The Higher Education Relief Opportunities for Students (HEROES) Act of  2003 was enacted to recognize the difficulties that postsecondary students  and federal student financial aid recipients serving on active duty may  experience in transitioning in and out of college and repaying their student  loans. Education Has Issued Waivers and Modifications to Provide Relief for Aid Recipients Serving on Active Duty, but the Impact of These Changes Is Not Known

Education has implemented HEROES by waiving and modifying certain  federal student financial aid provisions to ease the financial impact and  administrative burden of meeting aid obligations for recipients serving on  active duty. The extent to which servicemembers are benefiting from these  waivers and modifications is not known, however, because Education has  not collected key information that would allow it to assess the impact of  these changes as required by HEROES. Moreover, students who  leave school for active duty service are considered to be still enrolled in  school, which means that they do not yet have to begin repaying their  student loans. Borrowers in repayment no longer have to  provide their lender written documentation of active duty service to have  loan repayment suspended for up to 1 year. Figure 1 illustrates the options  available to suspend or postpone loan repayment for federal student loan  borrowers serving on active duty. 2.) While HEROES does not specify how Education  should go about assessing the impact of its waivers and modifications,  Education officials interpreted the Act as requiring a rigorous  experimental design that they say would be costly and cannot currently be  supported with Education’s data systems. Therefore, Education currently  has no plans to complete the required study. Lenders Are Assisting Borrowers as Required by Education and Some Are Providing Additional Benefits

Lenders have a variety of policies and practices in place designed to  provide relief for federal student loan borrowers serving on active duty,  many of which are required under Education’s waivers and modifications. To minimize the financial impact on borrowers, lenders provide them with  options to suspend or postpone repayment on their student loans. Additionally, one Pennsylvania-based lender has  extended benefits beyond the requirements of HEROES by offering loan  forgiveness for servicemembers who have lived in Pennsylvania or  attended college there. Most Schools Have Had Students Leave for Active Duty and Have Policies in Place to Aid Their Departure and Return

The majority of colleges and universities have had students who left  school for active duty service before the end of their academic term and  have policies to assist these students when they leave and when they  return to school. 3). Based on these checks, we believe our survey data are  sufficiently reliable to be used in determining the policies or practices  schools have in place to assist students who are called to active duty.
Why GAO Did This Study

million members of the armed forces have been deployed in service to the United States. Congress enacted the Higher Education Relief Opportunities for Students (HEROES) Act to recognize the needs of those servicemembers who are deployed in the midst of pursuing postsecondary education or repaying student loans. GAO was asked to determine (1) how the Department of Education has implemented HEROES, (2) the policies and practices federal student loan lenders have in place to assist borrowers serving on active duty, and (3) the policies and practices postsecondary schools have to assist students who are serving on active duty. To address these objectives, GAO interviewed representatives from the nine largest Federal Family Education Loan program lenders, surveyed a random sample of postsecondary schools, and visited four colleges and universities.

What GAO Found

Education has issued waivers and modifications to certain federal student financial aid provisions to minimize the financial impact and administrative burden for servicemembers on active duty, for example, by making it easier to postpone or suspend loan payment. Students who leave school for active duty service are treated as still enrolled to ensure that they do not have to begin repaying their student loans. Borrowers already repaying their student loans no longer have to provide written documentation of active duty service to suspend repayment for up to 1 year. However, Education did not complete a study to assess the extent to which servicemembers are benefiting from these waivers and modifications by March 2005, as required by HEROES, and currently has no plans to do so. While HEROES does not specify how Education should go about assessing the impact of its waivers and modifications, Education officials said that such a study would require a rigorous experimental design that would be costly and cannot be supported with Education's data systems. However, Education has not explored the possibility of leveraging outside data sources to fulfill the requirement. Federal student loan lenders have implemented policies and practices, many of which are required under Education's waivers and modifications, to provide relief for borrowers serving on active duty. For example, lenders reported that they provide options that allow borrowers to suspend or postpone repayment of their student loans, often with one telephone call. Some lenders are providing additional benefits beyond those covered by HEROES. For example, one lender offered to forgive $2,500 in loans for servicemembers who have lived or attended college in Pennsylvania. Most colleges and universities have had students leave for active duty service prior to the end of an academic term, and have policies or practices to assist them both when they depart and when they return, such as providing tuition refunds and allowing them to withdraw from their classes. When students return, schools often guarantee their readmission and exempt them from changes to degree requirements.