HESC Colleague NewsletterSummer 2009  

Top 4 FFEL Changes Effective on or After July 1, 2009

Piper Lutbak

Below is a brief summary of the top four legislative and regulatory issues that become effective on or after July 1, 2009:

  1. Reduced Origination Fees
    The origination fee for Stafford loans first disbursed on or after July 1, 2009 through June 30, 2010 is reduced from 1.0% to 0.5%.
  2. Decreased Interest Rates for Subsidized Stafford Loans to Undergraduate Students
    The interest rate for subsidized loans disbursed to undergraduate students on or after July 1, 2009 through June 30, 2010 is decreased from 6.0% to 5.6%.
  3. Income Based Repayment (IBR) Plan
    As of July 1, 2009, 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. For borrowers who make 300 eligible payments after 25 years, the remaining balance on their loan will be forgiven.
  4. Two Pell Grant Scheduled Awards in an Award Year
    As of July 1, 2009, students enrolled in a certificate, associate, or baccalaureate program may receive up to two Pell Grants in one award year to accelerate their progress.