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Serving Those Who Serve

Serving Those Who Serve. Moderator – Kristi Davis , Edfinancial Presenter – Fernando Conejo , Texas Veteran’s Commission Presenter – Ed Brandt , Xerox Education Services. Veterans Education. Fernando Conejo Veterans Education Coordinator Fernando.conejo@tvc.texas.gov.

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Serving Those Who Serve

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  1. Serving Those Who Serve Moderator – Kristi Davis, Edfinancial Presenter – Fernando Conejo, Texas Veteran’s Commission Presenter – Ed Brandt, Xerox Education Services

  2. Veterans Education Fernando Conejo Veterans Education Coordinator Fernando.conejo@tvc.texas.gov

  3. Financial Aid Benefits and Waivers

  4. GI Bill Chapters • MGIB Chapter 30 – Montgomery GI Bill • MGIB Chapter 31 – Vocational Rehabilitation • MGIB Chapter 33 – Post 9/11 GI Bill • MGIB Chapter 1606 – Selected Reserve • MGIB Chapter 1607 – Reserve Educational Assistance Program • MGIB Chapter 35 – Dependents Education Assistance/Fry Scholarship

  5. 36 Months of Benefits • GI Bill Chapters provides 36 – 45 months of educational benefits • Generally, these benefits expire 10-15 years after release from active duty • Monthly benefit paid depending upon training time

  6. GI Bill Monies Paid by VA • Chapter 31 – Tuition and Fees paid directly to the school • Monthly housing allowance paid to student (amount varies by ZIP Code of school) • Chapter 33 – Public Schools – All tuition and fees paid directly to school – NO CAP • Private Schools – Money capped at $21,085 per academic school year • Book stipend of $1,000 per academic year paid • Monthly housing allowance paid to student (amount varies by ZIP Code of school) • Chapters 30, 35, 1606, and 1607 – Money is paid directly to the student. No money paid to the school

  7. Hazlewood Tuition Exemption • State of Texas program for eligible Texas Veterans and their dependents • Tuition and Fee Exemption for 150 Semester Hours at Texas Public Schools

  8. HEROES Act of 2003 • Provides ED with specific waiver authority to assist borrowers affected by a war, military operation, or national emergency • Made permanent on 9/30/07, via P.L. 110-93 • Supporting regulations last updated on 9/27/12, via 77 FR 59311; in effect through 9/30/17 • Resources: • Federal Register (9/27/12): http://www.ifap.ed.gov/fregisters/attachments/FR092712.pdf • Detailed NCHER Summary: http://c.ymcdn.com/sites/www.ncher.us/resource/collection/F4EAF7F5-F223-4EC9-9C0E-5511898606A6/HEROESWaiversTable02082013.pdf

  9. HEROES Act of 2003 • Four “categories” of affected individuals • Category 1: borrowers who are • Serving on active duty or performing qualifying National Guard duty during a war or other military operation or national emergency • Living or working in an area declared a disaster area in connection with a national emergency, or • Suffering economic hardship as a direct result of a war or other military operation or national emergency

  10. HEROES Act of 2003 • Category 2: same as Category 1, minus borrowers who are only experiencing a financial hardship • Category 3: borrowers who are serving on active duty or performing qualifying National Guard duty during a war or other military operation or national emergency • Category 4: dependents or spouses of people who are on active duty or performing qualifying National Guard duty during a war or other military operation or national emergency

  11. HEROES Act of 2003 Financial Aid waivers under HEROES: Need Analysis based on more current total income (Cat. 1) Greater Professional Judgment flexibility (Cat. 1) Verification of AGI and Taxes Paid (Cat. 1) Waiver of grant overpayment return requirement (Cat. 1) Postwithdrawal disbursement choice window (Cat. 2) Title IV credit balance handling (Cat. 2) Larger loan cancellation request window (Cat. 2) Verbal student/parent Title IV fund authorization (Cat. 2) Greater flexibility re. institutional charges & refunds (Cat. 3) Parental verification signatures (Cat. 4) Alternate signatures for FAFSA, SAR, and ISIR (Cat. 4) 11

  12. Benefits and Waivers During In-school and Grace Periods

  13. Military Grace Extension Qualifications Must be in grace or in-school status when called Must be a Reservist called or ordered to active duty for more than 30 days Duration No single extension can exceed 3 years Borrower would receive their full grace period following any extension that did not extend beyond three years Borrowers serving beyond the 3-year term could potentially use the Military Deferment and Post-Active Duty Student Deferment 13

