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
Published: 2006-11-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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. 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  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. 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. To  determine what policies or practices colleges and universities have in  place to assist students serving on active duty, between January and  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. 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.
subsections: section_title: Background
paragraphs: 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.
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. Because these loans are  not subsidized by the federal government, borrowers are responsible for  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. 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. 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. 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. 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  have been unable to find full-time employment or can demonstrate  economic hardship. 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. 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.
section_title: 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
paragraphs: 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.
subsections: section_title: Education’s Waivers and Modifications under HEROES Aimed at Relieving Financial and Administrative Burden for Student Financial Aid Recipients Serving on Active Duty
paragraphs: 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. 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 also cover borrowers who had  already defaulted on their student loans at the time of departure.  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. 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  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.
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.)
See appendix II for a full list of the waivers and modifications.
section_title: Education Has Not Assessed the Impact of Waivers and Modifications on Students and Federal Student Financial Aid Recipients, as Required
paragraphs: 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.
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  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.
section_title: Lenders Are Assisting Borrowers as Required by Education and Some Are Providing Additional Benefits
paragraphs: 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.
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. 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  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.
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.
section_title: Most Schools Have Had Students Leave for Active Duty and Have Policies in Place to Aid Their Departure and Return
paragraphs: 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.
subsections: section_title: Most Colleges and Universities Have Had Students Leave for Active Duty
paragraphs: 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. 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.
section_title: Most Schools Have Policies in Place to Aid Students When They Leave for Active Duty Service and Return to School
paragraphs: 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. 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.
section_title: School Policies Address the Broad Range of Issues Confronting Students Who Must Leave for Active Duty Service
paragraphs: 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.
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.
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).
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  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.
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. 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  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. Officials at  one college we visited reported that students returning from active duty  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.
section_title: Conclusions
paragraphs: 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  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.
section_title: Recommendation for Executive Action
paragraphs: 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.
section_title: Agency Comments
paragraphs: 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  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.
section_title: Appendix I: Methodology for Survey of Colleges and Universities
paragraphs: 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.
subsections: section_title: Sample Design and Errors
paragraphs: 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. 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.
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.
section_title: Nonsampling Errors
paragraphs: 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 Web- based 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  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-of- range values. On the basis of these reviews and tests, we found the IPEDS  data sufficiently reliable for defining our population of schools.
section_title: Appendix II: Waivers and Modifications
section_title: Appendix III: Comments from the Department of Education
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: Sherri Doughty, Assistant Director  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.