Military College Loan Repayment Program (CLRP)
Pros, Cons, and Rules of the College Loan Repayment Program
The College Loan Repayment Program (CLRP) is an enlistment incentive for new recruits to the U.S. military. Like other such incentives authorized by Congress, each of the services is free to offer the program as it sees fit in order to meet established recruiting goals.
Under CLRP, the military will repay a portion of eligible college loans for non-prior service military members. This program is for enlisted personnel only; officers are not eligible, and not every military occupational specialty (MOS) is eligible for CLRP.
Congress has limited the maximum amount of payment to $65,000. However, within these limits, each of the services has applied their own maximums. At present, the Army and Navy will repay the maximum allowed by law for non-prior service active duty enlistments. The Army will pay up to $20,000 for Reserve enlistments (including the Army National Guard).
The Air Force will repay up to $10,000 for non-prior service, active duty enlistments. Additionally, the Navy Reserves will repay up to $10,000 for Navy Reserve enlistments.
The Marine Corps, Coast Guard, and Air Force Reserves do not offer the College Loan Repayment Program. However, the Air National Guard offers CLRP of up to $20,000, for designated shortage AFSCs (jobs).
Qualifying Loans for CLRP
To qualify for CLRP, a loan must be entered into before joining the military. The following loans qualify for the College Loan Repayment Program:
- Auxiliary Loan Assistance for Students (ALAS)
- Stafford Student Loan, formerly known as the Guaranteed Student Loan (GSL)
- Parents Loans for Undergraduate Students (PLUS). Must be incurred for the use of the individual contracting for the program (not others such as relatives)
- Consolidated Loan Program. Only covers the member's education expenses
- Federally Insured Student Loans (FISL)
- Perkins Loan, formerly known as the National Direct Student Loan (NDSL)
- Supplemental Loans for Students (SLS)
Eligibility for CLRP
These criteria will vary based on the individual branch of the military. But for active duty personnel, they must have no prior military experience to qualify. In the Air Force and Navy active duty, personnel must be enlisted for a minimum of four years; in the Army active duty, the minimum enlistment is three years.
The enlistment requirements to receive CLRP are somewhat longer for the Reserve units. For the Army and Navy Reserves, and Army and Air National Guard, a minimum enlistment of six years is required.
For the Army, soldiers must have a high school diploma and an overall score of 50 or higher on the Armed Forces Vocational Aptitude Battery (ASVAB). For Army active duty, Army Reserves, Army National Guard, and Air National Guard must enlist in a specific MOS that qualifies for the program. These are subject to change based on need, so it's best to check with a local recruiter to see which jobs are eligible for CLRP.
For the Army Reserves, Army National Guard, and the Air National Guard, the maximum amount repayable (up to $20,000) varies by MOS as well.
Within the Army and Navy Reserves, those with prior military service are eligible.
And perhaps most importantly: The CLRP must be included in the recruit's enlistment contract in order for it to apply.
CLRP and the GI Bill
An important caveat to be aware of when considering whether to request CLRP. Any active duty personnel seeking CLRP are not eligible for the Montgomery GI Bill for the same enlistment period.
To be clear: Active duty members may participate in the GI Bill during a subsequent enlistment period, even if they used CLRP during their first enlistment.
One would not be able to use the GI Bill, however, until after 30 months into the second enlistment.
These provisions do not apply to members of the Reserves and National Guard, who can use the Reserve Montgomery GI Bill, and the CLRP during the same enlistment period.
Member Responsibilities for CLRP
To qualify for CLRP, military members must remain on enlisted active duty while enrolled in the program. Loans must be in good standing, i.e., not in default, and the member is responsible for paying any fees and accrued interest. CLRP payments are made directly to the lender, not the military member, and are considered taxable income.
CLRP payments are made directly to the lender. The first payment is not made until after the member has completed one year of service.
For active duty personnel, the military repays 33⅓ percent of the outstanding principal balance of the loan annually, or $1,500, whichever is greater, for each year of service.
The Army and Navy Reserves will repay 15 percent of the outstanding principal balance of the loan annually, or $1,500, whichever is greater, for each year of service. The Air National Guard will pay 15 percent or $5,000 (whichever is greater) annually against the outstanding principal balance.