USAA Student Loan Alternatives

The United Services Automobile Association (USAA) is a Texas-based financial institution offering members various financial products. To qualify, you must be a veteran, active-duty military service member, or immediate family member. 

Membership comes with useful perks like access to insurance products, travel discounts, full-service banking, and loans. Despite the benefits, USAA no longer offers student loans.

Why doesn’t USAA offer student loans?

USAA no longer offers student loans. In 2017, the company discontinued its partnership with Wells Fargo, which allowed it to issue private student loans to eligible members with a 0.25% discount. Many members are now looking for alternatives.

If you have a USAA student loan in repayment, the end of the partnership doesn’t impact you. You can keep repaying your loan as planned. But if you’re a USAA member looking for a student loan, consider other options. 

Here are the best student loan alternatives for military members. 

USAA student loan alternatives for military members

There are two types of student loans: federal loans and private loans. Before 2017, USAA offered private student loans, providing flexible funding for educational expenses. 

Private student loans are available to parents and students who qualify. Rates and terms depend on your credit score, loan amount, and other factors. 

As you search for alternative loan providers, consider these five lenders, including one specifically for military members and their families. 

Lender	Military focus	Rates (APR)
Navy Federal	Yes	5.50%+
College Ave	No	4.07% – 16.69%
Sallie Mae	No	4.07% – 16.70%
Earnest	No	5.52% – 16.85%

Navy Federal Credit Union: Best for military borrowers

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• Members-only credit union for the military community
• Borrowers cannot pause payments during school
• Borrowers can utilize Navy Federal’s Career Assistance Programs, including a resume builder

For military members, a student loan from Navy Federal Credit Union is the most similar option to a USAA loan. Like USAA, Navy Federal is a members-only credit union that caters to the military community in all 50 states. The company offers a simple online application process for undergraduate and graduate loans, and there are no fees.

You must be a member to apply for a loan. To be eligible for membership, you must be an active, retired, veteran service member or an immediate family member. Department of Defense (DoD) civilians can also become members. 

Cosigners aren’t required, but many student borrowers will need (or want) to add one to qualify for better loan terms. Navy Federal estimates nine out of 10 student loan customers have a cosigner.

Navy Federal requires borrowers to make interest-only or $25 monthly payments in school. The repayment term is 10 years. However, Navy Federal doesn’t charge a prepayment penalty, and you can request a cosigner release after 24 months of consecutive payments. 

College Ave: Best overall

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LendEDU rating: 5 out of 5

• Extensive loan options, including undergraduate, graduate, parents, and career training
• Choose your repayment term
• Loans for up to 100% of your education expenses

College Ave offers student loans to undergraduates, graduates, and parents. The lender also offers loans for career training programs. The loans can cover up to 100% of educational expenses, including tuition, books, and room and board. 

The lender offers four repayment term options—five, eight, 10, or 15 years. Borrowers can defer payments until after school or select one of three in-school repayment plans. Most borrowers require a cosigner to be eligible. After completing over half the scheduled repayment period, you can request a cosigner release. 

There are no application, origination, or prepayment penalties, and borrowers can get a 0.25% APR discount for setting up automatic payments. Even though the company offers competitive rates and terms, it doesn’t have specific benefits to service members.

Sallie Mae: Best for cosigners 

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LendEDU rating: 4.8 out of 5

• Earn a rate discount for enrolling in AutoPay
• Sallie Mae offers a shorter cosigner release period
• Recognizes the SCRA for active-duty military members

As one of the best-known names in educational financing, Sallie Mae offers private student loans with various features and benefits. The lender offers undergraduate and graduate loans, professional loans, and study loans. Terms range from five to 15 years. 

Cosigners are optional but are often necessary for students with a limited credit history or income. You can request to release your cosigner after 12 months of consecutive, on-time payments. There are no origination or prepayment penalties, and borrowers can enjoy a 0.25% APR discount for enrolling in automatic payments.

Sallie Mae recognizes the Servicemembers Civil Relief Act (SCRA) for active-duty military members in repayment. In addition to these benefits, which include deferment and forbearance, Sallie Mae also extends the SCRA interest rate for an additional year after the military service ends.