  14. HEROES Act of 2003 Waivers available during in school/grace: Leave of Absence writtenrequest requirement (Cat. 2) Satisfactory Academic Progress (Cat. 2) Up to three-year extension of grace period (Cat. 2) Up to three-year extension of in-school period (Cat. 2) 14

  15. Benefits and Waivers During Loan Repayment Periods

  16. Servicemembers Civil Relief Act (SCRA) • 6% interest rate benefit under 50 U.S.C. 527 made applicable to FFELP and Direct loans as of 8/14/08, via passage of the Higher Education Opportunity Act (HEOA) • Available to borrowers who performed or are performing federally funded active duty service under Title 10, and in some cases Title 32, Section 502(f), of the United States Code 16

  17. SCRA - Applicability • Covers full-time members of the Army, Navy, Air Force, Marine Corps, and Coast Guard, as well as reservists, National Guard members, commissioned NOAA officers, and commissioned Public Health Service officers, while such members are either on active duty or are “absent from duty on account of sickness, wounds, leave, or other lawful cause” (50 U.S.C. 511) • Applies to a loan as long as at least one party to the loan (primary borrower, jointly liable co-maker, or secondarily liable endorser) is a qualifying servicemember • If all parties to a loan are active duty servicemembers, the SCRA benefit period would begin on the earliest active duty start date and end on the latest active duty end date among those servicemembers 17

  18. SCRA – Eligibility Criteria • Applies only to active duty periods after 8/13/08 that begin/began after the date a loan was first disbursed. • For example, if a servicemember was on active duty for two separate periods of time, and they acquired their student loan during the first period or between the two periods, he/she would qualify for the SCRA protection only during the second period. • A Consolidation loan’s eligibility is based on when the borrower applied for the Consolidation loan, not on when the underlying loans were first disbursed • However, a borrower who obtains the SCRA benefit on his/her underlying loans can consolidate those loans during the benefit period and permanently “lock in” the reduced rate. 18

  19. SCRA – Benefit Period • SCRA benefit period is as follows: • For full-time military members and commissioned NOAA and Public Health Service officers, the period of qualifying military service • For reservists and qualifying National Guard members, the period from when the member received their mobilizing orders (generally accepted as the date of the orders) through the end of the military service period 19

  20. SCRA – Interest Charges • “Interest”, for purposes of the 6% rate benefit, includes service charges and fees (such as late charges and collection fees) • Any such interest accrued above the 6% rate is permanently forgiven (cannot be charged back to the servicemember later on) • Monthly payment generally must be reduced by the amount of interest saved during each month of the covered period • EXCEPTION: if the borrower is already paying either the minimum $50 payment under a level payment plan or a pre-determined payment amount under an income-driven or income-sensitive plan. 20

  21. SCRA – Special Allowance • During SCRA benefit periods: • Commercially held FFELP loans that were first disbursed prior to 7/1/08 remain eligible for special allowance based on the maximum statutory interest rate, even when the actual rate is reduced to 6% • Commercially held FFELP loans that were first disbursed on or after 7/1/08 are eligible for special allowance based on the reduced interest rate under the SCRA 21

  22. SCRA – Pre-8/25/14 Process • Benefit attainment process/parameters prior to 8/25/14: • Borrower must initially submit an explicit request for the benefit and a copy of their orders, no later than 180 days after completing their qualifying military service • Servicers can use the Defense Manpower Data Center’s SCRA database, but only to confirm the specific dates of active duty service and/or extend an existing benefit, and only when the borrower had already provided an initial request and copy of orders • Benefit only covered the military service period and not also the period between the date of the orders and the active duty start date (even in the case of reservists and qualifying National Guard members), though in the event of an unclear military service period the earliest and latest dates stipulated in the orders could be used 22

  23. SCRA – Process Effective 8/25/14 • Benefit attainment process effective 8/25/14: • These permissions were established in Dear Colleague Letter GEN-14-16, dated 8/25/14 • Each commercial FFELP servicer is permitted to periodically run its entire database of borrowers through the DMDC’s SCRA database to identify SCRA-eligible borrowers and grant each such borrower the 6% interest rate benefit for the specified active duty period. • The servicer must notify each borrower of the benefit application and retain a record of the DMDC match in the borrower’s file • Servicers are no longer required to first obtain an explicit request and copy of orders from the borrower 23

  24. SCRA – Process Effective 8/25/14 • Benefit attainment process effective 8/25/14 (continued): • SCRA benefit periods identified in this fashion are not subject to the 180-day notification rule under the SCRA, meaning benefit periods which ended more than 180 days ago can still be applied • For reservists and Guard members, the benefit period must begin on the date of the orders, or the Order Notification Start Date in the SCRA database • For full-time military members and commissioned NOAA and Public Health Service officers, the benefit period must begin on the first date of active duty service • This proactive process is mandatory for all federal servicers 24

