Home Encyclopedia Standards of Excellence Reauthorization LearnStudentAid.org Parents & Students
 
NASFAA
1101 Connecticut Avenue, NW, Suite 1100
Washington, DC 20036-4303

Phone: 202-785-0453
Fax: 202-785-1487
Web@NASFAA.org

Higher Education Associations Voice Concern About Amendment To Veterans' Benefits Improvement Legislation

NASFAA joined six higher education associations to voice concern about an amendment that is expected to be offered to the Veterans' Benefits Improvement Act of 2008 (S. 3023).

The amendment, S. 1718, would allow servicemembers who have their higher education interrupted by military service to have their tuition reimbursed, loans deferred, and loan interest rates reduced.

While the amendment is well-intentioned, it inadequately compensates service men and women for their service and will be confusing and complicated to implement.

A provision in the proposed amendment would give students called to active duty the right to a refund of the portion of tuition and fees that had been paid by the student's personal funds or loans, if the student's military service prevents him or her from receiving credit. Provisions in the amendment conflict with HEA requirements, such as the return of funds calculations when a student withdraws. The return of funds rules may require an institution to return a certain percentage of the student's Title IV aid back to the Title IV programs, first reimbursing the loan programs. The proposed amendment to the SCRA would seem to require a refund of some of the same funds back to the student. This confusion and complexity will cause the amendment to accomplish less than its supporters hope to achieve, according to the higher education associations.

"The amendment is at odds with the statute and detailed regulations under the Higher Education Act (HEA) in a couple of respects - most notably, the requirements governing the return of federal student aid funds," according to a letter signed by NASFAA and the other higher education associations. "We support efforts to give special status to students called up to active military duty, but giving schools one set of requirements under the HEA and compelling veterans to sue colleges that do not comply with an undefined, alternative set of terms and conditions does little to help our schools assist these students at an extremely difficult time in their lives."

To eliminate this potential confusion the associations recommend that lawmakers reconcile the differences between the two conflicting provisions.

"We would be pleased to participate in discussions about how to accomplish this goal with staff from the Veterans' Affairs Committee, the Committee on Health, Education, Labor and Pensions, and the service member advocacy groups," the letter states.

The associations also recommend the federal government do more to help servicemembers with their education loans.Servicemembers are owed more than just a deferment. The federal government should completely cancel any loan that was disbursed for a period of enrollment that the student was unable to complete because of military service, and should pay any interest that accrues during that service on all federally guaranteed loans whether they were originally made as subsidized or unsubsidized loans.

"There is ample precedent for the federal government rewarding service in this fashion - the cancellation of loans for those who teach in high-need areas is but one current example," the letter states.

The amendment would also require institutions to refund the portion of tuition and fees that came from the servicemember's personal funds and from loans. This would have three implications:

  1. By being silent on other sources of payment, the amendment's sponsors seem to believe institutions would be allowed to keep grants that were used towards tuition. That would not necessarily be the case because of the Return of Title IV Funds requirements. The Department would have to waive the applicability of the R2T4 requirements altogether, but even then there would be lingering difficulties.

  2. Because the HEA requires very specific treatment of federal loans in the context of returning loan funds to the lender, there is an inherent conflict set up for the treatment of loan funds - does the school return the funds to the lender first or refund them to the student first?

  3. Mandating so specific a treatment of funds could preclude an institution from working out other arrangements with the student that might be better for that individual's circumstances.

    A complete copy of the letter is below this summary of S. 1718

    S. 1718 would:

    • Provide a 13-month transition period for servicemembers to reenroll in a program of education they had to drop out of to serve and to begin paying back student loans taken for that program;

    • Institute a 6 percent interest rate cap on servicemembers' student loans while they are deployed on active duty; and

    • Require institutions to provide reasonable accommodations to students who discontinue a program of education because of a deployment, by:

      • Refunding tuition and fees paid by the servicemember for the portion of the program that they did not receive academic credit for because of military service; and
      • Provide servicemembers an opportunity to reenroll in the program with the same educational and academic status when they discontinued the program due to military service.

