What are CLRP Member Obligations?

The Military College Loan Repayment Program or CLRP is designed to provide incentives for college graduates and students to join the armed forces. The program repays a portion of the student or enlistee’s outstanding loan obligation, including Perkins, Stafford and PLUS loans during the time that the enlistee is in the military.

Each of the branched of the armed forces including Army, Navy, Air Force and Marine Corps offers the CLRP.  The requirements and reimbursement amounts vary depending on the branch.  The loan program can pay up to the maximum amount established by Congress.  The largest amount is $30,000 offered by the Army and $20,000 is the amount typically offered by other branches.  

Member Obligations

An enlistee, as a member of the armed forces has certain obligations that must be met in order to remain in good standing and receive reimbursements under the program.  The program begins making payments on the unpaid principal loan amount after the member has remained enlisted for a period of 1 year.  Additionally, the member is obligated to remain enlisted in active or reserve duty and remain current on all obligations to the program.

Member’s Loan Must Be in Good Standing

The member's loan must be in good standing and not be in default status.  This includes late payments and penalty charges as these conditions will suspend loan payments.  The member pays the loan fees and interest that accrues on the loan.  The amount paid by the military branch is paid directly to the lender, less an amount that is withheld for taxes.  The remaining balance that is not paid by the military is the obligation of the member.  The amount that is subject to taxation appears on a W-2 that is given to the member for tax purposes.

Military Service

The member participating in the program as an enlistee is required to fulfill there obligation to the military.  This military service can be for a period of 3 or 4 years minimum, depending on the branch and 6 years for members of the reserve. This requirement is necessary to ensure that the military receives value for the amount that it pays for the enlistee in order to participate in the loan program.

A student or graduate participating in the program should check with the branch of service that they are entering or the lender making the loan for additional details on the CLRP.  The CLRP provides a way for a member to receive some relief from their outstanding loan obligation.  This relief is in exchange for the required military service necessary to fulfill the member’s obligation.

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