United States Government Accountability Office

GAO Report to Congressional Requesters

 

HIGHER EDUCATION

More Information 

Could Help Education 

Determine the Extent 

to Which Eligible 

Servicemembers 

Serving on Active 

Duty Benefited from 

Relief Provided by 

Lenders and Schools

November 2006 

GAO-07-11 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2006

HIGHER EDUCATION

More Information Could Help Education 

Determine the Extent to Which Eligible 

Servicemembers Serving on Active Duty 

Benefited from Relief Provided by 

Lenders and Schools 

Highlights of GAO-07-11, a report to 

congressional requesters 

Since September 11, 2001, over 1.3 

million members of the armed 

forces have been deployed in

service to the United States.

Congress enacted the Higher 

Education Relief Opportunities for

Students (HEROES) Act to

recognize the needs of those 

servicemembers who are deployed

in the midst of pursuing

postsecondary education or

repaying student loans. GAO was 

asked to determine (1) how the 

Department of Education has 

implemented HEROES, (2) the

policies and practices federal 

student loan lenders have in place

to assist borrowers serving on 

active duty, and (3) the policies and

practices postsecondary schools 

have to assist students who are 

serving on active duty. To address 

these objectives, GAO interviewed 

representatives from the nine 

largest Federal Family Education 

Loan program lenders, surveyed a 

random sample of postsecondary 

schools, and visited four colleges 

and universities. 

What GAO Recommends

GAO recommends that the 

Secretary of Education undertake

the congressionally mandated 

study to determine the extent to 

which eligible servicemembers are 

receiving assistance under 

HEROES. 

Education agreed with the report’s 

findings and said the

recommendation has merit.

Education has agreed to explore 

options for conducting the study. 

Education has issued waivers and modifications to certain federal student 

financial aid provisions to minimize the financial impact and administrative 

burden for servicemembers on active duty, for example, by making it easier 

to postpone or suspend loan payment. Students who leave school for active 

duty service are treated as still enrolled to ensure that they do not have to 

begin repaying their student loans. Borrowers already repaying their student 

loans no longer have to provide written documentation of active duty service

to suspend repayment for up to 1 year. However, Education did not 

complete a study to assess the extent to which servicemembers are 

benefiting from these waivers and modifications by March 2005, as required 

by HEROES, and currently has no plans to do so. While HEROES does not 

specify how Education should go about assessing the impact of its waivers 

and modifications, Education officials said that such a study would require a 

rigorous experimental design that would be costly and cannot be supported 

with Education’s data systems. However, Education has not explored the 

possibility of leveraging outside data sources to fulfill the requirement. 

Federal student loan lenders have implemented policies and practices, many 

of which are required under Education’s waivers and modifications, to 

provide relief for borrowers serving on active duty. For example, lenders 

reported that they provide options that allow borrowers to suspend or 

postpone repayment of their student loans, often with one telephone call. 

Some lenders are providing additional benefits beyond those covered by

HEROES. For example, one lender offered to forgive $2,500 in loans for 

servicemembers who have lived or attended college in Pennsylvania. 

Most colleges and universities have had students leave for active duty 

service prior to the end of an academic term, and have policies or practices

to assist them both when they depart and when they return, such as

providing tuition refunds and allowing them to withdraw from their classes. 

When students return, schools often guarantee their readmission and 

exempt them from changes to degree requirements.

Selected Options Available to Ease Departure and Return for Students on Active Duty 

UNIVERSITY

Refund tuition 

Refund room and board 

Withdraw, receive no grade

Complete course later

Receive grade

based on partial work

Serves on 

active duty

Guarantee readmission

Waive application fees

Exempt from degree 

requirement changes

Assistance for departing

students

Assistance for returning

students

Source: GAO analysis.

www.gao.gov/cgi-bin/getrpt?GAO-07-11.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cornelia Ashby 

at (202) 512-7215 or ashbyc@gao.gov. 
Contents 

Letter 1

Results in Brief 3

Background 6

Education Has Issued Waivers and Modifications to Provide Relief 

for Aid Recipients Serving on Active Duty, but the Impact of 

These Changes Is Not Known 9 

Lenders Are Assisting Borrowers as Required by Education and 

Some Are Providing Additional Benefits 16 

Most Schools Have Had Students Leave for Active Duty and Have 

Policies in Place to Aid Their Departure and Return 19 

Conclusions 28

Recommendation for Executive Action 29 

Agency Comments 29 

Appendix I Methodology for Survey of Colleges and Universities 31 

Appendix II Waivers and Modifications 34 

Appendix III Comments from the Department of Education 41 

Appendix IV GAO Contact and Staff Acknowledgments 43 

Tables 

Table 1: Responsibility for Interest Payments by Postponement and 

Loan Type 8 

Table 2: Survey of Postsecondary Schools: Population, Sample, and 

Survey Respondents by Strata 32 

Figures 

Figure 1: Options Available to Suspend or Postpone Loan 

Repayment for Borrowers Serving on Active duty 11 

Figure 2: Timeline for HEROES-Related Activities 14 

Page i GAO-07-11 Higher Education 
Figure 3: Estimated Percentage of Schools with Students Who 

Have Left for Active Duty 20 

Figure 4: States with Laws to Assist Students Who Leave School for 

Active Duty 22 

Figure 5: Selected Options Available to Ease Departure and Return 

for Students Serving on Active Duty 23 

Figure 6: Estimated Percentage of Schools with Policies on Tuition 

Refunds for Students Leaving for Active Duty 24 

Figure 7: Estimated Percentage of Schools That Offer Campus 

Housing with Room and Board Refund Policies for 

Students Leaving for Active Duty 25 

Figure 8: Estimated Percentage of Schools with Policies to 

Minimize the Academic Impact for Students Leaving for 

Active Duty 26 

Figure 9: Estimated Percentage of Schools with Policies to 

Minimize the Academic Impact When Students Return 

from Active Duty 28 

Abbreviations 

DOD Department of Defense 

FFEL Federal Family Education Loan 

HEROES Higher Education Relief Opportunities for Students 

IPEDS Integrated Postsecondary Education Data System 

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Page ii GAO-07-11 Higher Education 
United States Government Accountability Office

Washington, DC 20548 

November 1, 2006 

The Honorable Howard P. McKeon 

Chairman 

Committee on Education and the Workforce 

House of Representatives 

The Honorable Robert E. Andrews 

House of Representatives 

The Honorable John A. Boehner 

House of Representatives 

The Honorable John Kline 

House of Representatives 

The Higher Education Relief Opportunities for Students (HEROES) Act 

was first enacted in January 2002, against the backdrop of one of the most 

tragic events in U.S. history. Since September 11, 2001, more than 1.3

million members of the armed forces have been deployed—leaving 

families, jobs, and educational pursuits—to serve their country.1

 HEROES 

specifically recognizes the needs of active duty servicemembers and 

members of the National Guard and Reserves who are deployed in the 

midst of pursuing their postsecondary education or repaying student 

loans. In some instances, servicemembers may only have a few days to 

prepare for departure and ensure that their affairs are in order. They may 

need to put classes and coursework on hold, notify school officials and 

lenders, and some may not be able to make regular payments on their 

federal student loans while they are gone. The law authorizes the 

Secretary of Education to waive or modify any statutory or regulatory 

provisions relating to federal student financial aid to ensure that 

individuals who are serving on active duty in connection with a war, other 

military operation, or national emergency are not placed in a worse 

position financially because of their military service. The law requires the 

Department of Education (Education) to report on the impact of these 

waivers and modifications on affected students and student loan 

 1

Data include active duty, Reserve, and National Guard servicemembers deployed through 

May 2006. 

