When borrowers enter active military duty, they may be eligible to have the interest rate on their loans reduced to 6.0% under the Servicemembers Civil Relief Act (SCRA).  Under the SCRA, any interest above 6% on eligible borrowers’ loans must be permanently forgiven and the borrowers’ monthly payment reduced by the amount of interest saved during the period of active duty. The 6% interest rate cap remains in place during the term of the borrower’s active military duty.  

The rate cap is removed on the day following termination of the borrower’s active duty, at which time the interest rate will revert to the original rate associated with the loan. The 6% rate cap is only available to eligible borrowers who received their loan prior to being called to active military duty and whose military service duty affects their ability to pay the loan at the regular (pre-active duty) interest rate.