2008 NCHELP Training Conference Legislative and Regulatory Update November 3, 2008 Pamela MoranSlide 2
Agenda Legislation Update Loan Access Initiatives Regulations UpdateSlide 3
Legislation Update Higher Education Reconciliation Act (HERA) (P.L. 109-171) – February 8, 2006 College Cost Reduction and Access Act (CCRAA)(P.L. 110-84) – September 27, 2007Slide 5
Legislation Update Ensuring Continued Access to Student Loans Act (ECASLA) (P.L. 110-227) – May 7, 2008 Higher Education Opportunity Act (P.L. 110-315) (HEOA) – August 14, 2008 H.R. 6889 (P. L. 110-350) – October 7, 2008Slide 6
HERA Reauthorized FFEL Program until 2012 Increased Loan Limits Phase-Out of Borrower Origination Fees Grad/Prof PLUS IntroducedSlide 7
HERA Aligned Repayment Plans –FFEL/DL Disbursement Relief – Cohort Default Rate Waivers for Schools Reduced PLUS Interest RatesSlide 8
HERA Identity Theft Discharge Military Deferment Loan Rehabilitation Relief – FFEL/DLSlide 9
HERA Consolidation Loan – Married/In-school/Early Conversion wiped out School-as-Lender/Use of Lender Trustee Lender Reduced Insurance/"Negative SAP"Slide 10
CCRAA Reduced FFEL/DL Interest Rates for Undergrad Subsidized Loans New Income-Based Repayment Plan –FFEL/DL New Public Service Loan Forgiveness - DLSlide 11
CCRAA Revised Deferments: Economic Hardship – Changed Eligibility Standards Military Service Expanded and Post-Active Duty AddedSlide 12
CCRAA Lender (Offsets): Exceptional Performer Status Eliminated Insurance Reduced Loan Fees Increased Special Allowance Payments Reduced Origination Auction for PLUS (First-time Parent PLUS)Slide 13
CCRAA Guaranty Agency (Offsets): Collection Retention Allowance Reduced Account Maintenance FeesSlide 14
ECASLA Increased FFEL/DL Annual and Aggregate Loan Limits Parent PLUS Grace Period/ReliefSlide 15
ECASLA Lender-of-Last Resort Authority Enhanced ED Granted Authority to Purchase Loans and Participation Interest in Loans to guarantee FFEL advance accessSlide 16
ECASLA FFEL/DL LOAN LIMITS – New $2,000 yearly Unsub Stafford advance sum for ward college understudies Additional $2,000 Unsub Stafford yearly advance sum for wards with no PLUS, autonomous students, and for non-degree preliminary coursework for student programsSlide 17
ECASLA FFEL/DL LOAN LIMITS - unaltered $7,000 Additional Unsub Stafford for non-degree preliminary coursework for graduate/proficient projects $7,000 Additional Unsub Stafford for non-degree instructor confirmation courseworkSlide 18
ECASLA FFEL/DL LOAN LIMITS - Increased aggregate for ward students from $23,000 to $31,000 (close to $23,000 sponsored) Increased aggregate for free college understudies from $46,000 to $57,500 (no more that $23,000 financed)Slide 19
ECASLA FFEL/DL LOAN LIMITS - aggregate for graduate/proficient stays at $138,500 (close to $65,000 financed)Slide 20
ECASLA PLUS Loan Changes - Optional postponed reimbursement begin date for guardian PLUS borrowers in view of ward\'s enlistment status Extenuating conditions for PLUS unfavorable credit may incorporate misconduct of up to 180 days on home loan or doctor\'s visit expense installmentsSlide 21
ECASLA-Loan Access Initiatives FFEL Lender-of-Last-Resort - Mandates LLR scope for all advance sorts – Subsidized and Unsubsidized Stafford and PLUS for guardians and graduate/proficient understudies Authorizes institutional assignment for LLR through June 30, 2009Slide 22
ECASLA-Loan Access Initiatives ED FFEL Loan Purchase Authority - Terms and conditions set up by the Secretary in meeting with Treasury and OMB May create no "net" expense to the Federal government Includes no development subsidizing for banksSlide 23
ECASLA-Loan Access Initiatives Loan Purchase Commitment Program - ED Commitment to buy qualified 2008-2009 FFEL advances through September 30, 2009 from any FFEL moneylender/holder Loans must be completely dispensed to be obtained 45-day early notification from loan specialist of advances to be soldSlide 24
ECASLA-Loan Access Initiatives Loan Participation Purchase Program - ED Commitment to buy "cooperation premiums" in qualified 2008-2009 FFEL advances Purchase gives liquidity to bank To fire ED premium, bank reimburses ED by recovering advances or offering them to EDSlide 25
ECASLA-Loan Access Initiatives Go to www.ifap.ed.gov and hit ECASLA join for ECASLA DCLs and Legislative and Legal Notices, Electronic Announcements, and Implementation Webinars on Loan Purchase ProgramsSlide 26
HR 6889-Loan Access Initiatives Extends Loan Purchase Programs through 2009-2010 scholarly yearSlide 27
Higher Education Opportunity Act (HEOA) Reauthorization of the HEA Signed into law August 14, 2008 Authority for protection of FFEL advances and to make Consolidation Loans stretched out to 2014 Provisions compelling August 14, 2008, unless generally indicatedSlide 28