Page 1 GAO-07-11 Higher Education 
borrowers within 15 months of exercising its authority. HEROES also 

addresses the needs of servicemembers who must leave school for active 

duty service. While the law does not require postsecondary schools to 

assist these students, it encourages schools to provide tuition refunds for 

courses they were unable to complete and to minimize reapplication 

requirements when they return to school. 

To better understand the types of relief students and federal student loan 

borrowers serving on active duty receive, you asked us to determine (1) 

how the Department of Education has implemented HEROES, (2) the 

policies and practices federal student loan lenders have in place to assist 

borrowers serving on active duty, and (3) the policies and practices 

postsecondary schools have to assist students who are serving on active 

duty. 

To learn how Education has implemented HEROES, we reviewed the 

waivers and modifications along with guidance Education communicated 

through Dear Colleague Letters to the higher education community, and 

interviewed agency officials at Education and the Department of Defense. 

We also reviewed summary information about contacts made to the 

Ombudsman at Education’s Office of Federal Student Aid to determine the 

extent to which federal student aid recipients experienced difficulties with 

their schools or lenders as a result of active duty service.2

 To determine 

what policies and practices lenders have in place to assist student loan 

borrowers serving on active duty, we conducted semistructured interviews 

with representatives of the nine largest lenders in the Federal Family 

Education Loan (FFEL) program that hold about two-thirds of the 

program’s $289 billion in outstanding federal student loan volume.3

 To 

determine what policies or practices colleges and universities have in

place to assist students serving on active duty, between January and 

 2

Education identified 167 cases potentially relating to the provisions under HEROES. In

most cases the Ombudsman provided general assistance to borrowers, such as explaining 

the types of relief available. However, the Ombudsman intervened on the borrower’s behalf

in about 17 percent of these cases, working with lenders, schools, and guaranty agencies to 

resolve problems borrowers had with their federal student loans.

3

While Education’s waivers and modifications also apply to the Direct Loan program, we 

did not review it because it is operated directly by Education. Under this loan program,

money is borrowed directly from the federal government and the Department of Education

acts as the lender. At the end of fiscal year 2005, the Direct Loan portfolio was valued at

about $96 billion. Instead, we focused our review on the larger FFEL program, also known 

as the guaranteed student loan program. Under this program, money is borrowed from

private lenders, and the federal government guarantees repayment if the borrowers default. 

Page 2 GAO-07-11 Higher Education 
March 2006, we surveyed a random sample of 2-year and 4-year public 

postsecondary schools and 4-year private, nonprofit postsecondary 

schools with enrollments of at least 100.4

 We excluded other types of 

schools, such as private, for-profit schools, from our sample, as they 

represent a relatively small percentage of postsecondary schools. We 

received a response rate of 77 percent. The survey collected information 

about the types of policies or practices that schools have in place to assist 

students leaving for active duty service, but we did not evaluate their 

effectiveness. To better understand the range of assistance provided to 

students who must leave school for active duty service, we selected four 

postsecondary schools to visit based on their extensive experience with 

military departures. Specifically, we visited two public universities from

our survey sample that have had more than 100 students leave for active

duty service since the passage of HEROES, along with a community 

college and public university that serve a large number of students in the 

U.S. military at installations throughout the world. To gain students’ 

perspectives as they transitioned out of and back into academic life and 

dealt with their student loans, we interviewed seven students who 

experienced an interruption in their studies as a result of active duty 

service. The students represented a range of individuals serving in the 

National Guard and Reserves at different stages in their academic careers

and personal lives, including undergraduate and graduate students, both 

single and married with dependents. The results from these interviews are 

not generalizable to or representative of all students in this affected 

population. Instead, the interviews provide a glimpse into the issues this 

particular student population faces. We conducted our work between June 

2005 and September 2006 in accordance with generally accepted 

government auditing standards. See appendix I for a detailed description 

of our survey methodology. 

Education has waived and modified certain federal student financial aid 

provisions and issued guidance to the higher education community to 

provide relief for active duty servicemembers, but it has not assessed the 

extent to which servicemembers are taking advantage of the relief. These

waivers and modifications are designed to help federal student financial

Results in Brief 

 4

Percentage estimates are based on the sample and are subject to sampling error. Unless 

otherwise noted, we are 95 percent confident that the results we obtained are within +/- 10 

percentage points of what we would have obtained if we had received responses from the 

entire population. Each sample element was subsequently weighted in the analysis to 

account for all members of the population, including those that were not selected. 

Page 3 GAO-07-11 Higher Education 
aid recipients avoid negative financial consequences, such as defaulting on

their student loans, and ease administrative requirements that might delay 

the provision of assistance. For example, Education has expanded 

opportunities for servicemembers to avoid or postpone repayment. 

Students who leave for active duty service no longer have to return or 

repay federal grant funds for academic terms they were unable to 

complete, and they are treated as still enrolled in school, which means that 

they do not yet have to begin repaying any student loan disbursements 

they have received. Education also waived the requirement that borrowers 

provide written documentation of active duty service in order to qualify 

for certain benefits, allowing lenders to provide immediate assistance to 

borrowers, such as suspending their loan payments for up to 1 year, based 

on verbal notification. Education has also issued guidance regarding these 

changes to the higher education community, including postsecondary 

schools and lenders. However, Education has not collected key 

information that would allow it to assess the extent to which eligible 

servicemembers have received assistance from the flexibilities allowed by 

the waivers and modifications, as required by HEROES. Based on the Act’s 

requirements, Education should have reported to Congress on the impact 

of its waivers and modifications by March 2005. Education has no plans to 

complete the study because it interpreted the Act as requiring a rigorous 

experimental design that officials say would be costly and cannot 

currently be supported with Education’s data systems. However, it has not

explored the possibility of leveraging outside data sources to fulfill the 

mandate. 

Federal student loan lenders have implemented policies and practices that

are designed to minimize the financial impact and administrative burden 

for borrowers serving on active duty. Many of these are required by 

Education’s waivers and modifications, such as providing options that 

allow borrowers to suspend or postpone repayment of their student loans.

For borrowers who were making payments on their loans at the time they 

left for active duty service, lenders said they will suspend the payments. 

However, depending on the type of loan they have and the type of 

assistance they are eligible for, borrowers may be responsible for paying

the interest that continues to accrue on the loans. Some of the lenders we

interviewed, however, reported practices to minimize the financial impact

on these borrowers that go beyond the requirements of the HEROES 

waivers and modifications. Specifically, lenders can periodically capitalize 

the interest that continues to accrue during periods when a borrower’s 

loan repayment is suspended, but three lenders have chosen not to 

capitalize the interest, which reduces the amount of interest that 

borrowers must pay. Additionally, one lender offered to forgive $2,500 in

Page 4 GAO-07-11 Higher Education 
loans for servicemembers who have lived in Pennsylvania or attended 

college there. To minimize the administrative burden, lenders have 

simplified procedures for receiving notification about a borrower’s active 

duty service. Specifically, borrowers only need to contact the lender once 

to receive assistance, and lenders will also accept notification from 

someone acting on the borrower’s behalf, such as a family member or 

commanding officer. 

We found that most colleges and universities have had students leave for 

active duty service and have policies or practices in place to help them 

when they leave and when they return to school. Specifically, we estimate 

that about 80 percent of colleges and universities have had students who 

departed for active duty service, and nearly three-quarters have policies or

practices to help them. About two-thirds of colleges reported that their 

policies were in place prior to the passage of the HEROES Act of 2001; 

some schools’ policies may have been influenced by laws in 26 states that 

are designed to assist students when they leave school for active duty 

service. Schools reported a number of policies or practices to minimize 

the financial and academic impact of active duty service, such as providing

tuition refunds and options to withdraw from classes or complete 

coursework later. Five of the seven students we interviewed chose to 

withdraw from their courses, often to give them time to put their personal 

affairs in order. We found that a majority of the colleges and universities 

with policies to minimize the academic impact of leaving for active duty

service also have policies to help students reenroll, including suspending 

the requirement that they reapply for admission and waiving changes to

degree requirements. 