  25. SCRA – Process Effective 7/1/16 • Benefit attainment process effective 7/1/16: • Each commercial FFELP holder and federal servicer is required, at least monthly, to run its entire database of borrowers through the DMDC’s SCRA database to identify SCRA-eligible borrowers and grant each such borrower the 6% interest rate benefit for the specified active duty period. • The servicer must notify each borrower of the benefit application within 30 days and retain a record of the DMDC match in the borrower’s file • Borrower is not required to provide a request with orders, unless his/her service is not in the SCRA database or he/she disagrees with the active duty service period listed in the database. 25

  26. SCRA – Process Effective 7/1/16 • Benefit attainment process effective 7/1/16 (continued): • If borrower does provide orders or a certified federal form, the servicer must apply the longest possible benefit period between all of the information received, regardless of how outdated some of the documentation may appear to be • The benefit start date must be the Order Notification Start Date (for reservists and Guard members) or the active duty start date (for all other servicemembers) • The 180-day notification rule is eliminated, even for borrower-initiated requests 26

  27. SCRA – Process Effective 7/1/16 • Benefit attainment process effective 7/1/16 (continued): • Regardless of the type of service performed, the active duty service period must be at least 31 consecutive days in duration in order to qualify for the 6% interest rate benefit • Loans that are already paid in full do not need to be included in the DMDC database match, but if a loan that was outstanding at the time of the match became paid in full before the benefit was applied, and the application of the benefit created a credit balance, the credit balance must go to the borrower or consolidating lender (depending on how the loan was paid off) • It is not necessary to do multiple DMDC checks to identify all of the active duty service periods dating back to 8/14/08, but the borrower can request the benefit for such periods by providing supporting documentation 27

  28. The DMDC’s SCRA Database • https://www.dmdc.osd.mil/appj/scra/ • This database is the official source of servicemembers' active duty status for the purpose of SCRA compliance • It enables you to input identifying information along with a specific Active Duty Status Date and determine if the individual: • Is on active duty on the date in question, • Has left active duty within 367 days of the date in question, or • Was notified of call-up to active duty before the date in question • Includes active duty dates from September 30, 1985 to present • Reports Title 10 active duty periods of more than 30 days in length • Cannot be used for other student loan benefits (like the Military Deferment) that have a more restrictive set of eligibility criteria 28

  29. SCRA - NCHER Initiatives • NCHER members remain very active in trying to establish industry best practices: • 6/9/11: Joint letter from NCHER, SLSA, CBA, and EFC to ED recommending greater flexibility in helping borrowers obtain SCRA benefits • 6/27/11: ED responds and permits use of earliest and latest dates in orders (when service period unclear) and limited use of the DMDC’s SCRA database to obtain specific benefit periods • Ongoing: SCRA Best Practices workgroup, working to establish uniform best practices where possible under the new guidelines first established on 8/25/14 and codified in the new Final Rule 29

  30. Military Deferment - Overview • Available to all FFELP borrowers who are performing qualifying service • No cumulative time limit • Generally no time limit per request, except for the service period being certified at that time (or confirmed by military order) • Deferment covers qualifying service period, plus 180 days in cases where an actual demobilization date is provided 30 30

  31. Military Deferment - Eligibility Qualifying active duty service is service by a borrower who is: • A Reserve member ordered to active duty under 10 U.S.C. 12301(a), 12301(g), 12302, 12304, or 12306, or a retired member ordered to active duty under 10 U.S.C. 688, for service in connection with a war, contingency operation, or national emergency • An active member reassigned to a duty station away from where they are normally assigned, in connection with a war, contingency operation, or national emergency. • “Active duty” excludes active duty for training or attendance at a service school 31 31

  32. Military Deferment - Eligibility Qualifying National Guard duty is service by a borrower who is: • On full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5), under a call to active duty service authorized by the President or Defense Secretary for a period of more than 30 consecutive days under 32 U.S.C. 502(f). This training or other duty must be in connection with a war or other military operation, or a national emergency declared by the President and supported by federal funds. 32 32

  33. Military Deferment - Other Other features of the deferment: • Can be requested by the borrower, or by a representative of the borrower • Initial 12 months can be requested by the borrower or borrower’s representative, even verbally, without supporting documentation • Eligible for simplified processing, provided servicer can accommodate the same exact deferment period that was granted by ED or the other FFELP servicer 33 33

