As a result of the increased deployment of U.S. troops abroad, NASFAA has received Member inquiries pertaining to student reservists. Of particular interest are regulations related to loan deferment for students in the reserves who are being called up for active duty.
While no new guidance is currently available from the Department of Education, officials there are encouraging financial aid administrators with questions about student reservists to refer to a series of three Dear Colleague letters posted to the Department's Information for Financial Aid Professionals (IFAP) library in the days following the Sept. 11, 2001 terrorist attacks.
For your convenience, the letters are also available on the NASFAA Web Site's September 11 Resource Page.
The guidelines contained in the first of the three letters (GEN-01-11) address the immediate needs of borrowers who are in repayment on federal student loans, provide guidance to Title IV loan holders on the granting of forbearances and discharges to affected borrowers, and give guidance on the treatment of defaulted borrowers who have been affected by the disaster.
The second letter (GEN-01-12) outlines deadline extensions and new policies for those affected by the September 11 attacks. Specifically, it granted extensions (on the FISAP filing deadline, the final Pell reporting deadline, and the deadline for reporting Pell Grant disbursement records) for institutions that, because of the attacks, were unable to comply with one or more Title IV reporting requirements.
The third letter (GEN-01-13) provides guidance on the treatment of military personnel who are activated or reassigned for a period of more than 30 days. It outlines new guidance for borrowers whose Title IV loans are in an in-school, in-school deferment, or grace period status; borrowers whose loans are in repayment (other than in an in-school deferment status); and borrowers whose loans are in default.
GEN-01-13 also states that the Soldiers' and Sailors' Civil Relief Act of 1940 only applies if a FFEL lender or guaranty agency is suing a borrower who is covered by the Act, and encourages schools to provide a full refund or a credit of tuition and fees for students who are forced to withdraw from school as a result of the military mobilization.
[The fourth letter referenced in the three Dear Colleague Letters was never published.]
Lastly, the September 11 Resource Page links to a Health and Human Services announcement regarding relief for schools, lenders, and holders participating in the health professions and nursing financial aid programs authorized under Titles VII and VIII of the Public Health Service Act.
NOTE: Also see the January 27 NASFAA article NASFAA Provides More Clarification on Return of Title IV Funds for Student Reservists Called to Active Duty.
By Elizabeth B. Guerard
NASFAA Assistant Director of Communications
Posted January 8, 2003 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2003.
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