In this report, we recommend that the Secretary of Education undertake 

the congressionally mandated study to determine the extent to which 

eligible servicemembers are receiving assistance under HEROES. 

We provided copies of a draft of this report to the Department of 

Education and the Department of Defense for review and comment. 

Education agreed with the report’s findings and said the recommendation 

has merit. Education has agreed to explore options for conducting the 

congressionally mandated study. Education’s written comments are in 

appendix III. The Department of Defense had no comments. 

Page 5 GAO-07-11 Higher Education 
Congress has demonstrated its commitment to providing education 

benefits to members of the armed forces who are interested in pursuing 

postsecondary education since the enactment of the Servicemen’s 

Readjustment Act of 1944, also known as the GI Bill of Rights. Since that 

time other programs have been implemented to meet the educational 

needs of servicemembers, including the current Montgomery GI Bill, 

which provides education assistance to veterans and active duty, Reserve,

and National Guard servicemembers. As of fiscal year 2007, active duty 

servicemembers can receive up to $1,075 monthly for a maximum of 36 

months, while Reservists can receive up to $309 monthly for a maximum 

of 36 months. In fiscal year 2005, another program, the Reserve 

Educational Assistance Program, was implemented to provide benefits for 

Reservists who are called or ordered to active duty in response to a war or 

national emergency. Those who meet the length of service requirement 

can receive up to $827 toward their education, per month for 36 months. 

Congress has also given the Army, Navy, Marines, Air Force, and Coast 

Guard the ability to provide tuition assistance to active duty 

servicemembers and members of the Reserves and National Guard. These 

servicemembers can currently receive up to $4,500 in tuition assistance 

benefits annually. 

Background 

In addition to these targeted programs, servicemembers may be eligible to 

participate in the federal student financial aid programs authorized by 

Title IV of the Higher Education Act, which authorizes federal grant and 

loan programs for all eligible students. Specifically, if their military 

education benefits, income, and assets do not fully cover the estimated 

cost of attendance, servicemembers may be eligible for federal Pell grants, 

which do not have to be repaid, as well as federally subsidized Stafford 

and Perkins student loans, on which the federal government pays the 

interest while the borrower is in school. Servicemembers, like other 

borrowers, may also qualify for unsubsidized federal Stafford and PLUS 

loans if they do not demonstrate financial need.5

 Because these loans are 

not subsidized by the federal government, borrowers are responsible for 

 5

Stafford loans for students and PLUS loans for parents and graduate students are made

through two federal student loan programs. Loans in the Federal Family Education Loan 

program are made by private lenders and guaranteed by the federal government, while 

loans in the Direct Loan program are made directly by the federal government through a

student’s school. Perkins loans are low-interest loans (5 percent) for undergraduate and

graduate students with exceptional financial need and are made by postsecondary schools

that participate in Title IV Campus-Based Aid programs. 

Page 6 GAO-07-11 Higher Education 
paying all of the interest that accrues on the loan from the time the loan is 

disbursed until it is paid in full. 

The Higher Education Relief Opportunities for Students (HEROES) Act of

2003 was enacted to recognize the difficulties that postsecondary students 

and federal student financial aid recipients serving on active duty may 

experience in transitioning in and out of college and repaying their student 

loans.6

 The law covers individuals who are serving on active duty, during a

war, other military operation or national emergency, including members of 

the National Guard serving on full-time active duty and Reserves who are 

called to active duty.7

 The law extends much of the relief that Congress 

initially provided in the HEROES Act of 2001, following the tragic events 

of September 11, 2001.8

 Specifically, the HEROES Act of 2003 authorizes 

the Secretary of Education to waive or modify any statutory or regulatory 

provisions relating to federal student financial aid to minimize the 

financial impact and administrative requirements for individuals who are 

serving on active duty. The law requires Education to report to Congress 

on the impact of its efforts within 15 months of exercising its authority. 

While the law does not require postsecondary schools to assist students 

who leave for active duty service, it encourages them to provide tuition 

refunds for incomplete coursework and to minimize reapplication 

requirements. 

Federal student financial aid provisions include a number of options 

designed to allow any federal student loan borrowers—whether serving on 

active duty in the military or not—to postpone repayment. For example, 

borrowers are not expected to make payments on their loans while 

enrolled in school on at least a half-time basis, while completing a 

graduate fellowship, or for the first 6 or 9 months after they have left 

school, known as the grace period.9

 There are also options that allow 

borrowers to postpone repayment if they are having difficulty meeting 

their repayment schedule. Borrowers may qualify for a deferment if they 

 6

Pub L. No. 108-76 (2003). 

7

In addition to members of the armed forces, individuals who live or work in an area that is

declared a disaster area in connection with a national emergency, as well as those who 

suffer direct economic hardship as a result of a war, other military operation, or national 

emergency are covered by the Act. 

8

Pub. L. No. 107-122 (2002). The provisions of this Act expired on September 30, 2003. 

9

Federal Stafford loan borrowers are provided a 6-month grace period, while those in the 

Perkins Loan program are provided a 9-month grace period.

Page 7 GAO-07-11 Higher Education 
have been unable to find full-time employment or can demonstrate 

economic hardship.10 Additionally, members of the armed forces may 

qualify for a military deferment while they are serving on active duty 

during a war, other military operation, or national emergency.11 Borrowers

who are not eligible for any of the deferment options can request 

forbearance, a temporary period during which loan payments are either 

reduced or postponed. While borrowers do not have to make loan 

payments during in-school, grace, deferment, or forbearance periods, 

whether or not they are responsible for paying the interest that continues

to accrue depends on the type of loan and postponement, as shown in 

table 1. 

Table 1: Responsibility for Interest Payments by Postponement and Loan Type 

Loan type

Type of postponement Subsidized Unsubsidized

In-school Federal government Student

Grace Federal government Student 

Deferment Federal government Student

Forbearance Student Student

Source: GAO analysis.

 10Borrowers may be eligible for an economic hardship deferment if they are receiving 

payments under a federal or state public assistance program, such as Food Stamps or 

Supplemental Security Income, or serving as a Peace Corps volunteer, among other things. 

11Until recently, military deferments were only available for borrowers repaying loans that 

were disbursed prior to July 1, 1993. However, enactment of the Higher Education 

Reconciliation Act of 2005 created a new military deferment. Pub. L. No. 109-171, Title VIII, 

Subtitle A (2006). Beginning July 1, 2006, borrowers performing qualifying active duty

service can request a military deferment for loans that were first disbursed on or after July

1, 2001. 

Page 8 GAO-07-11 Higher Education 
Education has implemented HEROES by waiving and modifying certain

federal student financial aid provisions to ease the financial impact and 

administrative burden of meeting aid obligations for recipients serving on 

active duty. The extent to which servicemembers are benefiting from these 

waivers and modifications is not known, however, because Education has 

not collected key information that would allow it to assess the impact of 

these changes as required by HEROES. 

