On June 3, 2011, ED provided an announcement that outlines the variable interest rates for older FFELP Stafford and PLUS loans. Below is a summary of the current variable interest rates and those that will be effective beginning July 1, 2011, through June 30, 2012.
Variable rates for loans first disbursed on or after July 1, 1998, and before July 1, 2006
Stafford and PLUS loans first disbursed on or after July 1, 1998, and before July 1, 2006, have variable rates that reset annually on July 1, based on the last 91-day T-bill auction in May. The new variable rates for these loans can be seen in the far right-hand column in the chart below:
|Loan type||Loan status||Effective July 1, 2010, to June 30, 2011||Effective July 1, 2011, to June 30, 2012|
|Stafford loans (subsidized and unsubsidized)||Repayment or forbearance||2.47%||2.36%|
|In-school, grace, or deferment||1.87%||1.76%|
|PLUS loans (parent or student)||All statuses||3.27%||3.16%|
More rates to come
Some older PLUS and Supplemental Loan for Students (SLS) loans have variable interest rates based on the weekly average of the one-year constant maturity Treasury yield for the last calendar week ending on or before June 26. As a result, new rates on such loans won't be available until late June.
Another interest rate not expected until late June is the one applicable to the Health Education Assistance Loan (HEAL) portion of federal Consolidation loans, which is based on the average of the bond equivalent rates of the 91-day T-bills auctioned for the quarter ending June 30.
ED's announcement on the new interest rates is available online and may be viewed to obtain additional rates not listed the chart provided. For questions about the interest rate changes, contact TG email@example.com.
On June 6, 2011, ED provided an electronic announcement indicating that it has fully transitioned TPD discharge servicing to Nelnet. The TPD servicing includes processes and services for all TPD discharge assignments and referrals for veterans and non-veterans on behalf of ED.
Additionally, the announcement reminds schools that the contact information on the specific TPD Web pages for schools and loan holders, and for borrowers have been updated and can be accessed by clicking on the applicable hyperlink below:
While the contact information is different on each page, the structure for each page is very similar. First, the title of each Web page is: Total and Permanent Disability Discharge and Veterans Disability Discharge. The page itself is divided into two sections: the first section provides general TPD discharge information, and the second section provides information that focuses on Veterans Disability Discharge. Each section includes the appropriate contact information depending upon whether the discharge is for a veteran or nonveteran.
Processing relief for borrowers
ED recently provided guidance regarding FFELP borrowers seeking a TPD discharge. The new guidance permits a guarantor to accept and process a photocopy of a TPD discharge application without requiring the borrower to provide an original signature on that photocopy. This change should provide some flexibility and relief for borrowers as they complete the application process.
For more information
For questions about total and permanent disability discharge, contact TG customer assistance at (800) 845-6267, or send an email message to firstname.lastname@example.org.
In an electronic announcement published on June 6, 2011, ED provided guidance regarding SAP reviews for students in clock-hour programs. This information will be helpful for some schools as they finalize implementation of the new SAP requirements effective July 1, 2011.
In Shoptalk Edition 580, TG summarized SAP final rules published on October 29, 2010. Those rules clarify, standardize, and strengthen provisions on school evaluations of the qualitative and quantitative aspects of a student's progress in a program for Title IV funding purposes.
ED's new guidance provides greater flexibility as to when a school may evaluate SAP for students enrolled in a clock-hour program. Within the limits of a school's maximum timeframe for program completion, a school may choose to evaluate SAP for all students in a program at one of the following points in time:
The option selected by the school for all students in a program must be specified in the school's SAP policy requirements for that program.
As a reminder, the school must determine that a student has successfully completed both the clock hours and weeks of instructional time required for a payment period before providing the student with Title IV funds for the next payment period.
To learn more
For more information about SAP final rules, visit TG's Program Integrity Final Rules Web page. In addition to a one-page summary of the new SAP requirements and a more detailed Shoptalk article, the page provides a checklist of federal requirements and options for schools, and a flowchart illustrating how to proceed when a student fails to meet SAP requirements.
You can also contact TG's customer assistance team at (800) 845-6267, or send an email message to email@example.com.
On June 2, 2011, ED released a prepublication final rule document on the gainful employment (GE) program debt measures. The published version of the final rule in now available in the Federal Register dated June 13, 2011. These new regulations on program metrics for student debt levels and repayment success become effective on July 1, 2012.
In addition, visit TG's Program Integrity Web page to access the following "TG Tools" to assist schools as they begin studying the final rules:
Informational rates to be provided
As noted in TG's GE Implementation Time Frames chart above, the final rule provides that for the debt measures calculated for fiscal year (FY) 2011, ED will provide a school with the debt-to-earnings ratios and the loan repayment rate for each GE program offered by the school for informational purposes (only). The informational rates will include borrowers who entered repayment or completed programs during FY 2007 and FY 2008 for the loan repayment rate or debt-to-earnings ratios, respectively. The informational rates are intended to help schools initially evaluate the performance of a program with respect to the GE debt measures.
To learn more
See TG's special edition of Shoptalk on this topic published on June 8, 2011.
Check ED's Gainful Employment Information Page for updates that provide the latest guidance on implementation of the GE rules on disclosures, reporting, new programs, and debt measures for programs.
The following table provides a list of newly reported school closures and corrections from the Postsecondary Educational Participants System (PEPS) and from the June 2011 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.
Newly reported closures
|OPE School ID||School Name and Address||Unofficial Closure Date||ED's Official Closure Date|
|00363405||Texas State Technical College-Palacios
100 Marine Center Dr.
Palacios, TX 77465-9599