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Saturday, November 21, 2020

Financial Aid Programs for Military Service Members and Their Families

My dad joined the US military when I was 16 and already living out of the house, so I don't really know what it's like to have the experience as living as the child of military members (other than the fact that he phoned in to my sister's wedding from Iraq but fortunately 4 weeks later was able to be at my wedding), but I do know some benefits that I have from that, like when I had free health insurance at over 18. Even now that he left the army, I benefit by being able to bank with USAA, one of the better banks out there that only servicemembers and families can use. Here's a post from a reader about some other benefits you don't want to miss out on if you're a military family.


Service members face a range of threats—from lethal to financial and even emotional threats. And parents, they’re often concerned about ensuring that their family is financially stable while confronting lethal threats on the war front. 

Parenting as a Military service member or the spouse of one exposes you to a lot of special financial challenges that most individuals don’t encounter. However, the federal government and military authorities have an impressive array of special benefits, legal protections, and tax breaks that can help cushion those challenges.

Here are some financial aid programs that are available to military service members and their families.

1.Free College for Yourself, a Spouse or Kid

When it comes to sending your kids to college, parenting gets sweeter when you’re in the military. The Post-9/11 GI Bill covers the full cost of study for military personnel, spouses, and their kids if they opt to study at public colleges. Those studying in foreign schools and private colleges can also enjoy up to $25,162 intuition and other academic fees.

You’re at liberty to use the money for either graduate or undergraduate programs or for certain programs like trade, vocational, and other special studies.

2. Student loan repayment

Believe it or not, the army can actually pay a significant part of your student loan debt if you qualify for it as army personnel. This is done by the army Loan Repayment Program (LRP), and it’s an incentive given to highly qualified applicants that are enrolling in the army. Only army personnel in any of the Military Occupational Specialties will qualify for the Loan Repayment Program. For more information on student loan repayment program, yougo through this article as it’s explained in a step-by-step guide that can help you get the best out of it.

3. No-money down mortgages

Most mortgages require the borrower to make down payments and to have private mortgage insurance. However, a military family has access to VA Home loans that get rid of these bottlenecks. VA Home loan program is specifically created for veterans, Servicemembers, and eligible spouses to become a homeowner. VA Home loans also help to repair, build, retain, or adapt the home for optimum usage of the home occupants.

This loan is mostly facilitated by mortgage companies and banks. VA stands as a guarantor for the eligible applicant, which helps the applicant to reduce the cost of getting the mortgage—there is no doubt that the military offers one of the best ways to reduce mortgage costs.

4. Tax-Free Housing Allowance

Another top-notch advantage that service members, spouses, and their children have isa tax-free housing allowance. The allowance is paid monthly to subsidize the monthly mortgage payment and rentas long as the applicant remains serving military personnel.

The value of the subsidy depends on so many factors, some of which are the rank of the applicant, the number of dependents, and the residence of the applicant. Details of the Basic Allowance for Housing and other allowances can be seen on the Leave and Earning Statement. You can also check the Department of Defense’s BAH calculator by looking entering your zip code and rank.

5. Special Legal Protections

Here’s a program that’s designed to reduce your cost of purchasing a loan and hiring legal assistance. Servicemembers and their families can enjoy some special legal benefits and an interest rate cap of 6% on loans taken before enrolling in the military.

This program is specifically designed for members of the military Reserves that are listed in active duty and will suffer a reduction in their monthly income for leaving their jobs.

To enjoy this benefit, you’ll have to make an application with the lender. Also, if you’re asked to relocate with your family to another location, you can invoke the law and terminate an apartment lease. With this program, you can shore up the funds in your account by cutting rent while you take a pay cut.

6. Regular State Tax Breaks

There is a law that allows Military Servicemembers to maintain their legal residence in a state, even when they’re stationed in another state. Thus, you can bea legal resident in a state without an income tax; this will shield you from taxes in your new state. A spouse with the same domicile as a service member can also maintain that legal residency in an instance where they’re relocating due to a compulsory military relocation order.

7. Roth Deposits that are tax-free

For a widerange of individuals, they’ll have to pay tax from their contribution to a Roth IRA. However, service members that are getting tax-free combat-zone pay will have their money going into Roth free of tax. Also, contributions and earnings will be tax-free.

If your income is not higher than a specified limit, you’re allowed to make a contribution that’s no higher than $6000. Also, if you have a spouse that’s not employed, you’re allowed to make a contribution that is up to the specified maximum amount on your spouse’s behalf.

8. Cheap Life Insurance

The military takes the life of their service members, their spouse, and their kids seriously. As such, service members can access one of the lowest-cost life insurance programs in the market.

The insurance program is called Servicemembers’ Group Life Insurance, and it’ll cost a service member a mere $300 to subscribe to a maximum benefit of $400,000. This benefit stands irrespective of their health, age, and place of deployment.

For their spouse, they have access to a maximum of $100,000 yearly by just paying $54/annum as a subscription fee. And according to the Department of Veteran Affairs, spouses that are older than 35 will be required to pay more than those below that age.

Conclusion

The military has some interesting benefits for veterans, serving military service members, their spouse, and kids. As such, if you fall within the range of individuals that qualify for these benefits, then you should judiciously make use of them.

Some of them are designed to reduce your expenses and create a suitable environment for your kids to thrive.

Are you a military family or former military family? Do you know of any more benefits that you'd like to share with other military families that may be reading this? Which of these have you taken advantage of, and which do you want to look into more?

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