Education Has Issued 

Waivers and 

Modifications to 

Provide Relief for Aid 

Recipients Serving on 

Active Duty, but the 

Impact of These 

Changes Is Not 

Known 

Page 9 GAO-07-11 Higher Education 
To help federal student financial aid recipients who are serving on active 

duty avoid negative financial consequences, such as loan default, 

Education has expanded opportunities to avoid or postpone repayment of

federal student grants and loans. Students who leave school for active 

duty service no longer have to return or repay federal grant funds for 

academic terms they were unable to complete. Moreover, students who 

leave school for active duty service are considered to be still enrolled in 

school, which means that they do not yet have to begin repaying their 

student loans. Similarly, Education has expanded opportunities to 

postpone repayment for borrowers serving on active duty who are out of 

school or enrolled less than half-time. Specifically, under the HEROES 

waivers, if borrowers were in a grace period at the time of departure, 

lenders are required to maintain loans in a grace period for up to 3 years 

while the borrower is performing active duty service and provide 

borrowers with a full 6-month or 9-month grace period once they return,

depending on the type of loan.12 Borrowers in repayment no longer have to

provide their lender written documentation of active duty service to have 

loan repayment suspended for up to 1 year. Instead, under the HEROES 

waivers, lenders must suspend loan payments based on verbal notification 

from borrowers or another reliable source. Figure 1 illustrates the options 

available to suspend or postpone loan repayment for federal student loan 

borrowers serving on active duty. 

Education’s Waivers and 

Modifications under 

HEROES Aimed at 

Relieving Financial and 

Administrative Burden for 

Student Financial Aid 

Recipients Serving on 

Active Duty 

 12Members of the Reserves were already eligible for this benefit based on federal student

financial aid provisions, but Education has modified the provision to ensure coverage for 

all servicemembers eligible for relief under HEROES. Borrowers with federal Stafford 

loans are eligible for a 6-month grace period, while borrowers with federal Perkins loans

are eligible for a 9-month grace period. 

Page 10 GAO-07-11 Higher Education
Figure 1: Options Available to Suspend or Postpone Loan Repayment for Borrowers Serving on Active duty 

Was the borrower enrolled 

in school at least half-time 

or completing a graduate 

fellowship? 

Was the borrower in a grace 

period? 

Does the borrower have 

loans that were disbursed 

prior to July 1993 or since 

July 1, 2001? 

Loans will be maintained in an 

in-school status, in-school 

deferment, or graduate 

fellowship deferment for up to 

3 years.

Loans will be maintained in 

grace period for up to

3 years.

Borrower can receive a

military deferment for up to

3 years during active duty 

service. No documentation 

required in first year.

Yes

No 

No 

No 

Yes

Yes

Source: GAO analysis.

No payments

required. Borrower 

pays the interest that 

accrues on loans, 

whether subsidized or 

unsubsidized.

Borrower is eligible for 

forbearance, awarded in 

1-year increments for up to

3 years. No documentation 

required in the first year.

No payments required. 

Federal government 

pays the interest on 

subsidized loans.

Page 11 GAO-07-11 Higher Education
Education’s waivers and modifications also cover borrowers who had 

already defaulted on their student loans at the time of departure.13

Specifically, Education has waived the provisions that require schools and 

guaranty agencies to attempt to collect on defaulted loans while the 

borrower is performing active duty service.14 Education has also waived 

requirements related to getting loans out of default. Specifically, once a 

borrower has defaulted on a loan, he or she can usually “rehabilitate” it by 

making 12 consecutive on-time payments. To ensure that borrowers on 

active duty service are not penalized, Education has waived the 

requirement so that any payments that are missed during active duty 

service or during a 3-month transition period upon return will not be 

treated as an interruption. 

The waivers and modifications also encourage schools to use their 

professional judgment in determining financial need for students whose 

family income has been affected by active duty service, regardless of 

whether the student or the student’s parent or spouse is serving on active 

duty. Education’s waivers and modifications allow financial aid 

administrators to consider more current financial information than what 

students typically submit when applying for federal student financial aid if

it reduces the amount the student and his or her family would be expected

to pay toward the cost of attendance. For example, the expected family 

contribution for the 2006-2007 academic year would typically be calculated 

using financial information from the 2005 calendar year, but the waivers 

and modifications allow financial aid administrators to use financial 

information from the 2006 calendar year for those serving on active duty 

and their spouses and dependents. Financial aid administrators need not 

make this adjustment if doing so will provide no financial benefit to the 

student, such as in cases in which active duty service leads to an increase 

in income. 

Education’s waivers and modifications also ease the administrative, or 

“paperwork,” burden federal student financial aid recipients may 

experience when they are serving on active duty. For example, Education 

 13In the Direct and FFEL loan programs, default occurs when borrowers on a monthly 

payment schedule become 270 days delinquent. In the Perkins Loan program default occurs

when borrowers miss one installment payment. 

14Guaranty agencies are state or private not-for-profit agencies that guarantee payments to

FFEL lenders if students fail to repay their loans. Schools are responsible for attempting to 

collect on defaulted Perkins Loans, and guaranty agencies are responsible for collecting on 

defaulted loans in the FFEL loan program. 

Page 12 GAO-07-11 Higher Education
has made allowances for borrowers who have to depart quickly by 

requiring lenders to accept notification from someone acting on the 

borrower’s behalf, such as a spouse or parent. Education has also relaxed 

the requirement that postsecondary schools obtain written authorization 

from a borrower regarding the disbursement of financial aid when military 

service would make complying with this requirement difficult. Under the 

waivers and modifications, borrowers serving on active duty also have 

more time to cancel a student loan. While borrowers normally have 14 

days from receiving notification from their school that their loan has been 

credited to their account to cancel all or a portion of their student loan, 

borrowers serving on active duty have 60 days. 

Education officials told us that when they developed the waivers and 

modifications, they began by considering which federal student financial

aid provisions could have negative financial consequences for individuals

eligible for relief under HEROES and then conducted internal 

brainstorming sessions to identify options for relief. The officials said the 

process was guided by the understanding that Education was charged with 

waiving and modifying existing statutory and regulatory provisions, not 

creating new regulations or spending additional funds. Prior to issuing the 

waivers and modifications, Education officials reached out to industry 

groups, such as the National Association of Student Financial Aid 

Administrators and the National Council of Higher Education Loan 

Programs, to discuss the changes being considered and elicit additional 

ideas on how to best assist students and federal student financial aid

recipients serving on active duty. Additionally, Education officials said the 

Department of Defense was instrumental in helping Education understand 

the deployment process, in particular how quickly deployment can occur 

and how little time servicemembers may have to attend to personal 

matters. One Education official said that understanding the nature of 

deployment was important in helping Education work through concerns 

about program integrity. Specifically, there were concerns that if 

administrative requirements were reduced by waiving written 

documentation requirements and allowing someone else to act on the 

borrower’s behalf, program integrity might be adversely affected. 

Education decided that minimizing the obstacles to obtaining relief to 

ensure that borrowers did not inadvertently default on their student loans

outweighed these concerns. Additionally, the official noted that the risks 

to the federal government are minimal since borrowers can only obtain 1 

year of assistance without additional documentation, and they will 

eventually have to repay the remaining balance of their loans.

Page 13 GAO-07-11 Higher Education
After the passage of HEROES, Education announced limited waivers to 

statutory and regulatory provisions in May 2003 and announced more 

comprehensive waivers and modifications in December 2003. As required 

by HEROES, Education published the waivers and modifications in the 

Federal Register, which also provided guidance to help postsecondary 

schools, lenders, and guaranty agencies understand the changes. The 

waivers and modifications announced as a result of HEROES update and

expand much of the guidance Education issued to the higher education 

community through Dear Colleague Letters immediately following the 

terrorist attacks of September 11, 2001, and again in March 2003. The

initial Dear Colleague Letters focused on providing relief for students and 

federal student loan borrowers affected by the terrorist attacks, including

military personnel. In October 2005, Education extended these waivers 

and modifications through September 2007. (See fig. 2.) 

