Colleges May Be Required to Refund Student Loans for Military Members Called Into Service

Published 01 July 08 05:20 PM | Student Loan Girl

At the same time the recently passed GI Bill was being pushed through Congress, legislators have been considering a veterans education “bill of rights” that would protect service members who are called to duty in the middle of their higher education studies, according to an article in The Chronicle of Higher Education (“Congress May Require Colleges to Repay Loans for Students Called to Military Service,” June 27, 2008).

Both the House and Senate are looking at legislation, which has become unpopular among colleges, that would require institutions to refund student loans and other out-of-pocket expenses to students who are called to active military duty mid-semester.

Under the proposed legislation, students would be able to sue colleges that fail to make the refunds and would require colleges to re-enroll veterans at the same academic status they held when they departed for military service.

Opponents say the requirements would be difficult to implement and that the potential changes would conflict with existing rules. They counter that Congress should require the loans to be discharged instead of having colleges repay them.

David Baime, vice president of the American Association of Community Colleges, claims that students should be responsible for the loans they take out, not the institutions they attend.

“It’s kind of outrageous to expect institutions to repay loans” that students take out, he said.

Supporter of the bill Patrick Campbell, legislative director for the Iraq and Afghanistan Veterans of America, says that the new requirements are only fair, pointing to the many horror stories of vets who have attempted to get refunds or re-enroll at their schools after returning from active duty.

Campbell said, “When veterans come home and their schools make them jump through hoops, some students will not go back.”