Like many Americans, thousands of military veterans struggle with mounting debt. Deployment absences and other inescapable misfortunes provide a unique challenge for those who serve in the Armed Forces, and often these events leave a string of debt for hard-working soldiers.
Though the U.S. Department of Veterans Affairs offers many different financial assistance opportunities and training courses for veterans in need, the department is swamped with clients. Service is often a very long process. Here are a few alternative options for veterans struggling with debt.
Military Debt Consolidation Loan
If a service member already has a VA loan, especially if it was utilized to purchase a home, then that veteran is automatically qualified for a Military Debt Consolidation Loan (MDCL). MDCLs are different from civilian consolidation loans because the credit is typically more than is owed.
Loan amounts are based on the equity in the property purchased with the VA loan. The obvious drawback is that the home will lose a bit of equity and the overall debt will rise, but MDCLs offer lower interest rates and a wide range of repayment options.
The GI Bill and Education
Anyone who has served their time in any one of the four branches of the United States Military is eligible to receive funding for higher education. Though financial aid for school does not directly pay off mounting debts, earning an education can open up new employment opportunities.
The Post-9/11 GI Bill will pay tuition directly to the chosen university and a housing stipend directly to the student. The bill covers up to 36 months of schooling fees and can be utilized up to 15 years after the veteran has completed their service.
Financial Hardship Resources
In the case of an emergency financial hardship, several organizations will provide services quickly for military veterans and their families. The American Legion offers cash grants for kids of service members for emergency funding purposes.
Operation First Response and The Coalition to Salute America’s Heroes will provide emergency assistance for veterans facing shutoff of utilities or eviction from their home. Also, USA Cares is a place that provides support for veterans in their home. They help a broad range of issues stemming from military service.
Service Members Civil Relief Act
For service members that cannot pay their debts while they are at war, the Service Members Civil Relief Act was passed in the early 1940’s. The law specifies that creditors are not legally entitled to pursuing foreclosure, eviction, or garnishment while service members are deployed for war. Military personnel is not required to resume financial actions until 60 days after they return from active duty.