Federal Updates

Congress considers new student loan legislation

Last week, members of the Senate and House announced separate pieces of legislation in response to recent credit market and student loan access concerns. Although the two bills differ slightly, both would make significant changes to the Higher Education Act (HEA), with the intent of ensuring that access to student loan funding will not be negatively affected by the possibility of national economic difficulties. These pieces of legislation are separate from and in addition to the HEA reauthorization legislation currently pending in Congress.

While the official language of both bills is not yet available, both bills focus on:

• increasing Stafford loan limits;
• providing in-school deferment for Parent PLUS borrowers;
• strengthening and clarifying the lender-of-last resort provisions;
• providing ED with temporary authority to act as a FFELP secondary market; and
• in the Senate version, increasing the maximum annual Pell grant amount for certain students.

The Senate bill (S 2815) was introduced by Senator Edward Kennedy and is titled the "Strengthening Student Aid for All Act." The legislation is posted shortly on THOMAS, the U.S. Library of Congress Web site. To access it, go to http://thomas.loc.gov/, and in the space for "Search Bill Text," enter "S2815," click on "Bill Number," and click "Search."

A summary of the House version, crafted by Rep. George Miller (D-Calif.) and Rep. Rubén Hinojosa (D-Texas), is available on the House Education and Labor Committee's Web site at www.house.gov/apps/list/speech/edlabor_dem/rel040308.html.

More information
These bills are still early in the legislative process and the provisions will likely be modified. Shoptalk Online will keep readers informed as this legislation moves through the committee and conference stages.

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PLUS MPN extended

The current PLUS Loan Master Promissory Note (PLUS MPN) was scheduled to expire on March 31, 2008. However, ED has provided approval for FFELP participants to continue using the current form until such time as the revised PLUS MPN is approved. Shoptalk Online will announce the revised form when it is available.

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Current special allowance rates: Quarter ending March 31, 2008

The following rates apply for the quarter ending March 31, 2008:

The average of the bond equivalent rates of the 91-day Treasury bills auctioned during the quarter ending March 31, 2008, is 2.10 percent.

The average of the bond equivalent rates of the quotes of the three-month commercial paper (financial) rates in effect for each of the days in the quarter ending March 31, 2008 is 3.24 percent.

The FFELP special allowance rates for the most recent quarter are available on TG Online at www.tgslc.org/policy/index.cfm.

To learn more
For questions about special allowance rates, contact TG customer assistance at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.

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