August 4, 2010

Double-Check Your July 1, 2010 Changes

Many changes to Title IV regulations became effective July 1, 2010. Now is a good time to make sure you haven't missed anything. Here’s a list of some loan-related items to get you started:

Part 674: Perkins Loan Program

674.51, 674.61 – Changes the Total and Permanent Disability Discharge provision.
674.12 – Provides new annual and aggregate loan limits ($5,500 per year for undergraduate students and $8,000 per year for graduate students, with aggregate limits of $27,500 for undergraduate loans and $60,000 for combined undergraduate and graduate loans).
674.33 – Eliminates the requirement that a borrower make a “written” request to obtain a forbearance on a Perkins Loan. Requires the institution to confirm the terms of the forbearance by notice to the borrower and record the terms in the borrower's file.
674.39 – Reduces the number of consecutive on-time payments required to rehabilitate a Perkins Loan from 12 to nine.
674.42 – Includes information required in exit counseling on prepayment, the effects of loan consolidation, the use of the MPN and tax benefits.
674.56 – Expands loan cancellation to include firefighters, certain librarians, faculty members of tribal colleges and universities, certain speech pathologists, certain attorneys and individuals employed in organizations that provide early childhood education services.

Parts 682 and 685: FFELP and Direct Loans

682.201, 682.402 and 685.213 – Changes the Total and Permanent Disability Discharge provision.
682.200 and 685.202 – Adds the applicability of the Servicemembers Civil Relief Act (50 U.S.C. 527, App. sec.207).
682.210 and 685.204 – Adds in-school deferment provisions for PLUS borrowers.
682.405 and 685.211 – Allows for a one-time occurrence of rehabilitation of any defaulted Direct Loan rehabilitated on or after August 14, 2008.
682.216 and 685.217 – Expands teacher loan forgiveness service requirements.
682.604 and 685.304 – Adds new entrance and exit counseling requirements.