March 5, 2009
ED Releases Invitation for Lenders to Participate in PLUS Loan Auction Pilot Program
Although a number of school associations, including OASFAA, have expressed concerns about the PLUS Loan Auction Pilot Program to members of Congress, the Department of Education (ED) released a March 2 Federal Register notice inviting lenders to participate in the program. FFELP lenders that wish to bid in the auction or serve as a PLUS lender of last resort must submit required prequalification information to the Secretary by April 1. Actual bids for origination rights must be submitted on the date of the auction, which is scheduled for April 15.
The Secretary will choose two lenders per state, who will have the exclusive right to make PLUS loans to new PLUS borrowers in that state for a two-year period beginning July 1, 2009. Parents currently borrowing on behalf of a dependent student enrolled prior to July 1, 2009 may continue with their current lender or secure a loan from another eligible FFELP lender.
OGSLP recognizes the impact and challenges of implementing this program, particularly late in the financial award cycle. We’ll keep you informed as additional information is provided. If you have immediate questions about the statutory provisions related to the Competitive PLUS Loan Auction Pilot Program, contact OGSLP’s Policy, Compliance, and Training department at 405.234.4432 or firstname.lastname@example.org.