Federal Updates

Closed school corner

The following table provides a list of newly reported school closures and error corrections from the Postsecondary Educational Participants System (PEPS) and from the March 2008 Closed School Monthly Report supplied by the Department of Education.

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ED announces forthcoming increase in Stafford aggregate for health professions students

Some of our readers may remember that we alluded to a possible increase in Stafford aggregate loan limits for certain students in Shoptalk Online edition 438. Just this week, ED sent a letter to the Association of American Medical Colleges (AAMC), stating that it plans to increase the aggregate Stafford loan limit for health professional students. The current limit of $189,125 - which has been unchanged for over a decade — will be increased to $224,000.

More information
ED is expected to issue formal, detailed guidance in a Dear Colleague Letter in the near future. Shoptalk Online will keep readers informed.

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Third loan issues Neg Reg session concludes, fourth session planned

After making considerable progress toward reaching agreement on agenda items, the student loan issues team wrapped up its third negotiated rulemaking (a.k.a. Neg Reg) session on March 6. However, citing several outstanding issues that have not yet been fully explored, ED announced that a fourth session will be held on April 14-15. Those outstanding issues include the definition of a not-for-profit holder, various definitions relevant to the new public service loan forgiveness program, and some unresolved topics regarding the new income based repayment (IBR) plan.

The following developments during the third session are of particular interest:

• ED announced that it plans to eliminate the current debt burden test for the economic hardship deferment effective July 1, 2009, to coincide with the implementation of IBR. The debt burden test was removed by the College Cost Reduction and Access Act of 2007 (CCRAA), but ED has reserved the right to retain it in regulations temporarily, to provide assistance to borrowers who will likely qualify for IBR.
• Direct Grad PLUS loans will be added to the types of eligible loans (along with Direct Stafford and Direct Consolidation loans) for the public service loan forgiveness program.
• A National Guard member called to active state or national duty will be eligible for a mandatory forbearance for the period between the end of his or her grace period (or in-school deferment) and the beginning of his or her eligibility for a military deferment.

More information
Following the fourth Neg Reg meeting, ED will publish proposed regulations in the Federal Register with a request for public review and comment. Shoptalk Online will keep you informed as more information becomes available.

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Latest volume of the 2008-09 FSA Handbook now online

ED has released volume 6, Managing Campus-Based Programs, of the new 2008-09 Federal Student Aid Handbook (FSA Handbook). In total, five volumes of the latest FSA Handbook have been released, including:

• The Application and Verification Guide
• Volume 1: Student Eligibility
• Volume 2: School Eligibility and Operations
• Volume 5: Overawards, Overpayments, & Withdrawal Calculations
• Volume 6: Managing Campus-Based Programs

The current volumes are available on TG Online at www.tgslc.org/resources/fsa_handbook.cfm. Other volumes will be posted as they are released. Once all the volumes of the 2008-09 FSA Handbook have been released, TG will provide a single downloadable file encompassing all of the volumes. Watch future editions of Shoptalk Online for details.

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