Consumer Financial Education for Military and Veterans
Military and veteran families face unique financial challenges during and after their service. These educational tools and resources can help servicemembers during every stage of their military career and service.
Military Lending Act
The Military Lending Act (MLA) is a Federal law that provides special protections for active duty servicemembers like capping interest rates on many loan products with annual rates over 36 percent.
What are my rights under the MLA?
The MLA applies to active duty servicemembers (including those on active Guard or active Reserve duty), spouses, and certain dependents. It limits the interest rates that may be charged on many types of consumer loans to no more than 36% and provides other important protections.
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 costs like the following in calculating your interest rate (with some exceptions): finance charges, credit insurance premiums, add-on credit-related products sold in connection with the credit, fees like application fees, participation fees, or fees for debt cancellation contracts (with some exceptions).
- No mandatory waivers of certain legal rights. 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.
- No prepayment penalty. A creditor can’t charge a penalty if you pay back part – or all – of the loan early.
What types of loans are covered under the MLA?
In 2015, the Department of Defense (DoD) expanded by rule the types of credit products that are covered by the MLA. In general, the consumer credit products now covered when offered to active-duty servicemembers and their covered dependents include, but are not limited to:
- Payday loans, deposit advance products, tax refund anticipation loans, and vehicle title loans.
- Overdraft lines of credit but not traditional overdraft services.
- Installment loans but not installment loans expressly intended to finance the purchase of a vehicle or personal property when the credit is secured by the vehicle or personal property being purchased.
- Certain student loans.
- For credit cards, creditors didn’t have to comply with DoD’s new rule until October 3, 2017.
What types of loans are NOT covered under the MLA?
There are some loans the MLA doesn’t cover – namely, credit that is secured by the property being purchased and certain other secured loans. These loans generally include:
- Residential mortgages (any credit transaction secured by an interest in a dwelling), including financing to buy or build a home that is secured by the home, mortgage refinances, home equity loans or lines of credit, or reverse mortgages;
- A loan to buy a motor vehicle when the credit is secured by the motor vehicle you are buying; and
- A loan to buy personal property when the credit is secured by the property you’re buying, like a home appliance.
Housing Assistance For Veterans
U.S. Department of Housing and Urban Development-VA Supportive Housing (HUD-VASH)
This collaborative program between HUD and VA combines HUD housing vouchers with VA supportive services to help Veterans who are homeless and their families find and sustain permanent housing.
How it works: Through public housing authorities, HUD provides rental assistance vouchers for privately owned housing to Veterans who are eligible for VA health care services and are experiencing homelessness. VA case managers may connect these Veterans with support services such as health care, mental health treatment and substance use counseling to help them in their recovery process and with maintaining housing in the community. Among VA homeless continuum of care programs, HUD-VASH enrolls the largest number and largest percentage of Veterans who have experienced long-term or repeated homelessness.
Homeless Providers Grant and Per Diem (GPD) Program
State, local and tribal governments and nonprofits receive capital grants and per diem payments to develop and operate transitional housing—including short-stay bridge housing—and/or service centers for Veterans who are homeless.
How It Works: VA funds an estimated 600 agencies that provide over 14,500 beds for eligible Veterans. Grantees work closely with an assigned liaison from the local VAMC. The VA GPD liaison monitors the services the grantees offer to Veterans and provides direct assistance to them. Grantees also collaborate with community-based organizations to connect Veterans with employment, housing and additional social services to promote housing stability. The maximum stay in this housing is up to 24 months, with the goal of moving Veterans into permanent housing.
Learn more about the Grant and Per Diem (GPD) program.
Enhanced-Use Lease (EUL) Program
Too many Veterans are without safe, affordable housing. At the same time, some VA campuses have real estate that is underused. That’s where VA’s Enhanced-Use Lease program may come in.
How it works: EUL is a VA portfolio management tool that allows certain land and buildings to be leased to eligible private entities for approved supportive housing and related projects for homeless and at-risk Veterans. In addition to supportive housing, VA’s EUL partners often provide Veterans with job training, financial management, haircuts, computer and laundry facilities, fitness centers and other services. Veterans and their families are prioritized for EUL developments, which are also convenient to VA health care facilities.
