Federal vs Private: Know the Difference

This is the most important distinction for student loans and SCRA. Federal student loans have their own military interest rate cap (separate from SCRA), while private student loans fall under SCRA.

Federal

Federal Student Loans

  • Eligible for 6% cap under SCRA
  • ALSO eligible for 0% deferment
  • Public Service Loan Forgiveness
  • Income-Driven Repayment
  • Multiple programs available
Private

Private Student Loans

  • Eligible for 6% cap under SCRA
  • No federal deferment options
  • No forgiveness programs
  • Fewer protections overall
  • SCRA is your best option

Federal Student Loan Benefits

Federal student loans have multiple military benefits beyond SCRA. Understanding these options helps you choose the best path.

Available Federal Loan Benefits

SCRA 6% Cap

Rate reduced to 6% during active duty. Interest above 6% is forgiven.

Military Deferment

Pause payments during deployment. Interest may still accrue.

Interest Waiver (0%)

During qualified active duty, interest can be waived entirely.

PSLF

Forgiveness after 120 qualifying payments in public service.

Private Student Loans

Private student loans (from banks, credit unions, and private lenders) have only SCRA as a military benefit. There are no deferment options or forgiveness programs - making the 6% rate cap especially valuable.

SCRA Applies to Private Lenders

Private student loan lenders must comply with SCRA just like any other creditor. Request the 6% rate cap for any private loans originated before your active duty start date.

Sallie Mae SoFi Earnest Navient (private) Discover College Ave Citizens Bank Wells Fargo

How to File for Private Loans

  1. Identify your private loan servicer

    Check your credit report or loan documents. Private loans won't show up in studentaid.gov.

  2. Contact the servicer's SCRA department

    Call customer service and request military/SCRA benefits. Some may not be familiar - be prepared to explain.

  3. Submit military orders

    Provide a copy of orders showing your active duty start date. Include a written SCRA request.

  4. Confirm rate reduction

    Verify the new 6% rate on your next statement. Request any retroactive refund owed.

Parent PLUS Loans

Parent PLUS loans are in the parent's name, not the student's. The parent would need to be on active duty for SCRA to apply. If the student (borrower) joins the military, the parent's loan doesn't automatically qualify.

Which Path is Right for You?

Student Loan Decision Tree

1 Is it a federal or private loan? Check studentaid.gov for federal loans.
2 Federal: Compare SCRA 6% vs deferment vs PSLF eligibility.
3 Private: Request SCRA 6% rate cap from servicer.

Common Questions

Can I get SCRA on consolidated loans? If you consolidated before entering service, the consolidated loan qualifies. If you consolidated after, it doesn't - even if the underlying loans would have qualified.

What about refinanced student loans? Similar rule - if you refinanced with a private lender after entering service, the new loan doesn't qualify for SCRA.

Should I use SCRA or PSLF? If you plan to stay in public service for 10 years, PSLF may offer full forgiveness. SCRA provides immediate rate relief. You can use SCRA while working toward PSLF.

Let Us Sort Out Your Student Loans

We'll identify which loans qualify, contact each servicer, and ensure you get the maximum benefit.

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