Army Rotc Forgiveness loans

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bmunder

5-Year Member
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Feb 15, 2011
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Do any of you have any good information on these loans? I'm just wondering if they fall under the category of "if it sounds too good....."
DS was told he should apply and we would like to give him some guidance.
 
I had no idea they even existed! What circumstances would they be used in?
 
perhaps this is relevant? However, it is for Enlistment incentive, not for ROTC:

http://www.military.com/Resources/ResourcesContent/0,13964,44245--,00.html

from the link:

"Army
The Army's Loan Repayment Program (LRP) is a special enlistment incentive that the Army offers to highly qualified applicants at the time of enlistment. Under the LRP, the Army will repay up to $65,000 of a soldier's qualifying student loans. "
 
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DS received a 3 year AROTC scholarship. This is supposed to cover his first year's tuition and if I understand correctly, one-third of the loan is forgiven each year until he graduates, provided he stays at the same school...and who knows what the other stipulations are.
 
^bmunder -- that doesn't sound like ANYTHING I've seen before.

Are you talking about a 3 Yr. AD Scholarship? If so, it is like a 4 year Scholarship except the Award does not begin until MSII year (Sophomore). The cadet and/or family are 100% responsible for all tuition, books, travel for the MSI year. There is no monthly stipend for the MSI year for a 3 Yr. AD scholarship awardee.

Are you talking about a 3 Yr. Scholarship awarded after college started? If so, I haven't read anywhere that the Army will pick up any loans incurred during the non-scholarship MSI year.

I don't know anything about loan forgiveness (assuming you're referring to loans taken out to pay for the MSI year.
 
Yes, DS receive a 3 year AD scholarship which begins his sophomore year. This "forgiveness loan" was mentioned to him by one of the Cadre at his school and I want to be sure it is what it implies before he jumps in over his head. I have never heard of this and am just looking for more info.
 
When DS went for his AROTC interview, we were told that he could apply for federal loans in his name, and then after commissioning, he could convert a year of reserves into active duty, and the army would pay up to $25,000 of his loans. If he converted two years, they would pay up to $50,000, and if he converted 3 years, they would pay up to $60,000. That was the first time I had heard this, and it's a great deal if you plan on making the army at least a quasi-career. I just hope that they don't do away with that program.

I don't know if that's the same thing you were talking about, but it sounds similar.
 
bmunder said:
Yes, DS receive a 3 year AD scholarship which begins his sophomore year. This "forgiveness loan" was mentioned to him by one of the Cadre at his school and I want to be sure it is what it implies before he jumps in over his head. I have never heard of this and am just looking for more info.
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dunninia is correct about how the 3 year AD scholarship works, nothing is paid during the first year, also the cadet will be reviewed to make sure he is fulfilling his obligations his freshman year before the scholarship is activated and he is able to contract.

The loan repayment that Goarmymom is speaking of is something we have never heard of, we have a MS4 and MS1 student in the program right now. It sounds like it is a type of ADSO program. If you are counting on this for school I would make sure and talk with his PMS and you might also want to speak to the HR person in the battalion. If there is one thing I have learned dealing with the military is to make sure you find it in writing ahead of time. Things change quickly, with the budget cutbacks things could change real fast.

A lot of times there are restrictions for such an ADSO, they just don't hand them out, they are applied for, such as the ADSO for Grad School, and they are based on the cadets standing on the OML at the beginning of their senior year.

I am in no position to say that these programs don't exist, just that over the past 4 years we have never heard of anything like it. Just make sure things are as they have been described to you so there are no surprises. Remember that what is offered today can be taken away in a flash.

It would be interesting to hear Clarkson or Marsit weigh in on this subject.
 
Marist College ROTC said:
Info on this program can be found here:

http://www.finaid.org/loans/publicservice.phtml

I have not had any experience with this program. Does anybody know someone that actually utilized this program ?
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This doesn't sound remotely close to any of the programs mentioned above, I would sure check with the battalion any cadet attends before I would count on any loan repayment program.

Thanks for the info Marist.
 
The specific nature of this program as described in the linked circular tells me that this program, in all likelihood, no longer exists: it is an Incentive Program, and it is from 2008.