Figure 2: Timeline for HEROES-Related Activities 

2001 2002 2003 2004 2005 

Sept. 2001 

Education issues Dear 

Colleague letters

providing guidance on 

how to assist persons

affected by events of 

Sept. 11, 2001, 

including military 

personnel 

Jan. 2002 

Congress

enacts

HEROES

Act of 2001 

Mar. 2003 

Education issues

Dear Colleague 

letters updating 

guidance on how to 

help military 

personnel 

Aug. 2003 

Congress

enacts the 

HEROES

Act of 2003 

Aug. 2004

First report on 

impact of 

waivers and 

modifications

due to 

Congress

(not completed)

Mar. 2005

Second report 

on impact of 

waivers and 

modifications

due to 

Congress

(not completed)

Oct. 2005 

Education 

extends

waivers and 

modifications

through 

Sept. 30, 2007 

May 2003

Education issues

first set of 

waivers and 

modifications

Dec. 2003

Education 

issues

comprehensive 

waivers and 

modifications

Source: GAO analysis.

See appendix II for a full list of the waivers and modifications.

Page 14 GAO-07-11 Higher Education
Education has not assessed the impact of waivers and modifications on 

federal student financial aid recipients and Title IV federal student 

financial aid programs as mandated by Congress. Specifically, both the 

2001 and 2003 HEROES Acts required Education to report to Congress on 

the impact of its waivers and modifications within 15 months of first 

exercising its authority to waive or modify federal student financial aid 

provisions. Based on Education’s issuance of comprehensive waivers and 

modifications in December 2003, a study should have been completed no 

later than March 2005. While HEROES does not specify how Education 

should go about assessing the impact of its waivers and modifications, 

Education officials interpreted the Act as requiring a rigorous

experimental design that they say would be costly and cannot currently be 

supported with Education’s data systems. Therefore, Education currently 

has no plans to complete the required study. 

Education Has Not 

Assessed the Impact of 

Waivers and Modifications 

on Students and Federal 

Student Financial Aid 

Recipients, as Required 

Currently, Education does not have a mechanism for identifying the total 

number of federal student financial aid recipients who have been provided 

assistance under HEROES within its data systems. Education maintains a 

central database of all federal student loans and Pell grants through its 

National Student Loan Data System, which tracks the status of loans and

grants through their life cycle. The database collects required information 

on federal student aid recipients’ enrollment status from schools and the 

status of their loans from lenders and guaranty agencies. Based on current 

reporting requirements, the system can only be used to identify two types 

of assistance provided to borrowers based on their military service, 

military deferment and military grace periods, which are coded uniquely in

the system and existed prior to HEROES. Education officials told us that 

the system would have to be reengineered to identify other types of 

borrowers who received assistance under HEROES, such as those with 

loans in forbearance, because there are no additional codes in the system 

to explain what made the loan eligible for assistance, such as military 

service or financial difficulty. 

When Education announced waivers and modifications, it included a 

provision requiring postsecondary schools and lenders to document their 

use of the waivers and modifications in such a way that they could report 

on their effect to Education upon request. However, the announcement 

did not include any specific guidance on what types of data Education 

wanted and how schools and lenders should collect it to ensure Education 

could use the data. Education officials told us that they thought the 

requirement went largely unnoticed and that lenders generally do not 

collect information on this population in such a way that would be 

reportable. For example, the officials said that while lenders maintain 

Page 15 GAO-07-11 Higher Education
information on the reasons for forbearance in a borrower’s individual loan 

record, they would not have a mechanism for running a query to identify 

every borrower granted forbearance based on active duty service. In our 

discussions with lenders we found that three of the nine could provide us

some data on the number of borrowers whose loan payments had been

suspended through forbearance as a result of military service. Moreover, 

these lenders could provide some data on borrowers whose loans had 

been maintained in an in-school period while serving on active duty. 

Education has not explored other data sources that might be used in 

combination with its data systems to complete the congressionally 

required study. For example, the Department of Defense (DOD) has data 

that may be used in conjunction with Education’s data to assess the 

number of federal student financial aid recipients who have been assisted 

by HEROES. DOD told us that it has extensive information on 

servicemembers, including mobilizations and deployments, through its 

Defense Manpower Data Center. DOD officials said it would be possible to 

conduct a match using common data points, such as Social Security 

numbers and dates of birth, with Education’s National Student Loan Data

System, to identify servicemembers who were participating in federal 

student financial aid programs at the time they were deployed. Once the 

target population has been identified, additional analysis to determine the 

extent to which these servicemembers received some relief might be 

possible. Education officials agreed that such a match would be possible, 

but said they would have concerns about being responsible for sensitive 

national security data of this nature. Additionally, they thought resources 

could be another limitation to such a match, since Education would likely 

have to provide funds to cover the work if it entered into a memorandum 

of understanding with DOD. 

Lenders have a variety of policies and practices in place designed to 

provide relief for federal student loan borrowers serving on active duty,

many of which are required under Education’s waivers and modifications.

To minimize the financial impact on borrowers, lenders provide them with 

options to suspend or postpone repayment on their student loans. For 

example, borrowers who were enrolled in school on at least a half-time 

basis before leaving for active duty service are eligible to have their loans 

maintained in an in-school status period, which means that they do not 

enter repayment while they are serving on active duty and are provided 

additional time to reenroll after completing their service. For borrowers 

who are repaying their loans, lenders said they will suspend repayment 

through a military deferment or forbearance during active duty service. 

Lenders Are Assisting 

Borrowers as 

Required by 

Education and Some 

Are Providing 

Additional Benefits 

Page 16 GAO-07-11 Higher Education
Because borrowers are responsible for paying the interest that accrues on 

loans in forbearance, lenders consider forbearance as the last option for 

suspending repayment on a loan when borrowers are not eligible for any 

other type of assistance.

Lenders also told us about policies or practices they have to minimize the 

financial impact on borrowers that go beyond the requirements of 

HEROES. Some lenders we interviewed reported practices to minimize the 

amount of interest that accrues while a loan is in forbearance during 

active duty service. While borrowers are not required to make any 

payments during a forbearance period, the interest on these loans 

continues to accrue, and ultimately the borrower is responsible for paying

it. If the borrower elects not to pay any of the interest that has accrued 

during the forbearance period, the interest will eventually be capitalized

by adding the accrued interest to the remaining principal balance. From 

that point on, interest will be assessed on the new, higher principal 

balance. Federal student financial aid provisions allow lenders to 

capitalize the interest that accrues on loans in forbearance either quarterly 

or at the end of the forbearance period, depending on when the loan was 

originally disbursed.15 However, three lenders told us that they do not 

capitalize the interest on loans in forbearance as a result of active duty 

service, which reduces the total amount of interest that borrowers serving 

on active duty must pay. Additionally, one Pennsylvania-based lender has 

extended benefits beyond the requirements of HEROES by offering loan 

forgiveness for servicemembers who have lived in Pennsylvania or 

attended college there. The program provides a one-time loan-forgiveness 

benefit of $2,500 for members of the armed forces who have been in an 

active duty status between September 11, 2001, and December 31, 2006. 

Lenders also follow Education’s waivers and modifications designed to 

reduce the administrative burden for borrowers serving on active duty, for 

example, by providing immediate assistance to borrowers based on verbal

notification of their active duty service. A representative from one of the 

lenders we interviewed told us that the simplified documentation 

requirements allowed under the HEROES waivers and modifications have 

made it easier for lenders to quickly respond to borrower needs. She said 

that without this assistance, borrowers might have become delinquent on

 15For loans disbursed prior to July 1, 2000, lenders can capitalize the interest on loans in 

forbearance as often as quarterly. However, loans issued on or after July 1, 2000, can only 

be capitalized at the end of the forbearance period. 

