Thursday, September 20, 2001

U.S. Calls for Reprieves to Student-Loan Borrowers Affected by Jetliner Attacks By STEPHEN BURD Washington The U.S. Education Department announced on Wednesday that it has directed lenders to take steps to ease the repayment burdens of those student-loan borrowers who may have been affected by last week's terrorist attacks. "As a government, we have pledged to help meet the needs of New Yorkers and other victims of the terrorist attack, and the steps we are announcing today will provide financial relief during these extraordinary circumstances," said Education Secretary Roderick R. Paige. As part of the efforts, the department has mandated that lenders grant "forbearance" to borrowers living or working in New York City for the next four-and-a-half months. As a result, borrowers in the city's five boroughs will be granted a hiatus on their loan repayments through January 31. The department is also directing lenders to provide forbearance to borrowers outside New York City who were affected by any of the terrorist attacks or hijackings. Those borrowers will have to contact their lenders before being temporarily relieved of their repayment obligations. Department officials said they are acting because of the difficulty of determining which borrowers will ultimately qualify to have their loans canceled altogether because of how the attacks disrupted their lives. For example, the government forgives the loan debt of borrowers who suffer permanent disabilities. Under the department's guidance, lenders are to alert borrowers in New York City that they have been granted forbearance on their loans. Some borrowers may want to resume repayment, because while the payment obligation is suspended, interest on the loans continues to accrue. The department is also encouraging lenders to use reliable information to forgive the loans of borrowers who are known to have died from the attacks. Normally, a family must provide an original death certificate or a certified copy of one before a loan could be forgiven by the government. But because of the exceptional circumstances, lenders may rely on such documents as obituary notices or lists of the dead provided by federal, state, or local governments, or by one of the affected airlines, to determine which loans to cancel. The department plans to issue further guidance in the next few days on terrorism-related issues affecting student-aid recipients. Among other things, the department is planning to exempt needy students who are called up for military service from rules that require those who drop out of college to repay to the government portions of the financial aid they have not used. Easy-to-print version E-mail this article

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