Higher Educational Opportunity Act (HEOA)

The Higher Education Opportunity Act (HEOA)
Effective date:  August 14, 2008

All Loan Programs (FFEL, Direct Loan, Perkins Loans)

Loan Repayment for Civil Legal Assistance Attorneys
HEOA section 431
The HEOA establishes a new loan repayment program for civil legal assistance attorneys.  The purpose of this program is to encourage qualified individuals to enter and continue employment as civil legal assistance attorneys.  This program is not currently funded and cannot be implemented until funding is provided by Congress.

Forbearance
HEOA section 464
The HEOA eliminates the requirement that a forbearance request be in writing. Schools may now process the forbearance requests based on a verbal request from a borrower.  The school and borrower must agree to the terms of the forbearance.  The school confirms this agreement by notice to the borrower, and by recording the terms in the borrower’s file.

Rehabilitation
HEOA section 464
The HEOA reduces the number of on-time, consecutive, monthly payments required to rehabilitate a loan from 12 to 9. An institution may consider borrowers who began making rehabilitation payments prior to August 14, 2008, to have successfully rehabilitated their loans after making nine qualifying monthly payments if at least one of those payments was made on or after August 14, 2008. An institution must treat all of its Perkins Loan borrowers consistently in applying the 12-month or 9-month standard for borrowers who began making rehabilitation payments before August 14, 2008.

Military Service Cancellation
HEOA section 465
The HEOA eliminates the 50 percent limitation on military service cancellations.  Borrowers may now receive military service cancellation of up to 100 percent of the loan in increments of 15 percent (for the first and second years of service); 20 percent (for the third and fourth years of service); and 30 percent (for the fifth year of service).

Expansion of Teacher, Head Start, and Law Enforcement Cancellation Categories
HEOA section 465
The HEAO expands the existing teacher, Head Start, and law enforcement cancellation categories.  These cancellation categories have been expanded as follows:

A teacher in a designated low-income elementary or secondary school who is employed by an educational service agency may qualify for a teacher cancellation.  In addition, a teacher in a designated low-income elementary school, or secondary school, or location operated by an educational service agency may qualify for a teacher cancellation.  The Department will determine whether a school or location operated by an educational service agency is low-income pursuant to regulations of the Department and after consultation with the State education agency.

The Head Start cancellation is expanded to include full-time staff members in a pre-kindergarten or childcare program that is licensed or regulated by the State. 

The law enforcement/corrections officer cancellation is expanded to include full-time attorneys employed in Federal Public Defender Organizations or Community Defender Organizations, established in accordance with Section 3006A(g)(2) of Title 18, U.S.C. (see http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=browse_usc&docid=Cite:+18USC3006A).

Eligible service performed on or after August 14, 2008, in these expanded cancellation categories will qualify a borrower for cancellation, regardless of whether information on the expansion of the cancellation category appears on the borrower’s promissory note.

Addition of New Public Service Cancellation Categories
HEOA section 465

The HEOA adds public service cancellation categories for borrowers who are

• full-time fire fighters with a local, State, or Federal fire department or fire district;
• full-time faculty members at a Tribal College or University;
• librarians with a master’s degree in library science who are employed in an elementary or secondary school that qualifies for Title I funding, or in a public library that serves a geographic area that includes one or more Title I schools; or 
• full-time speech-language pathologists with a master’s degree who are working exclusively with Title I eligible schools.

Eligible service performed on or after August 14, 2008, in these new cancellation categories will qualify a borrower for cancellation, regardless of whether the cancellation category appears on the borrower’s promissory note.

View the complete text of the Higher Educational Opportunity Act.