The U.S. Education Department today reminded student loan lenders and guaranty agencies that active duty military personnel are not required to make student loan payments while deployed and encouraged colleges, universities and other postsecondary institutions to assist students and student loan borrowers who have been mobilized in recent military deployments.

"Many of the brave men and women serving our nation right now have put their personal lives on hold to answer the nation's call to duty," said U.S. Education Secretary Rod Paige.  "As they defend the freedoms we cherish, our soldiers should not have to worry about their student loan obligations and resuming their studies.  I am calling on the higher education and lending communities to be flexible and provide assistance to soldiers, so they can easily resume their studies and financial obligations after they complete their tours of duty." 

Paige added that borrowers should contact their lenders, schools or 1-800-4 FED-AID to find out how this guidance applies to their individual circumstances.

Federal regulations require lenders to postpone the student loan payments of borrowers who are active duty military personnel.  Lenders are encouraged to review each borrower's possible eligibility for an economic hardship deferment or a military deferment.   A deferment provides the extra benefit of excusing the borrower from paying the interest on the loan for the deferment period, but it is not available on all loans.  The regulations apply to student loans made under the Federal Family Education Loan, William D. Ford Federal Direct Loan and Federal Perkins Loan programs.

The law also requires that active duty military personnel who have not begun the repayment period on their loans continue to receive the benefit of a grace period (generally six months) before repaying their loans.  Students who were in school at the time of mobilization also must be given a reasonable period of time to resume school before lenders request student loan payments.  

The law applies to members of the National Guard and the Ready Reserves of the Armed Forces who have been called to active duty, and to active duty military personnel whose duty station has been changed as result of a military mobilization. 

As part of the department's regulatory action, colleges will not be required to collect financial aid funds that now-active duty students were given to pay for books and living expenses.  In addition, the department is strongly encouraging colleges and universities to provide either a full refund of tuition and other institutional charges or to give comparable credit against future charges to students forced to withdraw from school to fulfill their military obligations.  College officials are also being urged to offer flexible options to assist students wishing to re-enroll after they finish their tours of duty. 

In addition to issuing today's guidance, Paige praised the efforts of U.S. Rep. Howard P. "Buck" McKeon, R-CA, chairman of the House Education and Workforce Committee's Subcommittee on 21st Century Competitiveness, in passing the Higher Education Relief Opportunities for Students Act of 2001 (HEROS) following the Sept. 11 terrorist attacks, which gave the secretary temporary authority to extend relief to students and borrowers called up for military duty in response to that national emergency.  He also applauded McKeon's current efforts with U.S. Rep. John Kline, R-MN, to extend the authority of the HEROS Act beyond Sept. 30, 2003.

"I applaud Chairman McKeon and Congressman Kline for working to ensure that we are able to provide extra support and relief to the members of the Armed Services who are defending freedom around the world," Paige said.

Additional information on this and other department guidance is available by calling 1-800-433-3243.  A copy of the guidance is available at www.ifap.ed.gov.

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