April 6, 2010

ED Issues Reconciliation Bill DCL

On April 2, 2010, ED published a Dear Colleague Letter (GEN-10-05) that contains a high-level description of two financial aid-related issues contained in the Health Care and Education Reconciliation Act of 2010 (HCERA).

Pell Grants

The letter explains how the legislation provides for more stable and predictable funding for the Federal Pell Grant Program. In addition, beginning with the 2010-2011 award year, the Pell award calculation is changed by raising the expected family contribution for eligibility to $5,273.

Federal Student Loans

Also discussed in the letter is the HCERA provision that eliminates new loans in the Federal Family Education Loan Program (FFELP). This means that all new loans beginning July 1, 2010 will be made under the William D. Ford Federal Direct Loan Program. If a first disbursement of a FFELP loan is made before July 1, 2010, FFELP lenders are obligated to make subsequent disbursements that may occur after June 30, 2010.

You can view the full text of the Dear Colleague Letter along with other important HCERA documents and announcements on our HCERA Legislation page as they become available.