Benefits Available to U.S. Servicemembers
Members of the armed forces have several options available, depending upon your individual situation.
Servicemembers Civil Relief Act (SCRA)
The SCRA limits the interest on student loans that were acquired prior to military service to no more than 6%. If you are currently serving or have served on active duty, contact us to see if you qualify for benefits on the student loans you took out prior to active duty through the Servicemembers Civil Relief Act (SCRA). Or, you can send a copy of your military orders, along with a signed and dated letter requesting the 6% interest rate to us.
P.O. Box 82546
Lincoln, NE 68501-2546
Email: loans@nelnetbank.com
In the event that active-duty orders are not available, we can accept any document prepared exclusively by a branch of the military, the Department of Defense, or a commanding officer that indicates the borrower is on active duty.
Military Lending Act (MLA)
The Military Lending Act (MLA) says that you can’t be charged an interest rate higher than 36% on most types of consumer loans. It also provides other significant rights.
The MLA applies to active-duty servicemembers (including those on active Guard or active Reserve duty) and covered dependents.
Your rights under the MLA include:
- A 36% interest cap.You can’t be charged more than a 36% Military Annual Percentage Rate (MAPR),
which includes the following costs in calculating your interest rate (with some exceptions):
- Finance charges
- Credit insurance premiums or fees
- Add-on products sold in connection with the credit
- Other fees like application or participation fees, with some exceptions.
- No mandatory waivers of consumer protection laws. A creditor can’t require you to submit to mandatory arbitration or give up certain rights you have under State or Federal laws like the Servicemembers Civil Relief Act.
- No mandatory allotments.A creditor can’t require you to create a voluntary military allotment in order to get the loan. An allotment is an automatic amount of money taken from your paycheck to pay back your loan.
- No prepayment penalty.A creditor can’t charge a penalty if you pay back part (or all) of the loan early.