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The Higher Education Reconciliation Act of 2005 (HERA)

HERA changed some of the terms of the federal Stafford, PLUS, and consolidation loans made under the Federal Family Education Loan Program (FFELP). As a result, certain terms of the loan(s) you received under your federal Stafford or federal PLUS loan MPN or your federal consolidation application/promissory note now differ from the terms found in your promissory note(s) and Borrower's Rights and Responsibilities Statement(s).

These are the changes that may affect you:

  • During the in-school, grace, and deferment periods and during any period in which you are on active-duty military service, your lender will postpone and align principal payments on your outstanding Stafford loan (does not apply to PLUS loans or consolidation loans).
  • A loan is eligible for discharge if it is determined that your eligibility for the loan was falsely certified as a result of identity theft.
  • As of July 1, 2006, a married couple may no longer borrow a federal consolidation loan as joint borrowers.
  • As of July 1, 2006, for those with loans first disbursed on/after July 1, 2001, a deferment is available for a period of up to 3 years if the borrower is serving on active duty during a war or other military operation or national emergency or if the borrower is performing qualifying National Guard duty during a war or other military operation or other national emergency. If you have a consolidation loan, all of the federal loans included in the consolidation loan must have been disbursed on/after July 1, 2001 in order to be eligible for this deferment.