Federal Updates

ECASLA update

ED recently announced the creation of a new loan purchase program under the "Ensuring Continued Access to Student Loans Act of 2008" (ECASLA). This short-term program will complement the existing loan purchase programs authorized by the ECASLA (see Shoptalk Online editions 456, 461, and 473).

Effective December 1, 2008, ED will purchase up to $500 million of 2007-08 academic year FFELP loans each week, not to exceed a total of $6.5 billion. This short-term program will end on whichever comes first: February 28, 2009, or the date of the commencement of the Asset-Backed Commercial Paper conduit described in a November 10, 2008, Electronic Announcement (see Shoptalk Online edition 480). A loan holder wishing to sell 2007-08 academic year loans to ED must execute the Master Loan Sale Agreement 2007-2008 (included with the Federal Register notice below), even if it previously executed a Master Loan Sale Agreement for 2008-09 loans. However, a "Notice of Intent to Participate" is not required for the 2007-08 short-term purchase program.

Eligible loans include fully-disbursed subsidized and unsubsidized Stafford loans, as well as PLUS loans that were originated in the 2007-08 academic year. The loans must have been first disbursed on or after May 1, 2007, for a loan period that included or began on or after July 1, 2007.

Ineligible loans include loans that are more than 210 days delinquent at the time of sale or in default; loans for which a claim has been filed with the guarantor; and loans that hold any encumbrance, lien, security interest, or any other prior commitment. Loans for which a cash rebate was offered to the borrower are ineligible; however, loans with other borrower benefits may be eligible, as described in the Federal Register notice.

Under this program, ED will purchase loans at 97 percent of the total of the outstanding principal balance plus accrued but unpaid interest as of the purchase date. Purchased loans will be serviced by ED. As a condition of participation in this program, the lender agrees to originate or acquire new FFELP loans and to continue to participate in the FFELP.

More information Visit http://federalstudentaid.ed.gov/ffelp to view ECASLA-related Dear Colleague Letters and Electronic Announcements. The Federal Register notice, including the Master Loan Sale Agreement 2007-2008, is available at http://edocket.access.gpo.gov/2008/pdf/E8-28632.pdf.

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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 December 2008 Closed School Monthly Report supplied by ED. Schools listed are those with which TG has done business or to which TG has otherwise provided services.

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