Senator Hagan Introduces the Servicemember Higher Education Protection Act

by Ballard Spahr LLP

New legislation, titled the Servicemember Higher Education Protection Act (the “Bill”), was introduced recently by Senator Kay Hagan (D-NC). The Bill includes several provisions that expand protections under the Servicemembers Civil Relief Act (SCRA) with respect to student loans.

  • The Bill would amend the SCRA to expand the available interest rate limitation for student loans, aligning the protection with that currently applied only to mortgage obligations. Accordingly, the 6 percent limitation would be available for student loans both during the period of military service, and one year thereafter
  • The Bill would also amend the SCRA to expand the 6 percent interest rate cap to cover an obligation incurred during military service for the purpose of consolidating or refinancing one or more student loans that were incurred prior to military service. 
  • To help implement the foregoing changes, a definition of “student loan” would be added, which includes a federal student loan made, insured or guaranteed under title IV of the Higher Education Act, and a private student loan as defined in section 140(a) of the Truth in Lending Act. 
  • The process for invoking the 6 percent interest rate cap for certain federal student loans would be streamlined. The Higher Education Act would be amended such that information submitted by the Department of Defense (DoD) to the Department of Education (ED), that a borrower is or has been or is being called to military service, would constitute the required written notice and copy of military orders for the purpose of triggering the interest rate limitation. 
  • The Bill would require the ED, in consultation with the CFPB, to create a simplified disclosure and enrollment form for borrowers who are performing eligible military service. The disclosure must include information on benefits available under the Higher Education Act and the SCRA, and an enrollment form that a borrower may use to invoke: (i) protections available under the SCRA for certain federal student loans; and (ii) other benefits available under the Higher Education Act to borrowers performing eligible military service. The submission of this enrollment form, to the ED, would also constitute the written notice, but apparently not the copy of military orders, required to invoke the 6 percent interest rate limitation. 

The remaining sections of the Bill would amend the Higher Education Act, to enhance protections for servicemembers with student loan obligations.

  • The ED would be required to create a revised and searchable website with information about all federal and state student financial assistance programs available to servicemembers.
  • The National Student Loan Data System would be augmented to include information on the military and veteran status of borrowers.
  • The ED would be required to appoint a Military and Veteran Point of Contact within the office of the Student Loan Ombudsman, to help ensure borrowers receive the benefits to which they are entitled. 
  • The DoD, Department of Veterans Affairs, and ED would be required to ensure that loans are automatically discharged for a servicemember or veteran who has been assigned a disability rating of 100 percent. 
  • The ED would be required to work with the IRS and DoD to ensure that student loan borrowers in a hostile fire zone receive their benefits under current law so that interest does not accrue for eligible military borrowers.

This legislation comes on the heels of the recent $60 million settlement between Department of Justice, the ED, and a major student loan servicer, which is cited in the Bill’s press release in discussing the need for legislation. As reported previously on this blog, the settlement greatly expands the trigger for borrowers to invoke the SCRA’s 6 percent interest rate limitation. Somewhat surprisingly, the Bill does not appear to adopt any of those expanded triggers, although it would continue that expansion, though thankfully, through the legislative process. That said, President Obama’s subsequent announcement that he has directed the ED to reduce rates automatically for eligible borrowers, coming as it did, just days after the Bill was introduced, may greatly lessen the likelihood of its ever being enacted into law.  

Further information on the Bill can be found here.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP

Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.