Learn more about the Enhanced-Use Lease Program.
Supportive Services for Veteran Families (SSVF)
For very low-income Veterans, SSVF provides case management and supportive services to prevent the imminent loss of a Veteran’s home or identify a new, more suitable housing situation for the individual and his or her family; or to rapidly re-house Veterans and their families who are homeless and might remain homeless without this assistance.
How it works: Through referrals and direct outreach, nonprofit agencies and community cooperatives use SSVF funding to quickly house Veterans and their families who are homeless and keep others from slipping into homelessness by providing time-limited supportive services that promote housing stability. Case management includes help securing VA and other benefits such as educational aid and financial planning.
Learn more about Supportive Services for Veteran Families (SSVF).
Military and Veteran Homeownership
Owning a home can be an overwhelming process if you are not familiar with the basics. We’ve gathered some helpful tips and resources to help you budget and apply for a mortgage, as well as some government-sponsored assistance programs for first time home buyers, low income buyers, and renters.
- Mortgage Loans
- Looking to buy a home
- Already have a home
- Mortgage and Rental Assistance
VA Home Loans
The VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.
VA Home Loans are provided by private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.
- Purchase Loans Help you purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance. Cash Out Refinance loans allow you to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements.
- Interest Rate Reduction Refinance Loan (IRRRL): Also called the Streamline Refinance Loan can help you obtain a lower interest rate by refinancing your existing VA loan.
- Native American Direct Loan (NADL) Program: Helps eligible Native American Veterans finance the purchase, construction, or improvement of homes on Federal Trust Land, or reduce the interest rate on a VA loan.
- Adapted Housing Grants: Help Veterans with a permanent and total service-connected disability purchase or build an adapted home or to modify an existing home to account for their disability.
- Other Resources: Many states offer resources to Veterans, including property tax reductions to certain Veterans.
The Servicemembers Civil Relief Act (SCRA)
The SCRA is a law created to provide extra protections for servicemembers in the event that legal or financial transactions adversely affect their rights during military or uniformed service. These protections enable servicemembers to devote their entire energy to the defense needs of the Nation. The SCRA applies to the following servicemembers:
- Active duty members of the Army, Marine Corps, Navy, Air Force, and Coast Guard;
- Members of the Reserve component when serving on active duty;
- Members of the National Guard component mobilized under federal orders for more than 30 consecutive days; or
- Active duty commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration.
- Servicemembers can reduce the interest rate on any pre-service loans to a maximum of 6 percent.
- Servicemembers have some protections against default judgments in civil cases.
- Servicemembers have special protections against foreclosure on their home.
- Servicemembers have special protections against repossession of their property.
- Servicemembers may be able to terminate residential housing and automobile leases without penalty.
Military and Veteran Educational Benefits
Montgomery GI Bill
Education benefits through the Montgomery GI Bill are available to those enlisted in the US Armed Forces, including selected reserve. Veterans must have been honorably discharged to qualify. Upon enrolling, you pay $100 for 12 months to receive a monthly education benefit upon completion of the minimum service obligation. You are then eligible for up to 36 months of benefits. These benefits are paid to you directly. You have up to 10 years after active duty to receive these benefits.
Learn more about GI Bill benefits.
Post-9/11 GI Bill
Often considered to be the most beneficial solution for veterans, the Post-9/11 GI Bill is available to those who were active duty service members with at least 90 days of aggregate service after September 11, 2001. Veterans must have been honorably discharged to qualify. If discharged due to a service-connected disability, you’re eligible if you served for at least 30 days at the time of discharge. Like the Montgomery GI Bill, this bill provides up to 36 months of benefits but unlike the Montgomery GI Bill, tuition and fees are paid to the school directly, with only the monthly housing allowance and books and supply money going to the student. If you left the service before Jan. 1, 2013 you have up to 15 years after active duty to receive these benefits, if you left the service after that date your benefits never expire.
Learn more about the Post-9/11 GI Bill benefits.
