Federal Updates

ED revises ECASLA loan purchase provisions

On November 8, ED issued a press release announcing two changes to the loan purchase programs authorized by the Ensuring Continued Access to Student Loans Act (ECASLA).

First, ED will "replicate for the 2009-10 academic year the successful loan purchase and participation interest programs announced in May 2008 for the 2008-09 school year" as authorized by H.R. 6889 (see Shoptalk Online edition 473).

In addition, ED plans to expand the timeframe for loan eligibility. This change will provide liquidity support to one or more conforming Asset-Backed Commercial Paper (ABCP) conduits to purchase and provide longer-term financing for FFELP loans. Under this change, ED intends that all fully disbursed non-consolidation FFELP loans awarded between October 1, 2003, and July 1, 2009, will be eligible for inclusion. Loans in the conduit will be financed with new issues of ABCP, and ED will enter into a forward commitment to purchase eligible student loans from the conduit in the future at a prearranged price, at no net cost to the federal government. This provision will assist lenders that lack enough up-front funds to participate in ECASLA by enabling them to re-enter the market using loans disbursed in previous academic years.

More information
Shoptalk Online will provide more information as it becomes available. ED's press release is available online at www.ed.gov/news/pressreleases/2008/11/11082008.html. For more information on the ECASLA programs, please view ED's fact sheet at www.ed.gov/students/college/aid/ecasla-facts.html.

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Loan purchase programs guidance

On October 31, ED released Electronic Announcement (E-ANN) #34 regarding the implementation of the loan purchase programs authorized by the Ensuring Continued Access to Student Loans Act (ECASLA).

E-ANN #34 provides interpretative guidance, in the form of 48 new "Questions and Answers," regarding the loan purchase programs as referred to in Section 27 of the Master Loan Sale Agreement and Section 37 of the Master Participation Agreement.

For more information
The E-ANN is available online at http://federalstudentaid.ed.gov/ffelp.

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