Page 17 GAO-07-11 Higher Education
their loans—which could adversely affect their credit rating—while 

waiting to be approved for forbearance because of the documentation 

requirements. 

Lenders told us that with these simplified procedures, they could help 

servicemembers with just one short telephone call. For example, all the 

lenders we interviewed have toll-free numbers that borrowers can call to

obtain information about or request assistance with their loans, and 

borrowers only need to contact the lender once to receive assistance, such

as military deferment or forbearance. Lenders said the borrower is 

typically the one who contacts the lender about his or her active duty 

service, but they will also accept notification from someone acting on the 

borrower’s behalf, such as a spouse, parent, or other reliable source. Three 

lenders explained that individuals who notify the lender must have 

sufficient information about the borrower’s account to be considered a 

reliable source. During the initial contact, a customer service 

representative will determine what benefits the borrower is eligible for 

based on his or her individual circumstances. According to several 

lenders, this stage of the process can usually be completed in 5 to 10

minutes, and any changes that are made to the loan status will be 

processed within 3 to 5 days, at which time a notice is mailed to the 

borrower confirming the changes that were made and the time periods 

these changes will remain in effect. 

The process is similar when borrowers return. However, since borrowers 

may not contact the lender when they return from active duty service,

lenders said that they rely on information documented in the borrower’s 

account to determine the length of the benefit period. Lenders send 

borrowers a notice by mail before the benefits lapse to inform them of 

what will happen to the loans at the end of the period, along with contact

information should the borrower need additional assistance with their 

loans. For example, a borrower with a loan in forbearance would receive a 

notice indicating when the forbearance period is scheduled to end along 

with repayment terms, such as when the borrower will have to begin 

making payments and how much he or she will have to pay each month.

The advance notice is designed to allow sufficient time for borrowers who 

are continuing to serve on active duty to submit copies of military orders 

to extend the assistance they are receiving with their loans. Borrowers 

need not take any action when they receive notification from the lender if 

they have returned from active duty service and do not require further 

assistance with their loans. 

Page 18 GAO-07-11 Higher Education
While the benefits available to borrowers under HEROES end after the 

borrower has returned from active duty service and used any available 

transition period, most of the lenders we talked to said they would 

continue to work with any borrowers having difficulty making their 

monthly payment after returning from active duty service. For example, 

officials from one lender said they would offer borrowers other repayment 

alternatives, such as income-sensitive repayment to lower their monthly 

payment amount, or additional forbearance time as allowed under federal 

student financial aid provisions. 

The majority of colleges and universities have had students who left 

school for active duty service before the end of their academic term and 

have policies to assist these students when they leave and when they 

return to school. Schools reported having policies covering refunds of 

tuition and room and board, grading, and changes to graduation and 

degree requirements that might occur while students are serving on active 

duty. 

The majority of colleges and universities—about 80 percent—have had

students leave school for active duty service prior to the end of their 

academic term, according to our survey, with a greater percentage of 

public schools having experience with such departures.16 For example, we

estimate that 66 percent of 4-year private schools had students who left for 

the military compared to 96 percent of 4-year public schools (see fig. 3). 

Although the majority of schools had students who left for active duty 

service, most of these schools could not identify the number of students 

who left since HEROES was first enacted in January 2002. Officials at two 

of the universities we visited told us that more than 100 of their students 

had left and partly attributed the large number of departures to their 

campuses’ proximity to military bases and National Guard units. 

Most Schools Have 

Had Students Leave 

for Active Duty and 

Have Policies in Place 

to Aid Their 

Departure and Return 

Most Colleges and 

Universities Have Had 

Students Leave for Active 

Duty 

 16Our survey asked schools if they had any students who left for active duty service. 

Page 19 GAO-07-11 Higher Education
Figure 3: Estimated Percentage of Schools with Students Who Have Left for Active 

Duty 

Percentage of schools

Source: GAO survey of colleges and universities. 

0 10 20 30 40 50 60 70 80 90 100 

All schools

4-year private 

4-year public 

2-year public 91 

82 

66 

96 

Note: The 95 percent confidence interval for the estimated percentage of 4-year private schools is

from 53 to 78 percent. 

Page 20 GAO-07-11 Higher Education
We estimate that nearly three-quarters of schools have policies or 

practices for students who leave for active duty service prior to the end of

the academic term.17 Schools with students who have left were more likely 

to report having policies. About two-thirds of schools reported that their 

policies were in place prior to the enactment of the first HEROES Act in 

2001. For example, officials at one university we visited said the 

institution’s policies were developed in the 1990s in response to the many 

students who had to leave school for active duty service in Kuwait. Some 

of these schools’ policies may have been influenced by state law. 

Specifically, we identified 26 states that have laws to assist students who 

leave for active duty service (see fig. 4). Most of them apply only to public 

colleges and universities, and require schools to have nonpunitive 

withdrawal policies and issue tuition refunds for students who choose to 

withdraw. Both Texas and Florida, for example, require public colleges 

and universities to provide students with the option of receiving a full 

tuition refund for any course they withdraw from or completing it at a 

later date without penalty. Additionally, Texas provides professors with 

the flexibility to assign students a grade based on the work completed at 

the time of departure. 

Most Schools Have 

Policies in Place to Aid 

Students When They Leave 

for Active Duty Service 

and Return to School 

 17Policies and practices are referred to as policies here forward in the report.

Page 21 GAO-07-11 Higher Education
Figure 4: States with Laws to Assist Students Who Leave School for Active Duty 

Alaska

H aw aii 

P a. 

Or e . 

N e v . 

Idaho 

Mont . 

Wy o . 

Utah 

A r iz . N.M e x . 

Col o . 

N.Dak . 

S.Dak . 

Nebr . 

T e x . 

Kan s. 

Okla. 

Minn . 

I ow a

M o . 

A r k . 

La. 

Ill . 

Miss. 

Ind . 

K y . 

T enn . 

Ala. 

Fla. 

Ga. 

S. C . 

N. C . 

V a. 

Ohio 

N.H . 

Mass. 

Mich R.I . . 

Cali f . 

W ash . 

Wi s. N. Y . 

Maine 

Vt . 

W . V a. 

Conn . 

N. J . 

Del . 

Md . 

D . C . 

P .R . 

Sources: GAO (data); Copyright © Corel Corp. All rights reserved (map). 

No state laws

State laws

School Policies Address 

the Broad Range of Issues 

Confronting Students Who 

Must Leave for Active Duty 

Service 

Most schools have policies in place to help students who leave for active 

duty service transition out of and back into school. Figure 5 illustrates the 

options that may be available to these students when they depart and 

return. 

Page 22 GAO-07-11 Higher Education
Figure 5: Selected Options Available to Ease Departure and Return for Students Serving on Active Duty 

UNIVERSITY

Refund tuition 

Refund room and board 

Withdraw, receive no grade

Complete course later

Receive grade

based on partial work

Serves on active duty

Guarantee readmission

Waive application fees

Exempt from degree 

requirement changes

Possible policies to

assist students returning

from active duty

Possible policies to

assist students departing

for active duty

Source: GAO analysis.

For students who leave for active duty service before completing an 

academic term, the majority of schools offer tuition refunds and various 

options for withdrawing from courses. We estimate that 70 percent of 

colleges and universities have tuition refund policies for students leaving 

for active duty service, and most of them provide a full tuition refund for 

these students (see fig. 6). The majority of schools that provide a partial

refund prorate the refund based on how much of the term the student has 

completed. 

Page 23 GAO-07-11 Higher Education
Figure 6: Estimated Percentage of Schools with Policies on Tuition Refunds for Students Leaving for Active Duty 

Source: GAO survey of colleges and universities. 

