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The following information on cancellation benefits was taken from a mailing list post made by Gail McLaron from the Department of Education. These guidelines may help you determine eligibility for cancellations under the amended Higher Education Act.

When notifying borrowers of the extension of cancellation benefits authorized by the Higher Education Amendments of 1998, please keep in mind the following guidance:

Effective October 7, 1998, schools and servicers may grant cancellations under Section 465(a)(2) of the Higher Education Act of 1965, as amended, to borrowers with a loan made under Part E who were previously ineligible for cancellation because of when their loan was made or the terms of their promissory note. Only periods of qualifying service performed ON OR AFTER October 7, 1998 are eligible for cancellation. Cancellation benefits may not be granted retroactively for qualifying service performed before enactment.

For example, prior to October 7, 1998, a borrower who performed qualifying service as a law enforcement officer was not eligible for a law enforcement cancellation if the loan was made prior to November 29, 1990. Upon enactment of the Higher Education Amendments of 1998, however, such a borrower is now eligible for cancellation benefits on the outstanding balance remaining on the loan regardless o the fact that the loan was made before November 19, 1990.

Please feel free to call me at 202-708-8242 or e:mail me at gail_mclarnon@ed.gov for clarification or questions on the above guidance.

Gail McLaron
Program Specialist
Office of Student Financial Assistance
Department of Education