1) It is an INCENTIVE program to increase AD participation from 2008. 2008 was a time when we were in heavy build-up mode and Jr. Officers were leaving the Army in large numbers for civilian jobs after their initial 3 or 4 year Service Obligation. It is also a time when a lot of ROTC cadets were voluntarily choosing Reserves over AD b/c of the still excellent civilian employment opportunities in 2008 (which quickly changed in late 2008 and until the present). Presumably, this Incentive Program was conceptualized earlier than the circular, probably 2007 or earlier... ad this Circular is a little late actually as the Great Recession had already officially begun when it was issued.

2) Currently, 20-30% of ROTC cadets from this past May graduation, due to being bottom 50% in OML, were involuntarily barred from Active Duty, and directed into Reserves or Guard, because the Active Duty manpower targets are greatly reduced in 2011 -- due to our current drawdown in the military, all Branches, and projected at 15-20% in the Army.

If this program is actually being implemented this year, three years after it was described in the circular, I'll eat my keyboard :) It flies in the face of the logical use of Incentive Programs, which is to incent cadets to consider an action that is not popular. Why would the Army PAY a cadet to to increase his/her active duty service obligation at a time when they are simultaneously reducing the AD targets for commissioning cadets?
 
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Goarmymom said:
When DS went for his AROTC interview, we were told that he could apply for federal loans in his name, and then after commissioning, he could convert a year of reserves into active duty, and the army would pay up to $25,000 of his loans. If he converted two years, they would pay up to $50,000, and if he converted 3 years, they would pay up to $60,000. That was the first time I had heard this, and it's a great deal if you plan on making the army at least a quasi-career. I just hope that they don't do away with that program.

I don't know if that's the same thing you were talking about, but it sounds similar.
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We were told something similar by my DS' battalion when he went to sign all his 4-yr scholarship paperwork and run the APFT. How it was explained to us is if he were to stay in for an additional year of AD (he goes to an SMC), he could receive up to $25K to repay his Federal Student Loans. If he stayed in an extra 2 years, it was up to $50K, etc. We had no idea about this option. My wife and I looked at each other in disbelief as we were just explaining to our young DS that he would have around $20K in loans to pay back upon graduating. This is a great deal!
 
Bird85 said:
This is a great deal!
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Yes, it certainly would be!

However, if this particular form of ADSO is still around, I wonder why it is not referenced at this site, which lists ADSO options for: 1) Branch Choice, 2) Post Choice, and 3) Graduate school: http://www.career-satisfaction.army.mil/ Click on ROTC and you'll see the three ADSO options. Below, in the Contracts tab, are the three Contracts for the 3 choices. There is no mention of and ADSO to "Extend AD Service Obligation 1 Year" in exchange for loan repayment. This does not prove that this type of ADSO does not still exist, but one would assume that if it did, it would be included among the ADSO options available to commissioning ROTC cadets described at this website.
 
dunninla said:
Yes, it certainly would be!

However, if this particular form of ADSO is still around, I wonder why it is not referenced at this site, which lists ADSO options for: 1) Branch Choice, 2) Post Choice, and 3) Graduate school: http://www.career-satisfaction.army.mil/ Click on ROTC and you'll see the three ADSO options. Below, in the Contracts tab, are the three Contracts for the 3 choices. There is no mention of and ADSO to "Extend AD Service Obligation 1 Year" in exchange for loan repayment. This does not prove that this type of ADSO does not still exist, but one would assume that if it did, it would be included among the ADSO options available to commissioning ROTC cadets described at this website.
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I saw a post on a different forum, forum.military.com, that talked about the ADSO for $. From what I read about the program it was an ADSO that you applied for when you were Capt. promotable. The person posted that this ADSO was no longer available as an incentive to remain in the Army.

I'm with dunninia on this one. You have to remember that PMS's are not always up to the minute on what is available, news seem to trickle down slowly. I would make sure there is a program like mentioned above before I counted on those dollars. If you can't afford the first year without the program you are taking a big risk banking on something that may not be there. I asked my son about this and he said his PMS, which just started this year told him he was not told of any such program.

Again, there just might be something out there. My point is you will want to make sure it is available, the requirements, and if it will still be available when your son graduates. Things change quickly and the PMS may have old information.
 