17%

82%

1% 

No refund 

Schools with tuition 

refund policy 

Full refund 

Partial refund Schools without tuition 

refund policy 

30% 70%

Note: One percent of schools that have tuition refund policies reported that their policies do not allow 

for any portion of the tuition to be refunded. 

Some schools also reported having policies that allow for the refund of 

room and board. Of the schools that offer campus housing, 52 percent 

reported having policies regarding room and board refunds. Of those, 82 

percent reported that they provide a partial refund of room and board, 

usually based on the amount of the term completed, for students leaving 

for active duty (see fig. 7). 

Page 24 GAO-07-11 Higher Education
Figure 7: Estimated Percentage of Schools That Offer Campus Housing with Room and Board Refund Policies for Students

Leaving for Active Duty 

Source: GAO survey of colleges and universities.

48% 52%

18%

82%

Full refund 

Schools with room

and board refund

policies

Partial refund 

Schools without room

and board refund

policies

Note: This analysis includes only colleges and universities that offer campus housing based on data 

in the Integrated Postsecondary Education Data System (IPEDS). The 95 percent confidence interval 

for the estimated percentage of schools that offer a full refund is from 10 to 30 percent, and the 95 

percent confidence interval for schools that provide a partial refund is from 70 to 90 percent. 

Most of the schools require documentation of active duty service, such as 

a copy of military orders, before students can receive a refund of tuition or 

room and board, although in some cases students may not have 

documentation before leaving. For example, officials at one university we 

visited said that their students who left for active duty service shortly after 

September 11, 2001, did not receive their military orders before departing,

and as a result their tuition refunds could not be processed before they 

left. 

Students may also risk failing courses or delaying graduation when they 

leave school before the term has been completed, but about two-thirds of 

schools have put in place policies to help them minimize the academic 

impact of leaving (see fig. 8). Almost all of these schools allow students 

leaving for active duty service to receive a grade of “incomplete”—giving 

them the option to finish the class later—or withdraw from a course 

without receiving a grade. Of the schools that allow a student to receive an 

incomplete in an unfinished course, 68 percent require the student to 

complete the coursework within specific time frames—anywhere from 

Page 25 GAO-07-11 Higher Education
Page 26 GAO-07-11 Higher Education 

less than a month to 36 months—to receive a letter grade in the course. In 

addition, over half of schools that have policies to minimize academic 

impact allow instructors to assign a grade based on partially completed 

coursework. 

Figure 8: Estimated Percentage of Schools with Policies to Minimize the Academic Impact for Students Leaving for Active 

Duty 

Of the seven students we interviewed, one was able to work with his 

instructors to complete remaining coursework for a grade before leaving 

for active duty service, and five opted to withdraw from their classes.18 An 

undergraduate student in the Army National Guard we interviewed said 

that he withdrew from his classes as soon as he received the alert that his 

military unit would be deployed. He said that withdrawing from school 

allowed him to focus on ensuring that health insurance and medical care 

were in place for his son, who has a serious illness. A graduate student in 

 18One student we interviewed had been accepted by the university, but had not yet enrolled 

when called to active duty. He deferred enrollment until he returned from service. 

Schools with policies to 

minimize academic 

impact 

Schools without policies 

to minimize academic 

impact 

Source: GAO survey of colleges and universities. 

33% 67% 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

Allow grade based 

on partial coursework 

Allow withdrawls

Allow incompletes

Percentage 
the Marine Reserves who received 1 week advance notice of deployment 

withdrew from classes to allow time to handle financial obligations. While 

withdrawing from classes ensures that students will not have failing 

grades to contend with, two students expressed concern about how the 

withdrawals on their transcripts would be perceived by other 

postsecondary schools when applying for a transfer or graduate study. The 

university these students attend has since begun allowing students to get 

these withdrawals deleted from their records, which means there would 

be no record of the student having attempted the course on their 

transcript. One undergraduate student we spoke to reported difficulty 

withdrawing from his classes. He told us that while he was deployed 

multiple times for durations of 1 to 3 weeks, his university approved only 

one of his requests to withdraw. Even though his deployments were 

relatively short, he said it was difficult for him to keep up with the 

coursework and his academic performance suffered as a result. 

In addition to allowing students to withdraw or receive a grade of 

incomplete, some of the colleges we visited provided other options for 

students leaving for active duty service to complete classes. Officials at 

one college we visited said that some students who have left school for 

active duty service have been able to complete a course by delivering 

remaining assignments to their professor by Email or completing a 

classroom course via the Internet when it is offered in an online version. 

One university we visited that has a large number of military students 

reported great increases in online course enrollment in 7 years, from 

20,000 to 150,000 students. Also, a college based in Texas with campuses 

on military bases worldwide offers courses using such tools as 

prerecorded and live lectures displayed over the Internet, interactive 

online discussions that can facilitate student participation, and course 

materials provided on compact disc. 

When students return to school from active duty service, most schools 

also have policies to ease their transition. Specifically, about half of 

schools with policies to minimize the academic impact of leaving for 

active duty service do not require students to reapply for admission (see 

fig. 9). Of those schools that require students to reapply, almost all 

guarantee readmission, and 84 percent waive application fees.19 Officials at 

one college we visited reported that students returning from active duty 

 19The 95 percent confidence interval for the estimated percentage of schools that waive 

application fees is from 73 to 92 percent. 

Page 27 GAO-07-11 Higher Education
service are required to reapply just to ensure that the school has updated 

contact information for the students. Moreover, a student may return from 

active duty to find that degree requirements have been changed, such as 

courses required for a major, which could delay graduation. Sixty percent 

of schools with policies designed to minimize the academic impact of 

leaving for active duty service exempt returning students from changes in

degree requirements that occurred during their absence (see fig. 9). 

Additionally, the majority of schools with polices to minimize academic 

impact reported having mechanisms that allow returning students to 

appeal failing grades and changes to degree requirements. 

Figure 9: Estimated Percentage of Schools with Policies to Minimize the Academic Impact When Students Return from Active

Duty 

School with policies to 

minimize academic 

impact 

Schools without policies

to minimize academic 

impact 

Source: GAO analysis of survey results. 

33% 

67% 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

Can appeal changes to 

 Can appeal 

Exempt from degree 

Exempt from 

degree requirements

failing grades

requirement changes

reapplying

Percentage 

Our study showed that most colleges and universities have experienced 

military departures, and schools and lenders have marshaled behind 

servicemembers by putting in place policies and practices to minimize the 

Conclusions 

Page 28 GAO-07-11 Higher Education
impact of serving their country. Education issued waivers and 

modifications to federal student financial aid provisions to protect this 

population, and states also have laws in place to support them. However, 

critical information to gauge the usefulness of these waivers and 

modifications is missing. Specifically, Education does not have very basic 

information on the extent to which servicemembers are benefiting from 

the waivers and modifications. We know that more than 1.3 million 

servicemembers have been deployed since September 11, 2001, but 

information on the extent to which these individuals are college students 

or have federal student loans and are receiving relief under HEROES is 

unknown. While an impact study of HEROES as Education has interpreted 

the congressional requirement would be difficult and costly to undertake, 

important information such as this could be obtained without using a 

rigorous experimental design. Such information would be important to 

gauge the extent to which those eligible are taking advantage of HEROES 

and may provide Education with information about issues for future study. 

To ensure that Congress knows the extent to which the waivers and 

modifications are being used, we recommend that the Secretary of 

Education undertake the congressionally mandated study to determine the 

extent to which eligible servicemembers are receiving assistance under 

HEROES. 

We provided copies of a draft of this report to the Department of 

Education and the Department of Defense for review and comment. In 

written comments, the Department of Education agreed with our findings. 