    June 25, 2008

    The Honorable Daniel K. Akaka The Honorable Richard Burr
    Chairman Ranking Member
    Committee on Veterans' Affairs Committee on Veterans' Affairs
    United States Senate United States Senate
    Washington, D.C. 20510 Washington, D.C. 20510

    Dear Chairman Akaka and Ranking Member Burr:

    I write on behalf of the higher education associations listed below to comment on S. 1718, which will be offered as an amendment to S. 3023, the Veterans' Benefits Improvement Act of 2008, during the markup of this legislation. Together our associations represent the nation's 4,300 two- and four-year, public and private colleges and universities. We can attest to their strong commitment to creating supportive and welcoming environments for the nation's service men and women to further their educational goals.

    We deeply appreciate the desire of this committee to ensure that the men and women serving our country in one of the military branches are not forced to jettison their academic pursuits in order to fulfill their service obligations. Our organizations have worked long and hard as part of a broad-based coalition of educational and veterans organizations to secure passage of a modernized GI Bill and we are pleased that the FY 2008 Supplemental Appropriations bill will bring this effort to fruition. We want to thank Senator Webb and all the members of this committee for your hard work on behalf of this landmark legislation. We also support the efforts being discussed by this committee to remove obstacles that may be encountered by those in the National Guard and the Reserve to interrupt and resume their education as they are called up to serve our country.

    As you consider the amendment that will be offered by Senator Brown, we would like to offer several observations about the legislation. First, our primary concern is that this bill falls short of the mark in adequately compensating our service men and women for the debt the nation owes them for their willingness to serve our country. To truly discharge the obligation these individuals have incurred by their service, we believe the federal government on behalf of all its citizens should discharge the outstanding federal student loan balance that a student incurs for the term during which he or she is called up, along with all the accruing interest on any student loans previously taken out. There is ample precedent for the federal government rewarding service in this fashion - the cancellation of loans for those who teach in high-need areas is but one current example.

    Second, while the amendment is well-intentioned, it will be confusing and complicated to implement, and as a result, it will accomplish less than its supporters hope to achieve. The confusion stems from the fact that the amendment is at odds with the statute and detailed regulations under the Higher Education Act (HEA) in a couple of respects - most notably, the requirements governing the return of federal student aid funds. We support efforts to give special status to students called up to active military duty, but giving schools one set of requirements under the HEA and compelling veterans to sue colleges that do not comply with an undefined, alternative set of terms and conditions does little to help our schools assist these students at an extremely difficult time in their lives.

    Whether or not the amendment is adopted and ultimately enacted into law as written, we believe that there should be a concerted effort made to reconcile the differences between these two conflicting provisions and we would be happy to participate in any conversations that seek to do this. We would be pleased to participate in discussions about how to accomplish this goal with staff from the Veterans' Affairs Committee, the Committee on Health, Education, Labor and Pensions, and the service member advocacy groups.

    Our colleges and universities have been fully engaged in the effort to accommodate the unique and trying circumstances faced by students who are called on to serve the country in one of the uniform services. They have gone to great lengths to be compassionate and generous in their treatment of military personnel. As this bill moves forward, we would like to work with you to ensure that we achieve our mutual goals with regard to fairly and appropriately serving those who serve our nation.

    Sincerely,

    Terry W. Hartle
    Senior Vice President

    On behalf of:
    American Association of Community Colleges
    American Association of State Colleges and Universities
    American Council on Education
    Association of American Universities
    National Association of Independent Colleges and Universities
    National Association of State Universities and Land-Grant Colleges
    National Association of Student Financial Aid Administrators

    Media Coverage

    By Haley Chitty
    NASFAA Assistant Director of Communications

    Posted 06/30/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.