pay $3,000/year in interest

Annual savings: $500

Over a 4-year enlistment: $2,000+ saved

And that's just one loan. Many service members have multiple student loans with rates well above 6%.

Federal vs. Private Student Loans

Federal Student Loans

Federal loan servicers are generally well-versed in SCRA requirements. To apply:

  1. Contact your loan servicer (Nelnet, MOHELA, Aidvantage, etc.)
  2. Request the SCRA interest rate reduction
  3. Provide a copy of your military orders
  4. The rate reduction is typically applied within 30 days

Pro tip: Federal servicers should automatically apply the rate cap if they can verify your active duty status through the DMDC database. But don't assume—always verify and request in writing.

Private Student Loans

Private lenders are legally required to honor the SCRA, but they may be less familiar with the process. Be prepared to:

  • Cite the specific SCRA statute (50 U.S.C. § 3937)
  • Provide certified copies of your orders
  • Follow up multiple times if necessary
  • Escalate to their compliance department if needed

Getting Retroactive Refunds

Here's what most service members miss: If your lender charged you more than 6% after you entered active duty, you're entitled to a refund of the excess interest.

The SCRA rate cap is retroactive to your active duty start date—not when you requested it. This means:

  • If you've been on active duty for 2 years and just now applying, you can get 2 years of excess interest refunded
  • Some service members have received refunds of $1,000-$5,000 or more
  • The refund should be applied to your principal balance or returned to you

Important Deadlines

You must request the SCRA rate reduction within 180 days after your military service ends to guarantee protection. However, it's best to request it as soon as you go on active duty.

What About Income-Driven Repayment?

If you're on an income-driven repayment (IDR) plan for federal loans, the SCRA still applies. The 6% cap affects how interest accrues, which can reduce negative amortization during periods of low payments.

Student Loan Forgiveness Programs

In addition to SCRA benefits, military service members may qualify for:

  • Public Service Loan Forgiveness (PSLF) - Military service counts as qualifying employment
  • Military College Loan Repayment Program - Up to $65,000 in loan repayment assistance
  • State-specific military education benefits

These can be combined with SCRA protections for maximum benefit.

Step-by-Step: Claiming SCRA Benefits on Student Loans

  1. Gather your documents: Military orders showing active duty start date, student loan statements
  2. Identify all loans: List every student loan with current interest rate and servicer
  3. Contact each servicer: Request SCRA rate reduction in writing
  4. Request retroactive refund: Ask for refund of excess interest charged since active duty start
  5. Get confirmation: Ensure you receive written confirmation of the rate change
  6. Monitor statements: Verify the new rate is reflected on your next statement

Don't Leave This Money on the Table

Student loans are often the largest debt service members carry into active duty. The 6% rate cap is one of the most straightforward SCRA benefits to claim, yet many service members never do.

Every month you wait is money lost. The law is clear, and lenders must comply.