With respect to our recommendation, Education said it has merit and that

it will explore options for completing the congressionally mandated study. 

Education commented that because highly sensitive national security data

from DOD would be required, DOD should take the lead in extracting the 

data. Education said it would explore this possibility following discussions 

with Congress and DOD. As we stated and recommended in our report, the 

responsibility for conducting the study resides with Education.

Education’s written comments are in appendix III. DOD had no comments 

on the draft report. 

Copies of this report will be sent to the congressional committees and 

subcommittees responsible for the Higher Education Act, the Secretary of

Education, the Secretary of Defense, and other interested parties. Copies 

Recommendation for 

Executive Action 

Agency Comments 

Page 29 GAO-07-11 Higher Education
will also be made available to others upon request. In addition, this report 

will be available at no charge on GAO’s Web site at http://www.gao.gov. 

If you have any questions about this report, please contact me on (202) 

512-7215. Key contributors to this report are listed in appendix IV. 

Cornelia M. Ashby 

Director, Education, Workforce, 

 and Income Security Issues 

Page 30 GAO-07-11 Higher Education
Appendix I: Me

Colleges an

thodology for Survey of 

d Universities 

Page 31 GAO-07-11 Higher Education

Appendix I: Methodology for Survey of 

Colleges and Universities 

To determine what policies or practices colleges and universities have in

place to assist students serving on active duty, we designed a Web-based 

survey and distributed it to school administrators of 2-year public, 4-year 

public, and 4-year private, nonprofit postsecondary schools. The survey 

asked such questions as whether schools had students that left for active 

duty service prior to the end of an academic term and what their policies 

were for refunding tuition and room and board for this population of 

students. The survey included questions about the types of grading 

policies they had in place to accommodate students who left prior to the 

end of the academic term. The survey also asked respondents to report on 

how they assist students when they return from active duty service and

resume their studies, such as whether the student needed to reapply and 

how the school handled changes in degree requirements. The survey was 

conducted between January and March 2006. 

Sample Design and Errors Our sample was drawn using the Department of Education’s 2002-2003

Integrated Postsecondary Education Data System (IPEDS), which contains

the most comprehensive data on all postsecondary schools.1

 Our sample 

consisted of 2-year public, 4-year public and 4-year private, nonprofit 

postsecondary schools that participate in Title IV programs and have an 

undergraduate enrollment of at least 100 students. We drew a stratified 

random sample of 274 schools from the population of 2,974 that met our 

criteria. We selected our sample from four strata defined by size (student 

enrollment) and institution type (2-year public, 4-year public, and 4-year 

nonprofit private schools). Each school had a known probability of being 

selected. We received completed surveys from 75 percent of the 274 

colleges and universities in our sample. Two schools in the sample were 

considered out of scope because of changes to their institutional status. 

The response rate, adjusted for out-of-scope respondents and weighted to

reflect the population size in each stratum, was 77 percent. The 

population, sample, and survey respondents by strata are shown in table 2. 

We excluded private, for-profit schools from our sample because they 

represent a relatively small percentage of all postsecondary schools. 

 1

IPEDS is a system of surveys designed to collect data from all primary providers of 

postsecondary education. These surveys collect institution-level data in such areas as

enrollments, program completions, faculty, staff, and finances. Data are collected annually 

from approximately 9,600 postsecondary schools, including over 6,000 schools eligible for 

the federal student aid programs. 
Appendix I: Methodology for Survey of 

Colleges and Universities 

Table 2: Survey of Postsecondary Schools: Population, Sample, and Survey Respondents by Strata 

Strata Population Sample

In-Scope 

schools in sample

Survey 

respondents

4-Year Public, <10K enrollment 427 40 39 32

4-Year Nonprofit Private, <10K enrollment 1,208 71 71 56

2-Year Public, <10K enrollment 942 60 59 43

Enrollment ≥10K 397 103 103 74

Total 2,974 274 272 205

Source: GAO survey of colleges and universities. 

Note: We stratified the schools in our population into these four groups to allow us to estimate either 

school type or school size. Because the population consists mostly of schools with an enrollment of 

less than 10,000 students (small schools), we sampled schools with more than 10,000 students (large

schools) at a much higher rate. Because of the higher sampling rate of large schools and because 

almost all large schools were public, we did not need to further divide the large school stratum based 

on our desired maximum level of sampling error. 

Our probability sample of colleges and universities is only one of a large 

number of samples that we might have drawn. Because each sample could 

have provided different estimates, we express our confidence in the 

precision of the results from our sample in confidence intervals. We are 95 

percent confident that each of the confidence intervals for the items we 

examined from our survey includes the population value. Unless otherwise 

noted, all percentage estimates from our sample have margins of error of 

plus or minus 10 percentage points or less. We weighted each sampled 

school in the analysis to represent all the members of the population, 

which allows us to generalize the survey responses to the types of higher 

education schools surveyed. 

Nonsampling Errors In addition to sampling errors, the practical difficulties of conducting any 

survey may introduce nonsampling errors. Examples of nonsampling 

errors include misinterpretation of questions and errors associated with 

manual data entry processes. We took several steps to minimize 

nonsampling errors. A draft of the survey was pretested with a number of 

postsecondary institution administrators to ensure that the questions were 

relevant, clearly stated, and easy to comprehend. On the basis of pretest 

findings, some slight changes were made to the instrument. All pretests 

were conducted between October and November 2005. Also, using a Webbased survey eliminated the errors associated with a manual data entry 

process by allowing school administrators to enter their responses directly 

into an electronic instrument, automatically creating a record in a data file

for each respondent. While we did not fully verify the extent to which 

Page 32 GAO-07-11 Higher Education
Appendix I: Methodology for Survey of 

Colleges and Universities 

schools adhered to their reported policies or practices, we followed up 

with some respondents to obtain additional information about the policies 

they reported. We also contacted respondents, if necessary, to clarify 

answers. Based on these checks, we believe our survey data are 

sufficiently reliable to be used in determining the policies or practices 

schools have in place to assist students who are called to active duty. In 

addition, programs used to analyze the survey data and make estimations 

were independently verified to ensure the accuracy of this work. To 

increase the number of survey respondents, once the Web survey was 

deployed, we followed up with school administrators through e-mail and

by phone to remind them about the survey. 

To assess the completeness of the IPEDS data, we reviewed the National 

Center for Education Statistics’ documentation on how the data were 

collected and performed electronic tests to look for missing or out-ofrange values. On the basis of these reviews and tests, we found the IPEDS 

data sufficiently reliable for defining our population of schools. 

Page 33 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 34 GAO-07-11 Higher Education

Appendix II: Waivers and Modifications 
Appendix II: Waivers and Modifications 

Page 35 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 36 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 37 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 38 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 39 GAO-07-11 Higher Education
Appendix II: Waivers and Modifications 

Page 40 GAO-07-11 Higher Education
Appendix III: Comments from the Department 

of Education 

Page 41 GAO-07-11 Higher Education

Appendix III: Comments from the 

Department of Education 
Appendix III: Comments from the Department 

of Education 

Page 42 GAO-07-11 Higher Education
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 43 GAO-07-11 Higher Education

Appendix IV: GAO Contact and Staff 

Acknowledgments 

Cornelia M. Ashby, Director, (202) 512-7215, ashbyc@gao.gov

Sherri Doughty, Assistant Director 

Debra Prescott, Analyst-in-Charge 

Summer Pachman, Senior Analyst 

In addition to those named above, Avrum Ashery, Susan Bernstein, Karen 

Burke, Nancy Hess, Kevin Jackson, Jean McSween, John Mingus, Jim 

Rebbe, and Rachael Valliere made significant contributions to this report. 

GAO Contact 

Staff 

Acknowledgments 

(130488) 
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