HPSP and federal loan capping

[customx]

A classmate of mine said that federal loans are capped at 6% if you're on HPSP. Can anyone confirm this?

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[distressstudent]

False.

Need to be active duty or on ADT

Look up SCRA

Also CC loans etc

 

[customx]

False.

Need to be active duty or on ADT

Look up SCRA

Also CC loans etc

Interesting. She said she got a letter directly from FAFSA stating that the rate would decrease her current loans by about 1% each, so she has one at about 4.5% and another at about 5.5%. I'll see if I can get a copy of the letter and will report back what it says.

 

[distressstudent]

Interesting. She said she got a letter directly from FAFSA stating that the rate would decrease her current loans by about 1% each, so she has one at about 4.5% and another at about 5.5%. I'll see if I can get a copy of the letter and will report back what it says.

weird that fafsa would do it when they aren't the agency that's actually in charge of disbursing your loans/the ones you have to pay back

let me know if you get the letter. I would be very interested in lowering my loans. lol

 

[vellnueve]

SCRA only applies to debt you have prior to military service and only applies once you go on active duty.

 

[customx]

SCRA only applies to debt you have prior to military service and only applies once you go on active duty.

We are both on 3 year scholarships and have loans from our D1 year. Even if it only applies once on AD, this will save us thousands of dollars

 

[vellnueve]

Once on AD contact your lender and ask to have the benefits applied. Many loan companies do it automatically.

 

[customx]

I got a copy of the letter she received from her loan service provider. Apparently she is listed as AD in the database that the service provider uses when giving the benefits. It has to be a mistake, but I'm happy for her because she's going to save thousands of dollars in interest while in school and beyond.

 

[distressstudent]

Is she currently on ADT?

Most students are around this time of the year

 

[customx]

Is she currently on ADT?

Most students are around this time of the year

No, she's a 2nd year student

 

[distressstudent]

No, she's a 2nd year student

Uh yeah... Do you know what's an active duty tour?

 

[customx]

Uh yeah... Do you know what's an active duty tour?

As far as I know we aren't on ADT since we are in clinic during the summers. She received the benefit starting in February. I'm not sure if that will continue

 

[distressstudent]

As far as I know we aren't on ADT since we are in clinic during the summers. She received the benefit starting in February. I'm not sure if that will continue

Every year all HPSP students are suppose to do a 45 active duty tour. For dental students that don't have the time, that entails doing a campus tour; the only obligation is that you can't leave the country for 45 days. While on tour, you switch to active duty status and also no longer receive a stipend but instead active duty pay + BAH/BAS.

Personally, I started my ADT this February since that was the earliest date available. I would suggest you register to do it asap because that's extra cash on you're not collecting early.

 

[customx]

Every year all HPSP students are suppose to do a 45 active duty tour. For dental students that don't have the time, that entails doing a campus tour; the only obligation is that you can't leave the country for 45 days. While on tour, you switch to active duty status and also no longer receive a stipend but instead active duty pay + BAH/BAS.

Personally, I started my ADT this February since that was the earliest date available. I would suggest you register to do it asap because that's extra cash on you're not collecting early.

Interesting and thanks for sharing all the info. I'll look into registering so I can get started. Do you know if we are eligible for SCRA while on the active duty tour for 45 days?

 

[vellnueve]

You are not eligible for most things on ADT.

 

[distressstudent]

Do you know if we are eligible for SCRA while on the active duty tour for 45 days?

You can ask your loan servicers I know people that have sent their orders to their loan servicers to show they are on orders for those 45 days.
I suspect it's the case for your friend

 

[onaje]

Federal loans are giving SCRA benefits to HPSP students. It is not only active duty but reserves as well who spend 30 consecutive days in active duty. From what I know HPSP students are required to do active duty for 30 days each year.

I spoke to a representative early today and she confirmed it; so HPSP reserves are eligible for 6% cap. FAP does 14 days so not eligible as per rep.

 

[customx]

Federal loans are giving SCRA benefits to HPSP students. It is not only active duty but reserves as well who spend 30 consecutive days in active duty. From what I know HPSP students are required to do active duty for 30 days each year.

I spoke to a representative early today and she confirmed it; so HPSP reserves are eligible for 6% cap. FAP does 14 days so not eligible as per rep.

It was my understanding that the 6% cap only applies during the 45 days of active duty, then the rate goes back to whatever it was

 

[onaje]

It was my understanding that the 6% cap only applies during the 45 days of active duty, then the rate goes back to whatever it was

It would be impractical for them to just give you those 45 days then put the rates back up. It's a thing where you either qualify for the cap or you don't. Active duty or reserve (30 consecutive days in a year minimum active) is eligible for 6% cap.

 

[distressstudent]

It would be impractical for them to just give you those 45 days then put the rates back up. It's a thing where you either qualify for the cap or you don't. Active duty or reserve (30 consecutive days in a year minimum active) is eligible for 6% cap.

Overview of the SCRA

https://www.servicememberscivilreliefact.com/blog/scra-reservist/

Or https://www.navient.com/assets/loan...s/Servicemembers-Civil-Relief-Act-Request.pdf

"Period of qualifying military service means the period of time when:

• A member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard (or respective Reserve component) is on active duty, including full-time duty in the active military service of the United States and full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned, but not including full-time National Guard duty;

• A member of the National Guard is performing service on active duty or full-time National Guard duty authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 USC 502(f), for the purposes of responding to a national emergency declared by the President and supported by Federal funds;

• A commissioned officer of the Public Health Service or the National Oceanic and Atmospheric Administration is on active service; or

• A servicemember is absent from duty due to sickness, wounds, leave, or other lawful cause"

I have only worked with Navient and confirm they only cap it for those 45 days on the dot

 

[onaje]

Overview of the SCRA

https://www.servicememberscivilreliefact.com/blog/scra-reservist/

Or https://www.navient.com/assets/loan...s/Servicemembers-Civil-Relief-Act-Request.pdf

"Period of qualifying military service means the period of time when:

• A member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard (or respective Reserve component) is on active duty, including full-time duty in the active military service of the United States and full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned, but not including full-time National Guard duty;

• A member of the National Guard is performing service on active duty or full-time National Guard duty authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 USC 502(f), for the purposes of responding to a national emergency declared by the President and supported by Federal funds;

• A commissioned officer of the Public Health Service or the National Oceanic and Atmospheric Administration is on active service; or

• A servicemember is absent from duty due to sickness, wounds, leave, or other lawful cause"

I have only worked with Navient and confirm they only cap it for those 45 days on the dot

Ooh okay. I cannot comment on Navient. I was referring to Federal Loans. Going through the effort of applying for a rate reduction from 6.8% to a 6% cap for 30-45 days is a waste of time. If that's how it's done then we're discussing savings of 50 cents a day on a 20K loan. Oh well.