Pages 9 and 10 of the Clarkson link shows an Application Form with a Form Date of Nov. 2006, so this was clearly an Incentive Program from the middle of the build-up years, when, as many have posted here, "ROTC scholarships were handed out like candy". Sure, this Student Loan Repayment ADSO Incentive Program could still be around, but if so, only because somebody fell asleep at the wheel (highly unlikely). Further, the upper right hand of the Application, page 9, shows "OMB Approval Expires Oct 31, 2009"
 
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dunninla said:
Pages 9 and 10 of the Clarkson link shows an Application Form with a Form Date of Nov. 2006, so this was clearly an Incentive Program from the middle of the build-up years, when, as many have posted here, "ROTC scholarships were handed out like candy". Sure, this Student Loan Repayment ADSO Incentive Program could still be around, but if so, only because somebody fell asleep at the wheel (highly unlikely). Further, the upper right hand of the Application, page 9, shows "OMB Approval Expires Oct 31, 2009"
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One other program I believe they have ended is the Capt. retention ADSO where they gave I believe 35K bonus for the extension of service. Something a lot of cadets didn't know at the time was if they used their ADSO for their branch or duty station they could not use it in the future.

I'm sure Clarkson will correct me if I am not entirely accurate.
 
Just spitballing here, but don't you think with all of the talk of RIFs, SERBS, reduction in scholarship money, that they would no longer do this due to the budget?

Even incentive bonuses, although they have always been around, it is something they can pull or delay whenever they want because it is done by yr group. Hence, they may have offered it to 2010/11 commissions, but might not offer it to 2012 since they may have met their quotas.

As dunninla stated it is an incentive. JMPO, but it would be pretty hard for the Army to rationalize doing this while at the same time cutting somewhere else in the AD world to meet their budget.

Additionally, I am going to jump off a limb here, but I would bet if it does exist, they have re-worked to be you have to fill X amount of conditions to be eligible for it...i.e. branch, rank, yrs in, so by the time you have filled it all many would be gone. It is there to get those that are sitting on the fence deciding to jump over to their side.
 
dunninla said:
If this program is actually being implemented this year, three years after it was described in the circular, I'll eat my keyboard :)
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I'm not certain if my DS' det is right on this or not, but after jumping into this thread yesterday, I reached out to the gentleman who briefed this program to us prior to Matriculation. He says it is a valid, currently funded program. Now, if you are an MS4, I'd do some more investigation. MS1's like my boy may not have this around in 4 years. I was sent 2 attachments, which I will copy and paste below. I'm not attempting to play "Topper" here, as I'd like to know the truth myself. It is similar to and does back up what Clarkson posted. I've got to say though that I'm pretty convinced it currently exists.

First Document:

STUDENT LOAN INFORMATION FOR ACTIVE DUTY SOLDIERS

PART I - AGREEMENT TO ACCEPT SLRP PAYMENT

1. GENERAL AGREEMENT. I hereby agree to meet and maintain the requirements outlined in my Army ROTC Contract (DA Form 597 or 597-3).

2. I agree that I have accepted the Student Loan Repayment Program (SLRP) and understand that an Additional Active Duty Service Obligation (ADSO) will be incurred upon repayment of any of my qualifying loans. The ADSO is based on amount repaid as follows: up to $25,000 incurs one-year ADSO; $25,001 to $45,000 incurs a two-year ADSO; $45,001 to $65,000 incurs a three-year ADSO. This ADSO is consecutive to any other ADSO incurred from any other programs. If I fail to fulfill any part of my military service obligation (MSO) or active duty service obligation (ADSO, if applicable), outlined in my Army ROTC Contract to include any ADSO incurred from loans repaid after I am commissioned, I will be required to reimburse the United States government through repayment of an amount of money, plus interest, equal to the entire amount paid by the United States.

1. Cadets are responsible for verifying that their loans are eligible in accordance with the information listed below: Cadet is responsible for contacting his/her loan holder to request a deferment or forbearance prior to signing any contract addendum.

2. ELIGIBLE LOANS: Only loans that qualify for a deferment or forbearance shall be considered for repayment under SLRP. Loans authorized repayments are:

a. Loans made, insured or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 USC 1071 et seq). Loans made under part D of such title (the William D. Ford Federal Direct Loan Program, 20 USA 1087a et seq).

c. Loans made under part E of such title (20 USA 1087aa et seq). Loans incurred for educational purposes where the lender is:

(1) An agency or instrumentality of a State. A financial or credit institution (including an insurance company) that is subject to examination and supervision by an agency of the United States or any state.

(3) A pension fund approved by the Under Secretary of Defense for Personnel and Readiness for the purposes of this program. A non-profit entity designated by a state, regulated by such state and approved by the Under Secretary of Defense for Personnel and Readiness for the purposes of this program.

