Student loan debt is a growing crisis in America. Over 44 million borrowers collectively owe nearly $1.75 trillion in student loan debt. The average student loan balance is around $39,351.
Many borrowers struggle to pay back their loans and end up defaulting. Student debt can feel like a life sentence, preventing people from buying homes, getting married, having children, or saving for retirement.
However, there are ways to get student loan forgiveness or repay student loans faster One option is utilizing education benefits like the GI Bill if you’ve served in the military
The GI Bill provides education benefits to military veterans and servicemembers There have been multiple iterations of the GI Bill over the years
- The Original GI Bill started in 1944 to help WWII veterans.
- The Montgomery GI Bill began in 1984.
- The Post-9/11 GI Bill started in 2008 for veterans of the Iraq and Afghanistan wars.
The Post-9/11 GI Bill is the most comprehensive education benefit for those who served on active duty after September 10, 2001. It covers the full cost of in-state tuition and fees at public colleges and universities or up to $26,042.81 per year at private or foreign schools.
The Post-9/11 GI Bill also provides a monthly housing allowance and stipend for textbooks and supplies. Benefits are tiered based on length of service. To get 100% of benefits, you must have at least 36 months of active duty service after Sept. 10, 2001.
Can the GI Bill Pay Off Student Loans?
The GI Bill itself does not directly pay off student loans. However, by providing free tuition and living expenses while furthering your education, it can help you avoid taking on additional student loan debt.
You can use the GI Bill to attend college or graduate school without loans. This allows you to start fresh and avoid compounding your student debt.
Having a degree or advanced degree can also increase your earning potential. Making more money will enable you to pay off existing student loans faster.
Here are some options for leveraging the GI Bill to tackle student loans:
1. Use the GI Bill to earn an degree that boosts your income
Earning a bachelor’s or master’s degree in a high-paying field can increase your income level and allow you to pay off loans faster. Degrees like engineering, computer science, business, and healthcare are in demand. With the GI Bill, you can pursue these degrees without adding to your debt.
2. Attend community college or a low-cost university
The GI Bill pays the full tuition and fees at any public in-state college or university. Attending a low-cost community college for an associate’s degree or starting at an affordable 4-year state school can reduce overall education costs. You can then transfer and use any remaining GI Bill benefits to complete a bachelor’s degree.
3. Enroll in loan forgiveness programs
If you work in public service, you may qualify for student loan forgiveness like PSLF. Teaching jobs and government positions are options. You can use the GI Bill to earn the necessary degree or credentials without taking on more debt. Time spent on active duty also counts toward PSLF eligibility.
4. Consider vocational or technical training
The GI Bill can be used for certificate programs and on-the-job training. Pursuing vocational education in a field like healthcare, technology, or trades can lead to solid middle-income careers without requiring a traditional 4-year degree.
5. Use the GI Bill for graduate school
Getting an MBA, law degree, or other advanced credential can really boost earning potential. Graduate programs are expensive but the GI Bill makes them accessible. Focus on degrees that directly translate to high-paying roles.
6. Transfer benefits to a spouse or child
If your education needs are met, you can transfer unused GI Bill benefits to an eligible dependent. This allows your spouse or child to pursue college without student loans.
Strategies for Paying Off Student Loans Faster
In addition to avoiding further loans, make paying off existing student debt a priority. Here are some tips:
- Make extra payments each month to tackle principal
- Pay off highest interest rate loans first
- Refinance or consolidate loans at lower interest rates
- Sign up for automatic payments to get interest rate discounts
- Claim student loan interest deduction on taxes
- Apply any work bonuses, cash gifts, or tax refunds to debt
- Set up a side income like freelancing to earn extra money
- Reduce expenses and live frugally to put more cash toward loans
Stay disciplined and motivated by tracking your progress. Having a plan and timeline will help you maintain focus.
Is Using the GI Bill a Good Idea?
Leveraging GI Bill benefits can be a smart move if you want to continue your education without incurring more student loan debt. Make sure to research schools and programs to get the best return on your benefits.
Consider earning degrees or credentials that directly translate to higher earnings in fast-growing career fields. Doing a cost-benefit analysis will help ensure your education leads to enough increased salary to make the investment of time worthwhile.
The GI Bill opens doors for veterans to pursue degrees or training they may have not had access to otherwise. For many, it provides a life-changing opportunity to invest in their futures.
Just remember, the GI Bill itself does not repay existing student loans. It will take focus and a strategic repayment plan to become student debt free. But by avoiding additional loans and increasing earning power, the GI Bill can help you pay off student loans faster.
How veterans end up with student debt
Veterans often take out student loans after exhausting their Post-9/11 GI Bill benefits, which cover tuition and fees and include a monthly housing allowance and money for books. Not everyone uses their GI Bill benefits, and some don’t qualify for 100% tuition coverage.
Additionally, veterans borrow more frequently when attending for-profit schools than public colleges, according to an analysis by Veterans Education Success, a nonprofit that provides free legal assistance to student veterans.
Get help with repayment
All federal student loan borrowers have access to repayment options beyond the standard 10-year plan. Income-driven repayment, for example, caps your monthly payment at a portion of your income and extends the length of repayment.
Current service members also may get repayment help through branch-specific repayment programs or through the Department of Defense. The Navy, for example, offers an incentive that pays off up to $65,000 of a sailor’s federal student loans in their first three years of active-duty service.
Ask your designated military personnel officer to find out how to access these benefits.
How Do I Take Advantage Of The Military Student Loan Repayment Plan?
Can GI Bill be used to pay off student loans?
Can the GI Bill be used to pay off student loans? You cannot request education benefits specifically to repay a student loan. If you’re enrolled and receiving benefits, you can use your benefit payments however you choose, including student loan repayment.
Do veterans with GI Bill benefits still take out student loans?
Why Veterans With GI Bill Benefits Still Take Out Student Loans | The Pew Charitable Trusts
Does the GI Bill pay for college?
The GI Bill is one of the most popular military benefits programs around and it is a great way to pay for your college education. But the GI Bill can only be used to pay for college while you are in the service or after you separate from the service. What if you already had student loans when you joined the military?
Can I get the GI Bill if I get a refund?
In general you will receive a refund from the IRS. FOR EXAMPLE: $2,500 would be withheld from a $10,000. Potentially, you could get all the money back from the IRS and use the refund to make a payment on your student loans. The current regulations say you cannot get the GI Bill if you sign up for the Student Loan Repayment Program.