May 29, 2008
Guidance Issued on Ensuring Continued Access to Student Loans Act of 2008
As highlighted in the May 7 Legislative Update, the Ensuring Continued Access to Student Loans Act of 2008 (H.R.5715) was recently passed.
Among other provisions, this legislation:
- Allows the government to purchase loan portfolios from lenders, thereby freeing up collateral to originate new loans.
- *Increases the current unsubsidized Stafford loan limits by $2,000 per year for undergraduate dependent students.
- *Increases the current unsubsidized Stafford loan limits by $2,000 for independent students for the first two years of undergraduate study.
- Expands eligibility for federal grant aid for low-income students.
- Allows Parent Loan borrowers to defer payments until six months after their dependent(s) cease to be enrolled at least half-time.
*Special Note: OGSLP’s guarantee system will be able to accept and process loan guarantee requests for the increased unsubsidized loan limits on May 30. Schools have the choice of transmitting loans under the current loan limits and submitting a supplemental loan for additional amounts once the system has been modified or holding impacted loans until May 30.
This Act, in addition to other helpful measures supported by the Federal Reserve and Treasury Department, is part of a multi-pronged effort to restore the necessary liquidity for lenders to continue to originate and fund new FFELP student loans.
For an at-a-glance summary of the new undergraduate, unsubsidized loan limits, check out OGSLP's Undergraduate Unsubsidized Loan Limit Chart.
Please note that our May 7 Legislative Update provided a summary of HR 5715 that incorrectly included the following two amendments, which did not make it into the Act: "Waive the origination fee for LLR loans" and "Delay Parent PLUS auctions until July 1, 2010." We apologize for any confusion this may have caused.