  34. Military Deferment – NCHER Initiatives • There remain a number of challenges related to the Military Deferment, such as interpreting orders to determine if they indicate deferment-eligible service and what constitutes a “demobilization” for purposes of the 180-day deferment extension • NCHER members will be convening a workgroup in the months ahead, in an effort to work through these difficulties and establish best practices 34 34

  35. Post-Active Duty Student Deferment • Service: National Guard, retired member or other reserve component ordered to active duty, including active State duty. • Borrower: Must have been enrolled at an eligible school at least half-time when ordered to active duty, or no more than six months prior to the date of the order 35 35

  36. Post-Active Duty Student Deferment • Request: • Can also be requested via the federal MIL form • Length: • 13 months after conclusion of active duty service period • If borrower qualifies for both 180-day Military Deferment extension and PADS deferment, the periods run concurrently • Deferment ends immediately if borrower returns to school on at least a half-time basis during the 13 months 36 36

  37. Other Deferments • Armed Forces Deferment: • Available to pre-7/1/93 Stafford and SLS borrowers and PLUS loans made before 8/15/83; max 3 years; requires only active duty military service • Public Health Service Deferment • Available to pre-7/1/93 Stafford and SLS borrowers and PLUS loans made before 8/15/83; max 3 years; borrower must be a full-time officer in the Service • National Oceanic and Atmospheric Association (NOAA) Deferment • Only available to “new Stafford and SLS borrowers” between 7/1/87 and 6/30/93; max 3 years; borrower must be on active duty status • Three years are a combined life-of-loan maximum for all three deferments • ED is discontinuing the PUB form that included these older deferments, due to the dearth of still-eligible loans. 37 37

  38. HEROES Act of 2003 Waivers during loan repayment (all Cat. 2): In-school or Fellowship Deferment extension (3 yrs) Mandatory Administrative Forbearance (15 mos.) Suspension of collections on defaulted loans Teacher Loan Forgiveness eligibility (no re-start) Loan rehabilitation payment progression (no re-start) Reinstatement of Title IV loan eligibility (no re-start) Consolidation of defaulted loans (no eligibility re-start) Extension of IDR annual payment period (39 mos.) 38

  39. Forbearance Options • DOD Loan Repayment Program eligibility: • Mandatory forbearance that suspends payments while borrower performs qualifying military service • Applies to all repayment programs administered by the DOD • National Guard State Duty • Mandatory forbearance that suspends payments while borrower performs National Guard State Duty • Applies to borrowers who qualify for a Post-Active Duty Student Deferment after their military service ends but not a Military Service Deferment or other deferment during the service period itself • Either forbearance can be applied for via ED’s SERV form

  40. Forbearance Options • Military Mobilization • A Mandatory Administrative Forbearance available to any reservist or National Guard member who is activated under 10 U.S.C. 688, 12301(a) & (g), 12302, 12304 or 12306, or to any other military member who is temporarily assigned to a new duty station in conjunction with a Reserve or National Guard mobilization • The eligibility period is stipulated and communicated by the guarantor or ED, and the forbearance must be applied for that period plus 30 days • The borrower must provide documentation proving eligibility

  41. Public Service Loan Forgiveness • Established as part of the CCRAA; applies to Direct Loans only • Forgives remaining balance of the loan after the servicemember has served for 120 months on/after 10/1/07 and made 120 on-time payments under one or more of the following payment plans • An income-driven plan (ICR, IBR, PAYE, or REPAYE) • The 10-year Standard plan or any equivalent thereof • The 10/30/15 Final Rule added payments made on the borrower’s behalf under any of the DOD’s Loan Repayment Programs as qualifying payments toward forgiveness • For more information: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualifying-payment

  42. No Accrual Of Interest Benefit • Applies to Direct Loans first disbursed on/after 10/1/08 • Available to borrowers who are • Performing qualifying duty during a war, military operation, or national emergency; and • Serving in a hostile area that qualifies for special pay under 37 U.S.C. 310 • Stops the accrual of interest on each eligible loan for up to 60 months while the borrower performs qualifying military service • For more information: https://studentaid.ed.gov/sa/types/grants-scholarships/military

  43. Armed Forces Student Loan Repayment Program • When offered by the Services, members must decline in writing, GI Bill benefits • None are offering this program at the current time • Enlist in one of the critical military occupational specialties. These change quarterly. • Army and Navy will repay up to $65,000 • Air Force will repay up to $10,000 • Each year of service, the service will pay 33 1/3 or $1,500 whichever is greater, on total unpaid principal balance • Handout provided

  44. More Information • NCHER Servicemember Info • http://www.ncher.us/?page=e2149 • Contains additional information on many of the benefits discussed in this presentation, and more!

  45. Questions?

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