Are you active duty military? Do you have student loans? Once again, Uncle Sam has got your back. You may qualify for a student loan deferral (that means, you may be able to get a breather from having to repay your loan while you are active duty).
The College Cost Reduction and Access Act (CCRAA), enacted on September 27, 2007, created a new deferment in the FFEL, Direct Loan, and Federal Perkins Loan programs for members of the National Guard or Armed Forces Reserve, and members of the Armed Forces who are in a retired status, who are called or ordered to active duty service. Effective October 1, 2007, these borrowers may receive a deferment on repayment of their title IV loans for up to 13-months following their completion of active duty military service if they were enrolled in a postsecondary institution at the time of, or within six months prior to, their activation. The deferment period for these borrowers expires at the earlier of a borrower’s re-enrollment in school or the end of the 13-month period.
Unlike a borrower receiving the Military Service Deferment, a borrower receiving the Active Duty Student Deferment is not required to have been activated during a war or other military operation, or national emergency, or performing qualifying National Guard service during a war or other military operation or national emergency. The term “active duty” has the same meaning as it has in section 101(d)(1) of title 10, United States Code, but does not include active duty for training or attendance at a service school. Under the CCRAA, members of the National Guard may qualify for this deferment for:
* Title 32 Full-Time National Guard Duty under which a Governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to State active duty and the activities of the National Guard are paid for by federal funds; or
* State active duty under which a Governor activates National Guard personnel based on State statute or policy, and the activities of the National Guard are paid for by State funds.
Until the U.S. Department of Education issues regulations implementing this deferment, for purposes of this deferment the term “enrolled” means at least half-time enrollment and “active duty” must include at least 30 consecutive days of service, excluding training. Eligible National Guard service does not include employment in a full-time, permanent position in the National Guard unless the borrower employed in such a position is reassigned as part of a Title 32 call to State active duty.
Many borrowers who are eligible for this deferment may have also received the Military Service Deferment. If a borrower has already received the Military Service Deferment, a lender or school may grant the 13-month deferment to a borrower without an additional request from the borrower or the borrower’s representative if the lender has documentation that: (1) demonstrates that the borrower was a member of National Guard or reserves or was in a retired status from the Armed Forces when entering active duty military service; (2) establishes an end-of-military service date; and (3) establishes the borrower’s enrollment status at an eligible institution prior to the borrower’s military activation. If the 13-month deferment is granted without a separate request from the borrower, the lender must send a notice to the borrower advising the borrower of the deferment and providing the borrower the opportunity to decline the deferment. The 180-day extended military service deferment period and 13-month post-active duty service deferment periods will run concurrently for such a borrower.