Federal updates

ED announces revised deferment forms

Borrowers dealing with tough economic circumstances will now receive additional flexibility in the deferment application process. Among the regulatory changes approved in the final rules published November 1, 2002, are new rules affecting the eligibility criteria for unemployment deferment and the method for calculating the amount of a borrower's education debt burden for determining eligibility for economic hardship deferment. See Shoptalk Online Edition 182 for details on the final rules.

To implement these changes, ED has announced the approval of the newly revised Unemployment Deferment Request (UNEM) and Economic Hardship Deferment Request (HRD) forms for immediate use in Dear Colleague Letter (DCL) GEN-03-04, dated March 14, 2003. The revisions to these forms are described below.

Unemployment deferment

• Prior to the final rules, for a borrower to qualify for an unemployment deferment extension beyond the initial period, the borrower was required to provide a written certification describing job search details. Regulations no longer require that a borrower provide job search details. Instead, a borrower must provide only written certification that he or she has made six diligent attempts to secure full-time employment during the last six months.
• In addition, prior to the final rules, a borrower was required to register with an employment agency if there was one available within a 50-mile radius of his or her permanent or temporary address. The regulations now stipulate that the borrower must register with such an agency only if one is available within a 50-mile radius of his or her current address.

Economic hardship deferment

• When calculating a borrower's educational debt burden for deferment eligibility, the loan holder must consider the borrower's monthly payments on all federal postsecondary education loans. Prior to the final rules, loan holders were required to base eligibility determinations on what the monthly payment amount would be if the borrower were repaying the loan over a 10-year period from the date the borrower entered repayment, regardless of the length of the borrower's actual repayment schedule or the borrower's actual monthly payment amount. Regulations now require loan holders to base eligibility determinations on a borrower's actual repayment schedule rather than a 10-year repayment schedule, if the actual schedule is for 10 years or less.
• In addition to the change above, the HRD form and accompanying worksheets reflect the Department of Health and Human Services' (HHS') update to the United States federal poverty guidelines in the Federal Register dated February 7, 2003.

The UNEM and HRD forms are available for download at www.tgslc.org/forms/frms_def.cfm. The new forms are also available from Joyce Henderson in customer services at (800) 252-9743, ext. 4546.

More information and questions
For more information about the changes to the UNEM and HRD forms, see DCL GEN-03-04 at www.ifap.ed.gov/dpcletters/GEN0304.html.

For the updated poverty guidelines, visit the HHS Web site at http://aspe.os.dhhs.gov/poverty/03poverty.htm.

For general questions, contact TG customer assistance at (800) 845-6267 or send an e-mail message to cust.assist@tgslc.org.

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