§2174 — Title 10 Armed Forces | U.S. Code

Summary

The military can pay the interest and any extra “special allowance” that builds up on certain federal student loans for some service members. A service member can get this only while on active duty in their first enlistment, or if an officer has not served more than three years on active duty. The member must owe one or more covered loans, and must not be in default. Covered loans are those made, insured, or guaranteed under parts B, D, and E of title IV of the Higher Education Act of 1965. Payments may be made for any 36 consecutive months while the member is eligible. A military department needs approval from the Secretary of Defense and must follow rules the Secretary of Defense sets. Money for these payments comes from funds already available for military pay. The Defense Department and, when the Coast Guard is not part of the Navy, the department that runs the Coast Guard must work with the Secretary of Education. The military transfers the needed money to the Education Department to pay interest and special allowances and to cover reasonable administrative costs. Special allowance — the extra payment defined in section 438 of the Higher Education Act of 1965.

Title 10, §2174

Armed Forces — Source: USLM XML via OLRC

(a)(1)The Secretary concerned may pay in accordance with this section the interest and any special allowances that accrue on one or more student loans of an eligible member of the armed forces.

(2)The Secretary of a military department may exercise the authority under paragraph (1) only if approved by the Secretary of Defense and subject to such requirements, conditions, and restrictions as the Secretary of Defense may prescribe.

(b)A member of the armed forces is eligible for the benefit under subsection (a) while the member—

(1)is serving on active duty in fulfillment of the member’s first enlistment in the armed forces or, in the case of an officer, is serving on active duty and has not completed more than three years of service on active duty;

(2)is the debtor on one or more unpaid loans described in subsection (c); and

(3)is not in default on any such loan.

(c)The authority to make payments under subsection (a) may be exercised with respect to the following loans:

(1)A loan made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.).

(2)A loan made under part D of such title (20 U.S.C. 1087a et seq.).

(3)A loan made under part E of such title (20 U.S.C. 1087aa et seq.).

(d)The months for which interest and any special allowance may be paid on behalf of a member of the armed forces under this section are any 36 consecutive months during which the member is eligible under subsection (b).

(e)Appropriations available for the pay and allowances of military personnel shall be available for payments under this section.

(f)(1)The Secretary of Defense and, with respect to the Coast Guard when it is not operating as a service in the Navy, the Secretary of the Department in which the Coast Guard is operating shall consult with the Secretary of Education regarding the administration of the authority under this section.

(2)The Secretary concerned shall transfer to the Secretary of Education the funds necessary—

(A)to pay interest and special allowances on student loans under this section (in accordance with section 428(o), 455(l), and 464(j) of the Higher Education Act of 1965 (20 U.S.C. 1078(o), 1087e(l), and 1087dd(j)); and

(B)to reimburse the Secretary of Education for any reasonable administrative costs incurred by the Secretary in coordinating the program under this section with the administration of the student loan programs under parts B, D, and E of title IV of the Higher Education Act of 1965.

(g)In this section, the term “special allowance” means a special allowance that is payable under section 438 of the Higher Education Act of 1965 (20 U.S.C. 1087–1).

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Higher Education Act of 1965, referred to in subsecs. (c) and (f)(2)(B), is Pub. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Parts B, D, and E of title IV of the Act are classified to parts B (§ 1071 et seq.), D (§ 1087a et seq.), and E (§ 1087aa et seq.), respectively, of subchapter IV of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see

Short Title

note set out under section 1001 of Title 20 and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 107–314, div. A, title VI, § 651(e), Dec. 2, 2002, 116 Stat. 2581, provided that: “The

Amendments

made by this section [enacting this section and amending section 1078, 1087e, and 1087dd of Title 20, Education] shall apply with respect to interest, and any special allowance under section 438 of the Higher Education Act of 1965 [20 U.S.C. 1087–1], that accrue for months beginning on or after October 1, 2003, on student loans described in subsection (c) of section 2174 of title 10, United States Code (as added by subsection (a)), that were made before, on, or after such date to members of the Armed Forces who are on active duty (as defined in section 101(d) of title 10, United States Code) on or after that date.”

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see section 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

§2174 Interest payment program: members on active duty