Below is a brief summary of some of the important changes to the FFEL program that are effective on July 1, 2009.

A. Per Final Rules published October 23, 2008

Economic Hardship Deferment - §682.210
The 20/220 debt-to-income ratio for a borrower working full time and the corresponding debt-to-income ratio criterion for a borrower who is working less than full time is eliminated.

Income Based Repayment Plan - §682.215
Stafford, Grad PLUS, and Consolidation loan borrowers who demonstrate a partial financial hardship will be able to request their loans be paid through Income Based Repayment as long as their loans are not in default.

B. Per the Higher Education Opportunity Act (HEOA) of 2008

Lender Disclosures – Final regulations will be published by November 1, 2009.
Revised and expanded disclosure requirements are due at the time of, or prior to loan disbursement and during the loan repayment period.

C. Per the College Cost Reduction and Access Act (CCRA) of 2007

Undergraduate Subsidized Stafford Loan Interest Rates - §682.202(a)
For undergraduate subsidized Stafford loans first disbursed July 1, 2009 – June 30, 2010 the fixed interest rate will decrease from 6.0% to 5.6%.

D. Per the Higher Education Reconciliation Act (HERA) of 2005

Origination Fees - §682.202(c)
For Stafford Loans first disbursed on or after July 1, 2009 - June 30, 2010 a lender may charge a borrower an origination fee not to exceed 0.5% of the principal amount of the loan.

Direct questions regarding this guidance to the Office of Regulatory Compliance at 1-518-473-3986; toll free at 1-866-431-HESC (1-866-431-4372), press 6; or via email at askpolicy@hesc.org.

Date Posted:6/8/09