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Trends and Issues
Policy Potpourri
Q.: There have been recent regulatory changes to the economic hardship deferment eligibility criteria as well as new federal minimum wage and poverty guideline amounts used to determine a borrower's eligibility. However, the current Economic Hardship Deferment Request form has not been updated. What information has changed and what are the current minimum wage and poverty guideline amounts that should be used to determine a borrower's eligibility for the deferment?
A.: The NCHELP Operations Forms Subcommittee will soon provide lenders and servicers with a detailed information sheet for processing the Economic Hardship Deferment Request until such time that ED publishes a revised form. Below are the changes for determining eligibility criteria.
- Eligibility criteria for items 4, 5, and 6 on the form have changed from using the poverty guideline income for a family of two regardless of the actual family size, to using 150 percent of the poverty guideline applicable to the borrower's actual family size.
- The borrower's actual family size means the number determined by counting the borrower, the borrower's spouse, and the borrower's children, including unborn children who will be born during the period covered by the deferment, if the children receive more than half their support from the borrower. A borrower's family size also includes other individuals if, at the time the borrower requests the economic hardship deferment, the other individuals (A) live with the borrower; and (B) receive more than half their support from the borrower and will continue to receive this support from the borrower for the year the borrower certifies family size. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
- The current minimum wage amount, effective July 24, 2008, is $6.55 per hour. The chart below shows monthly amounts that represent 150 percent of the current poverty guidelines for the applicable family size.
Economic Hardship Deferment Request Poverty Guideline Chart
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These monthly amounts represent 150% of the poverty guideline |
| Borrower's Family Size | 48 Contiguous States and District of Columbia | Alaska | Hawaii |
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| 1 | $1,300.00 | $1,625.00 | $1,495.00 |
| 2 | $1,750.00 | $2,187.50 | $2,012.50 |
| 3 | $2,200.00 | $2,750.00 | $2,530.00 |
| 4 | $2,650.00 | $3,312.50 | $3,047.50 |
| For each additional person, add: | $450.00 | $562.50 | $517.50 |
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