3. Cadets need to provide the following information:

a. Name, address, and phone number of Loan Holder.

b. Total of Prior Payments

c. Original Date of Promissory Note

d. Original Loan Amount

Second document is an FAQ. I apologize as it is a bit lengthy:

Student Loan Repayment FAQs: 1)Can a student who currently does not have any student loans take one out now and then apply for SLRP? A: Yes they can, but SLRP is not guaranteed. Students are not offered the SLRP until after they have accessed onto Active Duty, so you must ensure they understand that if they are assessed Reserve Duty from the OML, they do not qualify for the SLRP. Once they have signed an agreement, no additional loans will be added to the loan repayment. 2) What is the deadline for requesting this option? A: There is no deadline for requesting the option up until they commission. 3) Is the cadet paid or the institution providing the loan? A: DFAS pays the loan holder. 4) Is the Student Loan Repayment Program taxable? A: Yes, DFAS will provide a W-2 at tax year end for payments authorized under the SLRP. 5) Is there a list of approved loans or lending institutions? A: There is no list of approved loans or lending institutions. If the loan appears to meet the criteria of the SLRP, submit it and the approval authority will make the determination. 6) Will cadets be reimbursed for parts of loans they have already paid? A: No only the unpaid balance of a loan is eligible for the SLRP. 7) When will a student know if they are eligible for the SLRP? A: After they are accessed, normally in the fall of their senior year; if accessed Active Duty then they will be eligible. 8)Is my Active Duty Service Obligation (ADSO) served consecutively or concurrently? A: ADSO associated with SLRP is served consecutively with statutory obligation. Non Scholarship Cadet has a three year obligation and Scholarship Cadet has 4 year obligation by statute; thus obligation would increase by 1, 2 or 3 years depending on Loan Repayment amount. 9) Does this loan pay the entire loans off that are approved to include the interest? A: This is stated on the Counseling Form - Loan repayment is principal only. The portion of the loan that may be repaid is 33 1/2 percent of the original unpaid principal balance or $1,500, whichever is greater. Payments will be made after each completed year of active duty (years of payment shall not exceed three years). 10) If a cadet had $20,000 paid off in student loans - and he/she were branched AV and going 6 yr active duty plus any additional training - which would make approximately 7 years - so they would add one extra year of active duty service, so now they would have approximately 8 years active duty, would their commitment be fulfilled or would they still need to have that additional year in the RV, NG, or IRR? A: If their ADSOs total to 8 years, then they are done, they have completed both their ADSO and MSO. If their ADSOs total to 7 years, then they have 1 year MSO left to complete and can completed in RV, NG or IRR.11) If an SMP cadet had previously received a student loan repayment through the guard - but only for a small amount ($500), can he still apply for this program as he still has outstanding student loans? A: Believe 4c answers this question, “cadet cannot have previously received a student loan repayment through the Army (i.e. prior service).”This includes ARNG, USAR or Active Duty Army. 12) Have a cadet who is applying for a student loan right now, what is the cut off for those wanting to take out loans right now? A: Loan repayment is offered after the student had gone through the Army ROTC Selection and Branching board. After they know they are going Active Duty or ANC, they have up until commissioning to sign up for the program. Once they sign the contract, they cannot add any new loans. 13) What is the due date for this paperwork to be in? A: There is no deadline or suspense for paperwork because the student can take their time to decide to sign up for the program. You must ensure it is documented and up to the EIB prior to commissioning. A reasonable suspense would be within 1 week of signing the contract addendums to ensure proper documentation with the authorities. 14) If prior service SMP cadets are getting current GI Bill and tuition assistance to go to college, but no former student loans paid off by the Army, does this constitute a "student loan repayment through the Army"? A: Neither the GI Bill nor tuition assistance is considered student loans; therefore, they do not constitute a "student loan repayment through the Army". 15) If a cadet is assessed Reserve Component and requests and receives approval for Active Component eligible for the Student Loan Repayment Program? A) Less than .01% of those that request AC prior to commissioning receive the approval, but for the .01% approved for AD, they can sign up for the SLRP between the date of the approval and prior to actual commissioning. After commissioning, the program is no longer available. 16) Does a commercial loan that is used for education qualify? A. Per HRC, Education Incentives Branch, there has to be proof (i.e. notarized by the loaning institution) that the loan was used for education.
 
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