September 3, 2008

ED and Common Industry Forms Updated to Reflect Legislative Changes

Many commonly used forms have been revised to reflect new legislation or changes in higher education policy. A review of these updates follows.

Common Industry Forms

NCHELP has revised and added several forms, including the Federal Family Education Loan Program (FFELP) Default Aversion Assistance Request (DAAR) Form and the FFELP Claim Form. These forms include various legislative, regulatory and operational changes. The forms can be accessed on our School and Lender Publications and Forms Web page.

Note: These forms became available for use beginning July 1, 2008. OGSLP will continue to accept either version of the forms. However, we strongly encourage our customers to update internal processes to accommodate the new and revised forms.

A brief summary of the form changes is provided below:

• FFELP Default Aversion Assistance Request (DAAR) Form
• Added the new post-active duty deferment type, "MR," and associated instructions to the list of available deferments and forbearances.
  
• FFELP Claim Form
• Added the new Identity Theft claim type code, "ID," and associated changes to the filing instructions. Modifies the definitions and instructions for the Ineligible Borrower claim type code.
• Modified the definitions and associated instructions for the Ineligible Borrower (IN) claim type to include the responsible party and the documentation requirements for fraud convictions.
  
• FFELP Ineligible Borrower and Identity Theft Addendum
• A new form, submitted in addition to the FFELP Claim Form, which provides the additional information necessary to request claim reimbursement for Ineligible Borrower (IN) or Identity Theft (ID) claims.

Economic Hardship Deferment Request Form

Although the current Economic Hardship Deferment (HRD) Request form does not reflect the 2008 poverty guidelines and the July 24, 2008 minimum wage increase, lenders should continue to use the form. The following information can supplement until a new form has been published.

• 2008 Department of Health and Human Services Poverty Guidelines
  The chart below reflects 150 percent of the poverty line as applicable to the borrower's actual family size.
  
  

  Borrower’s Family Size	48 Contiguous States and District of Columbia*	Alaska*	Hawaii*
  1	$1,300.00	$1,625.00	$1,495.00
  2	$1,750.00	$2,187.50	$2,012.50
  3	$2,200.00	$2,750.00	$2,530.00
  4	$2,650.00	$3,312.50	$3,047.50
  For each additional person, add:	$450.00	$562.50	$517.50

  * Monthly figures represent 150 percent of the poverty line

• Federal Minimum Wage Increase - The U.S. Troops Readiness, Veterans' Care, Katrina Recovery and Iraq Accountability Appropriations Act 2007 (Public Law 110-28)  amended the Fair Labor Standards Act by increasing the federal minimum wage from $5.15 an hour in three steps, as follows:
• $5.85 per hour, effective July 24, 2007
• $6.55 per hour, effective July 24, 2008
• $7.25 per hour, effective July 24, 2009

Effective July 24, 2008, the minimum wage increased to $6.55 per hour. This increased minimum wage amount should be used for both the Economic Hardship (HRD) and Working Mother (PLWM) Deferment Request forms.

Master Promissory Note (MPN), Addenda and Plain Language Disclosure (PLD)

The NCHELP Regulations Committee is in the process of reviewing MPNs, addenda and PLDs for required updates to reflect the reauthorization changes. Until new forms are published, schools and lenders may continue to use the current forms.

If you have questions about changes to these forms, please contact OGSLP’s Policy, Compliance and Training department at 405.234.4432 or pct@ogslp.org.