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Federal Updates
ED issues reminder of disaster guidance
In light of recent federally-declared disasters, ED released Dear Colleague Letter (DCL) GEN-08-10/FP-08-08 on June 24, 2008, to remind schools, lenders, and guarantors of guidance for helping Title IV participants affected by a disaster.
CCRAA impacts R2T4 on the Web
On June 19, ED released an Electronic Announcement informing schools that its R2T4 on the website would be updated on September 28, 2008, to implement provisions related to the College Cost Reduction and Access Act of 2007 (CCRAA) that are effective today, July 1, 2008.
Déjà vu? Another HEA extension
It seems every few weeks, Shoptalk Online has reported another extension of the Higher Education Act (HEA). The most recent extension, S. 3180, was approved by Congress on June 25, and has been sent to the president for his signature. Like the previous bill, this is a "clean" extension, changing only the expiration of the HEA from June 30, 2008, to July 31, 2008.
ED releases terms and conditions of loan purchase programs under ECASLA
On July 1, ED published a notice of terms and conditions of the purpose of loans under the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA). Along with terms and conditions, the notice outlines the methodology and factors considered in evaluating the loan purchase price. The terms and conditions are effective on the date of the notice's publication in the Register.
TG Updates
Making the training difference: Join TG at this year's NASFAA Conference
TG's training sessions at this year's NASFAA National Conference focus on an assortment of timely financial aid topics, including regulatory changes, financial literacy, student retention, and lender list creation.
TG's June Edufacts™: Few students graduating with skills to manage finances well
TG's latest Edufacts™ considers some sobering news on the money management skills of high school seniors. Many of today's students are graduating with the equivalent of an "F" in financial literacy. Basic concepts of saving, investing, and using credit wisely elude many students, according to a biennial test administered by the Jump$tart Coalition for Personal Financial Literacy®.
Stay on top of loan interest rates with TG poster
The College Cost Reduction and Access Act of 2007 (CCRAA) made a number of significant changes to federal student loan programs, including cutting interest rates for certain subsidized Stafford loans.
TG provides support for lender list disclosure requirement
Final rules released last November 1 provided the requirements a school must meet if it chooses to distribute a preferred lender list to its borrowers. One of those requirements is to provide certain disclosures, including comparative information about reduced interest rates and other benefits offered by the lenders to prospective borrowers.
TG updates internal systems with annual and aggregate loan limits
On May 1, 2008, Congress approved H.R. 5715, the "Ensuring Continued Access to Student Loans Act of 2008" (ECASLA) which includes loan limit increases for undergraduate Stafford loan borrowers. On June 18, ED issued Dear Colleague Letter (DCL) GEN-08-08/FP-08-07, which addresses the increases in Stafford annual and aggregate undergraduate loan limits and provides the effective date as loans with first disbursements on or after July 1, 2008. For loan periods that cross over July 1, 2008, the increased loan limits apply only if the first disbursement is on or after July 1, 2008; or if the school certifies a supplemental loan for the loan period with a first disbursement on or after July 1, 2008.
Trends and Issues
Question of the week
I'm a little confused about how the new undergraduate Stafford loan limits in the Ensuring Continued Access to Student Loans Act (ECASLA) will impact undergraduates whose parents are unable to borrow a PLUS loan. For example, if a junior, dependent undergraduate borrows the subsidized Stafford annual limit of $5,500 and the new additional unsubsidized Stafford annual loan limit of $2,000, and then the student's parents apply for a PLUS loan and are denied, is the student now eligible to borrow the new increased $7,000 ($5,000 + $2,000) additional unsubsidized Stafford annual loan limit?
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