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Federal Updates
New FFELP deferment forms approved
On July 30, 2009, ED released Dear Colleague Letter (DCL) FP-09-06, which announced the approval of revised FFELP deferment forms and provided guidance on implementation of the new forms. The new forms accommodate the changes to the terms and conditions of deferments as mandated by the Higher Education Act of 1965, as amended by the Higher Education Opportunity Act of 2008 and the October 23, 2008 final rule published in the Federal Register.
The revised deferment forms include:
- Economic Hardship Deferment Request (HRD)
- Education Related Deferment Request (EDU)
- In-School Deferment Request (SCH)
- Parent PLUS Borrower Deferment Request (PLUS)
- Parental Leave/Working Mother Deferment Request (PLWM)
- Public Service Deferment Request (PUB)
- Unemployment Deferment Request (UNEM)
- Temporary Total Disability Deferment Request (TDIS)
Note that the Parent PLUS Borrower Deferment Request (PLUS) is a revised title formerly known as the PLUS Borrower with Dependent Student Deferment Request. Revisions for the Military Deferment Request (MIL) are in process; however, that deferment form does not expire until April 30, 2010.
Lenders and servicers (and schools that provide forms for their students and alumni) may begin to use the new forms immediately. They must provide only the newly approved forms (distinguished by their expiration date of May 31, 2012) to borrowers beginning January 1, 2010. However, if a lender or servicer receives previous versions of these deferment forms after January 1, 2010, the lender or servicer may process them.
PDF versions of the new forms are available as attachments to the DCL and on TG Online at www.tgslc.org/forms/frms_def.cfm.
More information
To access FP-09-06, visit http://ifap.ed.gov/dpcletters/FP0906.html. For questions about deferments, contact TG customer assistance at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.
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Federal Reserve Board approves final rules for private education loans
Last week, the Federal Reserve Board issued a press release announcing final amendments to Regulation Z, which implements the Truth in Lending Act, or TILA. These amendments are necessary in order to implement provisions of the Higher Education Opportunity Act of 2008 (HEOA).
Under the amendments, private education loan providers must disclose general information on loan terms and features on or with the loan application. The disclosure at the time of application must also include an example of the total cost of a loan based on the maximum rate that a provider may charge as well as information about the availability and terms of the federal student loan programs. Additional disclosures must be provided when the loan is approved and when the loan is consummated. The Board's amendments also implement the HEOA's restrictions on using the name, emblem, or mascot of an educational institution in a way that implies that the institution endorses the creditor's loans.
The Board provides private education loan model disclosure forms and samples that creditors may use to comply with the new disclosure requirements, including:
The new disclosure requirements will apply to loans made expressly for postsecondary educational expenses, but will not apply in the case of educational expenses that are funded by credit card advances, or real estate-secured loans. In addition, these amendments do not apply to Title IV loans, which are subject to separate disclosure rules issued by ED.
For more information
The Board's announcement, Federal Register notice, model disclosure forms and samples, as well as a report, "Consumer Research and Testing for Private Education Loans: Final Report of Findings," are available at www.federalreserve.gov/newsevents/press/bcreg/20090730a.htm. The amendments are effective 30 days after they are published in the Federal Register, which is expected shortly. Compliance is optional until six months after the date of publication in the Federal Register or February 14, 2010, whichever is earlier.
Visit TG Online at www.tgslc.org/policy/hea.cfm to download an integrated, searchable PDF version of the portions of the TILA that were affected by the HEOA.
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$200 million expansion of health care professionals' training, courtesy of ARRA
Last week, U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced the availability of $200 million to train approximately 8,000 students and credentialed health professionals by September 30, 2011. As noted in an HHS press release, the funds are part of the $500 million allotted to the HHS Health Resources and Services Administration (HRSA) to address workforce shortages under the American Recovery and Reinvestment Act (ARRA).
The $200 million will be directed to the following program areas:
- $80.2 million for scholarships, loans, and loan repayment awards to students, health professionals, and faculty. Of those funds, $39 million will be targeted to nurses and nurse faculty, $40 million to disadvantaged students in a wide range of health professions, and $1.2 million to health professions faculty from disadvantaged backgrounds.
- $50 million in grants to health professions training programs. Funds will be used to purchase equipment needed to expand programs and improve the quality of training.
- $47.6 million to support primary care training programs. These funds will support the training of residents, medical students, physician assistants, dentists and individuals, many of whom will practice in underserved areas.
- $10.5 million to strengthen the public health workforce. Funds will support public health traineeships and increase the number of individuals trained through preventive medicine and dental public health residencies.
- $10.2 million to increase the diversity of the health professions workforce.
- $1.5 million to support the efforts of state professional licensing boards in reducing barriers to telemedicine.
All funds will be awarded through a competitive process. Some will be announced over the next several months and others at a future date.
What about the other $300 million?
The remaining ARRA workforce funds apportioned to HRSA will expand scholarships and loan repayment for primary care providers who serve in health professional shortage areas through HRSA's National Health Service Corps.
More information
The HHS press release is available at www.hhs.gov/news/press/2009pres/07/20090728c.html.
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