H.R. 4893: National Guard and Reserve Student Loan Fairness Act

This bill, titled the National Guard and Reserve Student Loan Fairness Act, aims to amend the Higher Education Act of 1965 to enhance student loan benefits for members of the reserve components of the Armed Forces. Here’s a breakdown of its provisions:

Purpose of the Bill

The primary goal is to ensure that reservists receive appropriate credit toward public service loan forgiveness while they are serving. This includes counting their time in service as qualifying time for student loan payment forgiveness, thereby helping them manage their student debt more effectively.

Key Provisions

• Qualifying Payments

  The bill specifies how qualifying payments will be calculated for members of the reserve components:

  • If a reservist completes a full year of service, each month in that year will be considered as a month for which a qualifying payment was made, provided that:
  • The borrower made corresponding monthly payments on eligible Federal Direct Loans, and
  • Those payments either met the usual requirements or would have qualified had the borrower been employed full-time in a public service role.
  • If a reservist completes a partial year of service, up to six months will be counted as qualifying payments under similar conditions.

• Data Matching Requirements

  The bill requires joint efforts between the Secretary of Defense and the Secretary of Education to establish a data matching system within one year of the bill's enactment. This system will:

  • Identify individuals who made qualifying student loan payments while serving as reservists.
  • Certify their total years of service and qualifying payments without needing further action from those individuals.

• Definitions

  Terms used in the bill are clearly defined to ensure clarity:

  • Full year of covered service: A year in which a reservist receives at least 80 points for retired pay eligibility.
  • Partial year of covered service: A year in which a reservist receives between 50 and 79 points for retired pay eligibility.
  • Armed Force: Defined according to existing legal definitions in the relevant federal code.

Overall Impact

The bill is designed to improve financial outcomes for military reservists by simplifying the process of qualifying for loan forgiveness and acknowledging their service through student loan payments. It aims to provide some relief to those who balance military obligations with educational debt obligations.

Relevant Companies

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