The Servicemember Civil Relief Act (SCRA) eases the financial and legal burdens facing servicemembers during their qualifying active duty service. Among other benefits, SCRA limits the interest rate on your student loans to 6% while you perform eligible services.
How To Qualify
To qualify for SCRA benefits, you must be performing eligible service. This service will vary depending on your military branch:
- Members of the Army, Navy, Air Force, Marine Corps, and Coast Guard must be on full-time, active U.S. military service, which includes training duty and attendance at a military service school while on active duty.
- National Guard members must be on active duty service or full-time National Guard duty authorized by the president or the secretary of defense for a period of more than 30 consecutive days responding to a national emergency declared by the president and supported by federal funds.
- Public Health Service or the National Oceanic and Atmospheric Administration (NOAA)-commissioned officers must be on active service.
Any period while a servicemember is absent from duty because of sickness, wounds, leave, or other lawful cause is also considered eligible SCRA service.
To be eligible for this interest rate cap, your loans must have been disbursed prior to the beginning of your active duty service. If your service predates August 14, 2008, you can only receive this limitation as of that date. If you consolidate your loans after you began active duty, you are not eligible for this interest rate limitation.
Federal loan servicers are required to proactively monitor your military service on at least a monthly basis to apply this interest rate limitation. Your federal student loans should reflect the 6% interest rate for the months that you are/were performing eligible service.
Defaulted federal student loans are also eligible for this interest rate limitation so that your interest rate, collection costs, and default fees together will be limited to no more than 6%.
Some private loan servicers may proactively apply this limitation, but you may want to contact them to be sure. Each lender will have its own process on how to apply this benefit.
If You Don’t Receive The Limitation But Are Eligible
Though your federal student loan holder checks your eligibility monthly, sometimes their database is inaccurate or incomplete (and doesn't include most National Guard duty). If you are performing eligible service but aren't receiving the interest rate limitation, you can provide your loan holder alternative evidence of your military service. This can be a copy of your military orders or the SCRA Interest Rate Limitation Request.
What You'll Need
To complete the SCRA request, you will need an authorized official who is your commanding officer, personnel officer, or unit-readiness non-commissioned officer to certify the beginning and ending dates (if known) of your eligible military service.
How To Apply
Once you have completed the first section of the SCRA request and an authorized official has completed the rest, submit it to your loan holder. You will need to send the form to all of your loan holders if you have loans held by multiple holders.
Other SCRA Benefits
SCRA benefits are not limited to just student loans—they apply to all your consumer debt (credit cards, rental agreements, cellphone contracts, and auto leases, to name a few) that existed prior to your service date. You can learn more about non-student loan-related provisions here.