HEROS Act Amendment 2007

Deferment – Armed Forces (see section 11.3 and Figure 11-1):
Certain borrowers are entitled to defer principal payments on a FFELP loan for periods not to exceed 3 years when the borrower is on active duty status in the U.S. Armed Forces, or a member of the National Guard or Reserves serving a period of full-time active duty in the Armed Forces. To qualify for deferment, the borrower must provide the loan holder with documentation establishing his or her eligibility for the deferment. (See section 11.3 for detailed information about military deferment criteria.) The Department modifies the 3-year cumulative limit on armed forces deferment so that the time during which affected individuals are serving on active duty is excluded from the time limit. The Department pays interest that accrues on subsidized Stafford loans during an extended deferment period under this Appendix H: History of the FFELP and the Common Manual—April 2007 H.4.A HEROES Act Waivers modification. In addition, the Department waives the requirement that a borrower request the deferment. A loan holder may grant deferment to an affected individual based on a request from a family member or other reliable source. Further, the Department waives documentation requirements to allow a loan holder to grant an affected individual an armed forces deferment for a 1-year period without documentation. In order to grant a military deferment beyond the initial 1-year period, the loan holder must obtain supporting documentation from the borrower, a member of the borrower’s family, or another reliable source.

Forbearance (see subsection 11.22.B):
A loan holder must require a borrower who requests mandatory administrative forbearance because of military mobilization to provide documentation showing that the borrower is subject to a military mobilization. The Department waives this requirement to allow a borrower to receive forbearance at the request of the borrower, a member of the borrower’s family, or another reliable source, for a one-year period, including a 3-month transition period that immediately follows, without providing the loan holder with documentation. In order to grant the borrower forbearance beyond this initial, fifteen-month period, the loan holder must obtain documentation supporting the borrower’s military mobilization. 20. Rehabilitation of Defaulted Loans (see section 13.7