Earnest: Best for no fees 

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LendEDU rating: 4.7 out of 5

• Offers a nine-month grace period after graduation 
• Earnest offers a rate match guarantee
• There is a high student loan maximum of $500,000

Earnest is a solid lender with generous perks, including a nine-month grace period after graduation. During the grace period, you do not have to make payments toward your loan, which is helpful if you’re searching for a job or moving. 

The company also offers repayment terms ranging from five to 20 years, with no fees. The loan amounts range from $5,000 to $500,000, which provides additional flexibility as you apply for necessary funds. But Earnest does not allow cosigner release at any point, which might be a dealbreaker for some borrowers. 

For military members, Earnest honors the Servicemembers Civil Relief Act (SCRA) interest rate cap and automatically applies the discount by cross-referencing the client database with the Department of Defense Service Member Database.

How to manage your USAA student loans

If you already have an active USAA student loan, you will continue repaying the loan as planned. The fact that USAA no longer offers student loans does not impact your repayment plan. Here’s what you can expect as a borrower with a USAA student loan. 

How to repay USAA student loans

USAA isn’t issuing new student loans. But if you already have a USAA student loan, that doesn’t affect your repayment responsibilities. USAA acted as a third party to connect its members with Wells Fargo, so repayment of the loans will continue through Wells Fargo. 

The repayment schedule, interest rate, and other terms will remain unchanged, including the unique USAA rate discount members receive.

Borrowers can contact Wells Fargo Education Financial Services at 800-658-3567 with any questions or concerns about the loans.

Here’s how Wells Fargo can help: 

• Make changes to an established repayment plan
• Walk you through your options if you have trouble making payments
• Offer information about cosigner release requests

Repayment options for military members

As an active duty military member, many student loan repayment options and programs are available for your federal and private loan balances. Here are a few to consider.

Option	What it is
Servicemembers Civil Relief Act (SCRA)	To qualify, you must obtain the loan before beginning active duty military service. Interest rates are capped at 6%.
Higher Education Relief Opportunities for Students (HEROES)	Waive or change requirements of your federal student loans for active duty members.
Public Service Loan Forgiveness (PSLF) program	Public service employees can earn federal student loan forgiveness through qualified employment after making 120 qualifying payments.
The Temporary Expanded Public Service Loan Forgiveness (TEPSLF) opportunity	Student loan forgiveness for borrowers who qualify for PSLF but were enrolled in the wrong program.
Department of Defense (DOD) Student Loan Repayment Program	If you meet the criteria, the Department of Defense can repay all or a portion of your student loans .
Veterans Total and Permanent Disability (TPD) discharge	Veterans with permanent disabilities can qualify for loan discharge.

How to refinance USAA student loans 

You can refinance your USAA student loans with a new lender to lower your interest rate or change your repayment plan. But doing so will likely remove your USAA rate discount. So before refinancing, ensure your new rate is lower than the one you have.

You might consider refinancing private student loans for the following reasons:

• To lower your interest rate and save on interest charges
• To extend your repayment term to lower your monthly payment (This may increase the total cost of your loan, though.)
• To simplify your repayment by combining multiple loans into one
• To release a cosigner from the loan
• To add a cosigner to get better loan terms

When you refinance student loans, you pay off your current loans with the new funds. Afterwards, you have a new private student loan.

Most lenders don’t charge refinance fees, so you won’t need to factor in application or origination fees. If a lender does, that could be a red flag. None of the companies we picked as the best for student loan refinancing charge these fees.

FAQ

Why did USAA stop offering student loans?

USAA announced in 2016 that it would cease offering student loans to its members. The company didn’t give a comprehensive explanation, but the decision was likely the result of a combination of factors. 

Economic shifts, changing markets, and a decision to focus on its core insurance business could have driven this move. Now, USAA directs its members to other financial institutions for student loan services.

Does USAA refinance student loans?

USAA no longer provides any student loan refinancing options. It offered this service in the past but decided to discontinue it, much like its original student loan product. As a result, members needing to refinance their student loans have to seek alternatives. 

This might seem like an inconvenience, but numerous student loan refinancing options exist at traditional banks and online lenders.

Can I get USAA student loan consolidation?

Despite once having student loan consolidation as part of its product lineup, USAA discontinued this service along with its other student loan options. 

Members can’t consolidate their student loans through USAA, but you can meet your student loan consolidation needs with plenty of other reputable lenders. Be sure to research each institution to ensure it fits your requirements and offers you the best possible terms.

Recap of USAA student loan alternatives