One of the best enlistment education incentive programs that the Navy offers is the Loan Repayment Program. Under the Loan Repayment Program, it is designed to pay federally guaranteed student loans (up to $65,000) through three annual payments during a Sailor’s first three years of service.
The program is currently only available to eligible personnel in the delayed entry program who will enlist as active duty Sailors. In order to qualify for the program, a Sailor must be enlisted into an eligible rating. A rating is an occupation choice that a Sailor chooses when they enlist in the Navy.
It is important to note that loan repayments are subject to federal and state taxes.
When a Sailor enlists into the loan repayment program, they are not eligible for Montgomery GI Bill benefits because the Sailor must choose either the Loan Repayment Program or the Montgomery GI Bill. However, to be eligible for the loan repayment program and the benefits under the Montgomery GI Bill, a Sailor must reenlist and serve an additional three years under the new enlistment. To be eligible for the loan repayment program and 100% benefits under the Post 9/11 GI Bill, a person must serve a minimum of six years either through extension or reenlistment.
When I enlisted in the Navy, I was able to take advantage of the Loan Repayment Program. At the time, my federally guaranteed loans were approximately $65,000. I chose a rating that was in high demand, which was to be a Navy linguist and it required that I serve for six years. I never saw any payments applied to my loans until after I finished my language training because I never officially entered into my rating until after I successfully completed language school. Because my language training took a little over a year to complete, it took me nearly two years until my first payment towards my loans were repaid.
After I reached my duty assignment in Hawaii, I was able to get my first and second payments made towards my loans. All it took was constant communication with the administrators of the program so that they knew that I had completed my obligation for the program. As was expected, the loans were paid and an appropriate amount of taxes were withheld.
After I was at my duty station in Hawaii for one more additional year, my final payment was made and I was able to pay off all of my college loans.
Because I enlisted for six years, I was eligible for the Montgomery GI Bill after I completed my enlistment. This was an additional bonus to me as I did not expect this benefit when I had first enlisted in the Navy. If I came across a college student that is in the same predicament that I was in, I would highly recommend that they inquire about the Loan Repayment Program. It not only helped me financially, but it also gave me the opportunity to serve.