Federal Updates

Progress on economic stimulus bill

In edition 487, Shoptalk Online reported that a new economic stimulus bill (H.R. 1) was winding its way through the legislative process. H.R.1, or "The American Recovery and Investment Act of 2009," includes several financial aid-related provisions among its wide array of proposals. Since our original report, the full House has approved H.R.1 by a vote of 244-188, while the Senate is scheduled to vote on its version of the legislation (S.336, "The American Recovery and Reinvestment Plan") this week.

The Senate version of the bill differs from its House counterpart in many ways, including its treatment of the federal financial aid programs. Most notably, the Senate version proposes no increases in unsubsidized Stafford annual or aggregate loan limits.

What's next?
Once the Senate approves its bill, a conference committee composed of members of the House and Senate will work to craft a compromise bill. Congressional leaders have indicated that they hope to present a final bill to President Obama for his signature before Congress adjourns for the Presidents Day recess in mid-February.

More information
Shoptalk Online will continue to keep readers informed as this bill progresses through the legislative process. To access the text of H.R. 1 or S.336, go to THOMAS, the U.S. Congress Web site, at http://thomas.loc.gov. In the space for "Search Bill Summary and Status," enter the bill prefix and number, select "Bill Number," and then click on "Search."

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ED submits report to Congress on FAFSA simplification

Although the Higher Education Opportunity Act of 2008 (HEOA) introduced myriad disclosure and reporting requirements for schools, loan holders, and guarantors, it also included some new administrative requirements for the Department of Education. One of those requirements — that ED submit a report to Congress on its efforts to simplify the Free Application for Federal Student Aid (FAFSA) — was fulfilled when former ED Secretary Margaret Spellings transmitted the report to Congress on January 16, 2009.

In the report, ED concludes that a student's eligibility for federal student aid may be determined based on only two data elements, income and family size. ED also points out that, while reducing FAFSA data elements is an important step in the simplification process, Congress must amend the need analysis formula in the Higher Education Act in order for such simplification to occur.

More information
The announcement, along with ED's cover letter to Congress, the full report, and a proposed simplified FAFSA, are available on the Information for Financial Aid Professionals Web site at www.ifap.ed.gov/eannouncements/012109RptCongressSimplyFAFSA.html.

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Customer service information for FFELP borrowers with loans purchased by ED

On January 30, ED released an Electronic Announcement (E-ANN) providing customer service information for borrowers of FFELP loans that have been purchased by ED through the Ensuring Continued Access to Student Loans Act (ECASLA) programs. Upon purchase of a loan, ED becomes the owner and servicer of the loan, and both the prior FFELP loan holder and ED correspond with the borrower to inform him or her of the transaction. To assist schools, this E-ANN includes the customer service contact information provided in ED's borrower correspondence.

Please be aware that ED provides customer service for the Direct Loan (DL) Program through a different call center. To reduce the potential for confusion, the E-ANN also includes customer service contact information for the DL call center.

More information
The E-ANN is available on the Information for Financial Aid Professionals (IFAP) Web site at www.ifap.ed.gov/eannouncements/013009CustServInfoforBorrowers.html.

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Heads up: Draft CDRs coming next week

ED announced last week that it will release draft FY 2007 cohort default rates to domestic and foreign schools on February 9, 2009. Shoptalk Online will provide more information in next week's edition.

ED's announcement is available on the Information for Financial Aid Professionals Web site at www.ifap.ed.gov/eannouncements/012909FY07DraftCDRRel.html.

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