If you are attending a private school, your costs may be more than the VA will reimburse. To rectify this, there is something called the “Yellow Ribbon Program” This is aid offered by an individual school to ensure that the veteran’s costs are covered if the GI Bill doesn’t cover them all. However, there is no guarantee for receiving tuition assistance through this program – you have to choose a school that offers it (and therefore has a partnership with the VA) and then that school gives the aid out on a first come, first serve basis.
Learn more about the Yellow Ribbon Program.
Servicemembers and their Student Loans
Servicemembers have special options that could save them money and make it easier to pay off their student loans. The Consumer Financial Protection Bureau has worked closely with the Department of Education to ensure servicemembers get their student loan benefits.
Reduce your student loan interest rate to 6 percent
Under the Servicemembers Civil Relief Act (SCRA), servicemembers can reduce their interest rate to 6 percent on all pre-service obligations, including student loans, while they are on active duty. The lower interest rate can be requested up to 180 days after leaving service, and the lower interest rate will be applied retroactively for the entire period of your active-duty military service. Learn more on Tackling student loan debt.
Protections for federal student loans – Zero percent interest for service in an area of hostile fire
If you served in an area of hostilities and received special pay, your federal student Direct Loans qualify for a 0 percent interest rate during that deployment if they were made on or after October 1, 2008. The benefit can be applied retroactively, so it’s not too late to contact your servicer after deployment to find out about what documentation you need to provide. Learn more on Tackling student loan debt.
Perkins Loan Forgiveness
Borrowers with a Federal Perkins Loan who serve in an area of hostilities for more than 12 months straight may be eligible to have their loan balance reduced for each qualifying year of service. Learn more on https://studentaid.gov/manage-loans/forgiveness-cancellation/perkins.
For federal student loans, you can defer payment during certain periods of military service. A deferment just means you’re postponing payment. Depending on the type of loan you have, you may have to pay back unpaid interest at the end of the deferment, or it will be added to your outstanding loan balance.
For subsidized federal student loans, the Department of Education will pay the interest for you when you use a military deferment. Learn more on Tackling student loan debt page 2.
Income-Driven Repayment (IDR) plans
Read more about IDR plans on our Student Loan financial education resources page.
HEROES Act waiver
The Department of Education waives many of the documentation requirements for the programs it administers for servicemembers during certain periods of military service. For example, while IDR plans require annual recertification of your income and family size, servicemembers can sometimes have this requirement waived. The HEROES Act waiver allows your servicer to simply recertify your eligibility during certain periods of military service. So if you are on a payment plan based on your income, and military service prevents you from providing updated information on your family size and income, you can request to have your monthly payment amount maintained. Contact your servicer to learn more.
Public Service Loan Forgiveness (PSLF)
Active duty servicemembers (and veterans) meeting certain requirements may have the balance of their federal student loans forgiven after working in public service for ten years.
Learn more about PSLF on our Student Loan financial education resources page.
Submit a Complaint Regarding your Student Loan
You may submit a complaint if your school or employer is failing to follow the Principles of Excellence. The Veterans Affairs (VA) will review the following types of complaints:
- Recruiting/Marketing Practices – Quality of Education
- Accreditation – Grade Policy
- Financial Issues (e.g. Tuition/Fee charges) – Release of transcripts
- Student Loans – Transfer of Credits
- Post-Graduation Job Opportunities – Refund Issues
- Change in Degree Plan/Requirements – Other
Veterans also face the challenge of receiving the benefits they are rightfully due from Veteran Affairs. Long, bureaucratic delays hamper veterans’ abilities to successfully transition into civilian life. If you are a veteran who finds yourself struggling to pay the bills after your service, resources also exist to help out in any situation. Here are a few:
- The American Legion provides cash grants for children of service members as financial assistance for emergency aid.
- Operation First Response and The Coalition to Salute American Heroes are both organizations that provide financial assistance for veterans
- USA Cares is an organization that helps keep veterans in their homes.
- Disabled American Veterans is an organization geared towards those who have become disabled in their duty.
The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The DFPI updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be additional resources that also serve your needs.
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