HEOA - Implementation Six Hearings Concluded 10/15/09 Notice Announcing Formation of Committees and Soliciting Nominations for Non-Federal Negotiators – 11/08 Committees Established - 12/08 Negotiations – 2/09 – 4/09Slide 29
HEOA - Implementation NPRM Prepared/Cleared by OMB – 4/09-7/09 NPRM Published - 8/09 Comment Period Ends – 9/09 Final Regulations Prepared/Cleared by OMB – 9/09-10/09 Final Regulations Published – 11/1/09Slide 30
HEOA –Student Loan Programs Borrowers Estimated Financial Assistance Excludes all Veterans\' Education Benefits Servicemembers Civil Relief Act (SCRA) connected to FFEL and Direct Loan Borrowers - 6% loan fee top amid dynamic obligation administration starting date of authorization - Does not have any significant bearing to PLUS endorsersSlide 31
HEOA – Borrowers SCRA - proceeded with - Borrower must make composed solicitation - Related extraordinary recompense change for advances initially dispensed on/after July 1, 2008Slide 32
HEOA – Borrowers PLUS Loan suspension for: - in-school period - up to six months for post-half-time enlistment periodSlide 33
HEOA – Borrowers PLUS Loan delay - At particular solicitation of guardian PLUS borrower in view of ward\'s status Granted naturally to graduate/prof borrower for post-enlistment period with required notificationSlide 34
HEOA – Borrowers Capitalization of PLUS Loan delay related gathered premium might be paid month to month or quarterly or promoted no more every now and again than quarterly for all borrowersSlide 35
HEOA – Borrowers PLUS Loan "unfriendly credit standard" elucidated for uncommon uncontrollable issues at hand to exist administrative standardSlide 36
HEOA – Borrowers Income-Based Repayment restricted to borrower with defaulted advances relegated to ED Rehabilitation of defaulted advances constrained to one open door – borrower-construct qualification proceeds unless redefault in light of beforehand restored advanceSlide 37
HEOA – Borrowers Loan Forgiveness extended, if Congress appropriates reserves, for: -Early Childhood Educators -Nurses -Foreign Language Specialists -Librarians -Higher Qualified Teachers serving understudies who are constrained English capable, from low-wage groups, and from underrepresented populacesSlide 38
HEOA – Borrowers Loan Forgiveness extended, if Congress appropriates stores, for: -Child Welfare Workers -Speech-Language Pathologists and Audiologists -School Counselors -Public Sector Employees -Medical Specialists -Mental Health ProfessionalsSlide 39
HEOA – Borrowers Loan Forgiveness extended, if Congress appropriates reserves, for: -Dentists -Nutrition Professionals -STEM Employees -Physical Therapists -Occupational Therapists -Superintendents, Principals, and different Administrators -Civil Legal Assistance AttorneysSlide 40
HEOA – Borrowers Total and Permanent Disability release accessible, July 1, 2010, subject to controls: -If borrower not able to take part in substantial productive action taking into account documented medicinal or mental impairment anticipated that would bring about death, or has endured or can be expected to keep going for nonstop period of at the very least 60 months Reinstatement approved if new title IV advance or salary surpasses destitution lineSlide 41
HEOA – Borrowers Total and Permanent Disability release accessible for applications got on/after August 14, 2008: -If borrower gives Department of Veterans Affairs (DVA) documentation demonstrating DVA assurance that borrower unemployable because of administration associated condition. No other restorative documentation required.Slide 42
HEOA – Borrowers through Direct Loan Program for Service Including 8/14/08 " No Interest Accrual" for close to 60 months for Direct Loan borrowers who: -are serving on dynamic obligation amid war or other military operation or national crisis, or in qualifying National Guard obligation amid the same, and -are serving in a region of threatening vibe that meets all requirements for unique paySlide 43
HEOA – Borrowers by means of Direct Loan Program for Service Including 8/14/08 FFEL borrowers may combine or reconsolidate FFEL combination credit in Direct Loan project to fit the bill for advantageSlide 44
HEOA – Borrowers by means of Direct Loan Program "Open Service Job" for Direct Loan Public Service Loan Forgiveness altered: -government work avoids time in US Congress -employments in general wellbeing, open interest law administrations, and staff instructing in "high needs zones" elucidatedSlide 45
HEOA – Borrowers by means of Direct Loan Program "Open Service Job" (cont.): - youth training as isolated classification, including Head Start and State-supported pre-kindergarten Applies to benefit on/after 10/1/2007Slide 46
HEOA – Schools Institutions of Higher Education (IHE) and IHE-subsidiary associations must ado
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