Loan Burdens Eased for Military Officers

By STEPHEN BURD

The U.S. Education Department said last month that it had directed lenders to temporarily suspend the loan obligations of student-loan borrowers who have been activated for military duty because of the recent terrorist attacks.

The secretary of education, Roderick R. Paige, also called on colleges to refund tuition and other fees to students who are forced to withdraw from college to fulfill their military obligations. The department's actions are aimed at helping members of the National Guard and the military reserves.

"The young men and women who serve our country have an enormous job to do in the coming months," said Mr. Paige. "The actions we are taking today will ease their financial burdens as they defend our country."

Under the policy, student-loan borrowers will not have to make payments while on active duty, and the government will assume the interest payments on their subsidized loans while they serve. Military employees called to active duty whose loans are not yet in repayment -- because they are students or have only recently left college and are still in the grace period -- will receive deferments on their loans while they serve, meaning that they will not have to make payments and interest won't accrue during that time.

The department also said that it would exempt needy students who are called for military service, or who withdraw from college as a direct result of the terrorist attacks, from rules that require those who drop out of college to repay student aid they have not used.

In addition to encouraging colleges to provide full refunds to students who leave to serve in the military, Mr. Paige urged institutions to offer flexible re-enrollment options to those students and to others who have been forced to withdraw.

"Many people's families and livelihoods have been dramatically changed by recent events," he said. "I hope the nation's colleges and universities will give people time and flexibility to return to their normal routines and activities."

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