SEC. 2. TUITION RELIEF FOR POSTSECONDARY STUDENTS 
CALLED TO MILITARY SERVICE. 
(a) IN GENERAL.—Section 484B(b)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1091b(b)(2)) is amend-
ed by adding at the end the following: 
‘‘(F) TUITION
RELIEF
FOR
STUDENTS 
CALLED TO MILITARY SERVICE.— 
‘‘(i) TUITION RELIEF.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), whenever a student’s 
withdrawal from an institution of 
higher education is necessitated by 
reason of service in the uniformed 
services, the institution shall refund to 
such student the tuition and fees paid 
by, or on behalf of, such student for 
the payment period or period of en-
rollment for which such student did 
not receive academic credit as a result 
of such withdrawal. 
‘‘(II) EXCEPTION.—Subclause (I) 
shall not apply to the tuition or fees 
paid on behalf of the student— 
‘‘(aa) 
from 
scholarships 
awarded to the student by the in-
stitution of higher education; or 
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‘‘(bb) through funds award-
ed under this title. 
‘‘(ii) WAIVER OF REPAYMENT BY STU-
DENTS CALLED TO MILITARY SERVICE.—In 
addition to the waivers authorized by sub-
paragraphs (D) and (E), the Secretary 
shall waive the amounts that students are 
required to return under this section if the 
withdrawals on which the returns are 
based are withdrawals necessitated by rea-
son of service in the uniformed services. 
‘‘(iii) LOAN
FORGIVENESS
AUTHOR-
IZED.—Whenever a student’s withdrawal 
from an institution of higher education is 
necessitated by reason of service in the 
uniformed services, the Secretary shall, 
with respect to the payment period or pe-
riod of enrollment for which such student 
did not receive academic credit as a result 
of such withdrawal, carry out a program— 
‘‘(I) through the holder of the 
loan, to assume the obligation to 
repay— 
‘‘(aa) the outstanding prin-
ciple and accrued interest on any 
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loan assistance awarded to the 
student under part B (including 
to a parent on behalf of the stu-
dent under section 428B) for 
such payment period or period of 
enrollment; minus 
‘‘(bb) any amount of such 
loan assistance returned by the 
institution in accordance with 
paragraph (1) of this subsection 
for such payment period or pe-
riod of enrollment; and 
‘‘(II) to cancel— 
‘‘(aa) the outstanding prin-
ciple and accrued interest on the 
loan assistance awarded to the 
student under part D or E (in-
cluding a Federal Direct PLUS 
loan awarded to a parent on be-
half of the student) for such pay-
ment period or period of enroll-
ment; minus 
‘‘(bb) any amount of such 
loan assistance returned by the 
institution in accordance with 
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paragraph (1) of this subsection 
for such payment period or pe-
riod of enrollment. 
‘‘(iv) 
REIMBURSEMENT
FOR
CAN-
CELLATION OF PERKINS LOANS.—The Sec-
retary shall pay to each institution for 
each fiscal year an amount equal to the ag-
gregate of the amounts of Federal Perkins 
loans in such institutions’s student loan 
fund which are cancelled pursuant to 
clause (iii)(II) for such fiscal year, minus 
an amount equal to the aggregate of the 
amounts of any such loans so canceled 
which were made from Federal capital con-
tributions to its student loan fund provided 
by the Secretary under section 468. None 
of the funds appropriated pursuant to sec-
tion 461(b) shall be available for payments 
pursuant to this paragraph. To the extent 
feasible, the Secretary shall pay the 
amounts for which any institution qualifies 
under this paragraph not later than 3 
months after the institution files an insti-
tutional 
application 
for 
campus-based 
funds. 
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‘‘(v) LOAN ELIGIBILITY AND LIMITS 
FOR
STUDENTS.—Any amounts that are 
returned by an institution in accordance 
with paragraph (1), or forgiven or waived 
by the Secretary under this subparagraph, 
with respect to a payment period or period 
of enrollment for which a student did not 
receive academic credit as a result of with-
drawal necessitated by reason of service in 
the uniformed services, shall not be in-
cluded in the calculation of the student’s 
annual or aggregate loan limits for assist-
ance under this title, or otherwise affect 
the student’s eligibility for grants or loans 
under this title. 
‘‘(vi) DEFINITION.—In this subpara-
graph, the term ‘service in the uniformed 
services’ has the meaning given such term 
in section 484C(a).’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this Act shall take effect for periods of service in the 
uniformed services beginning after the date of the 
enactment of this Act. 
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