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Navigating Student Loan Regulations: A Comprehensive Guide

Stay informed on legislative updates, compliance issues, and loan provisions for student loans like CCRAA and HEROES. Explore negotiated rulemaking processes and key decisions impacting loan programs. Learn about important topics such as loan forgiveness, deferments, and lender requirements. Keep up-to-date with the evolving landscape of student loans through this detailed guide.

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Navigating Student Loan Regulations: A Comprehensive Guide

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  1. Session 8 Student Loans Going Forward Gail McLarnon Dan Madzelan Office of Postsecondary Education

  2. Agenda • Legislative Update • Negotiated Rulemaking • Student Loans • General Provisions • Administrative Issues • Compliance Issues • Dear Colleague Letters

  3. Legislation

  4. Legislative Update • Higher Education Reconciliation Act of 2005 (P.L. 109-171) • Third Higher Education Extension Act of 2007 (P.L. 110-109) • “Sunshine” Legislation • H.R. 890, S. 486, S. 1262 • Senate Reauthorization Bill – S. 1642 • House Reauthorization Bill – H.R. 4137 • HEROES (P.L. 110-93) • College Cost Reduction and Access Act (P.L. 110-84)

  5. CCRAA — Benefits for Students • Lower Interest Rates • New Income Based Repayment • Expanded Loan Forgiveness • Revised Deferments: Economic Hardship Military Service • TEACH Grants

  6. CCRAA — Offsets • Lenders: • Exceptional Performer Status • Insurance • Loan Fees • Special Allowance Payments • Guaranty Agencies: • Collection Retention Allowance • Account Maintenance Fees • Origination Auction for PLUS (Parent)

  7. 2006-07 NegotiatedRulemaking

  8. 2006-2007 Negotiated Rulemaking • 2008-2009 & subsequent award years • Federal Register notice • Published on August 18, 2006 • Regional hearings • Berkeley, CA September 19 • Chicago, IL October 5 • Orlando, FL November 2 • Washington, DC November 9

  9. 2006-2007Negotiated Rulemaking • Four negotiating committees were established: • Accreditation • General Provisions • Academic Competitiveness & National SMART Grants • Loans

  10. Regulations Calendar - LOANS • NPRM: Published June 12, 2007 • Deadline for Comments: August 13, 2007 • 241 comments received • Final rules: November 1, 2007 • Effective date: July 1, 2008 with possible early implementation

  11. 2006-07 Negotiated Rulemaking • LOANS NPRM— • “No Consensus” on NPRM • NPRM Reflects What ED Heard and Internal Deliberations of Secretary’s Loan Task Force

  12. Negotiated Rulemaking – Loan Issues • Loans Committee Agenda • FFEL/DL Issues • ID Theft • Entrance Counseling for PLUS borrowers • Maximum Length of Loan Period

  13. Negotiated Rulemaking Loan Issues • Loans Committee Agenda • FFEL/DL Issues (cont.) • Frequency of Capitalization for Consolidation Loan Borrowers • Determination of Deferment Eligibility by One Loan Holder

  14. Negotiated Rulemaking – Loan Issues • Loans Committee Agenda (cont.) • FFEL Issues • Eligible Lender Trustee Relationships • Preferred Lender • Prohibited Inducements

  15. Negotiated Rulemaking Loan Issues • Loans Committee Agenda • FFEL/DL/Perkins Issues • Use of True & Exact Photocopy of a Death Certificate • Prospective Discharge for Total and Permanent Disability

  16. Negotiated Rulemaking – Loan Issues • Loans Committee Agenda • FFEL/Perkins Issues • Standardize NSLDS Reporting • Retention of Disbursement Records & Certification of E-signatures for Assigned MPNs

  17. Negotiated Rulemaking – Loan Issues • Loans Committee Agenda • Perkins Loan Issues • Clarify eligibility requirements for Child & Family Service Agency Cancellation • Define “reasonable” Collection Costs • Mandate Assignment of Defaulted Perkins Loans

  18. Negotiated Rulemaking General Provisions • Negotiating committee reached consensus • NPRM published August 8, 2007 reflected the consensus language agreed to by committee • 22 Public Comments were received by end of comment period on September 7, 2007 • Final rules: November 1, 2007 • Effective date: July 1, 2008 with possible early implementation

  19. Negotiated Rulemaking General Provisions • Loan Related Cash Management Provisions: • Recovery of Unclaimed Title IV Funds • Electronic Disbursements of Title IV Funds • Late, Late Disbursements

  20. Negotiated Rulemaking General Provisions • Loan Related Cash Management Provisions: • Minor Prior Year Charges • Loan Cancellation Notice & Affirmative Confirmation of a Loan • Excess Cash

  21. Negotiated Rulemaking General Provisions • Loan Related Provisions: • Minimum Period for Certifying a Loan • Treatment of Title IV Loan Funds if a Student Does Not Begin Attendance • Single Disbursement for Perkins Loans

  22. Alternative Loans • Alternative loans must be included as “estimated financial assistance” if: • Enrollment is a condition for the loan • Does not matter where loan proceeds are sent or whether school certified enrollment • May replace EFC • Think about it like an outside scholarship

  23. Web access to the National Student Loan Data System (NSLDS) was suspended for some Title IV student aid program participants on April 17 To ensure privacy is protected and that access to NSLDS is used only for authorized purposes Web search now requires SSN, Name, and DOB Ability for schools to add new users reinstated Guaranty agency web access reinstated Some lender web access reinstated State grant agency access reinstated Lender ELT access still on hold NSLDS Access

  24. Recent Letters & Announcements

  25. Dear Colleague Letter GEN-07-03 Consolidation Loan Process Issues Electronic Announcement FFEL Prohibited Inducement Guidance (9/14/2007) Secretary Spellings wrote to all institutions and lenders urging them to assure students and parents that we have their best interests at heart in providing competitive student loans Dear Colleague Letters & Electronic Announcements

  26. Contact Information We appreciate your feedback and comments. You can reach us at: Dan Madzelan • Phone: 202-502-7816 • Email: Dan.Madzelan@ed.gov • Fax: 202-502-7874 Gail McLarnon • Phone: 202-219-7048 • Email: Gail.McLarnon@ed.gov • Fax: 202-502-7874

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