Department of Education posted this on Friday to provide a high level description of several provisions of the Health Care and Education Reconciliation Act of 2010:
- Pell Grant eligibility expanded by increasing maximum EFC: "The HCERA increases the maximum Expected Family Contribution (EFC) for Pell Grant eligibility for the 2010-2011 Award Year to 5273. Note that the 2010-2011 Pell Grant Payment and Disbursement Schedules published on January 13, 2010, (see DCL P-10-01) established 4617 as the maximum EFC for Pell Grant eligibility. We expect to post to our IFAP Web Site revised 2010-2011 Pell Grant Payment and Disbursement Schedules sometime next week. Until then, institutions may wish to defer packaging students until the revised schedules are available."
- Formalizes the end of student loan originations under the FFEL program: "The HCERA provides that, after June 30, 2010, no new student loans will be made under the Federal Family Education Loan (FFEL) Program. Therefore, beginning July 1, 2010, all new subsidized and unsubsidized Stafford Loans made to students, PLUS loans made to parents and to graduate/professional students, and consolidation loans made to borrowers, can only be made under the William D. Ford Federal Direct Loan (Direct Loan) Program. The Federal Perkins Loan Program is not affected by the HCERA.
- Describes scenario where FFEL lender would be disbursing loans after June 30th: "It is important to note that if the first disbursement of a FFEL loan was made by the lender on or before June 30, 2010, the second and any subsequent disbursements of that loan, even if the subsequent disbursement(s) will be made after June 30, 2010, must be made by the FFEL lender. FFEL lenders that make a first disbursement are obligated to make the subsequent disbursement(s) as provided in the loan certification provided by the institution. This is a longstanding regulatory requirement...It would be prudent for institutions to confirm with those FFEL lenders who have made loans to their students in the past whether those lenders will make first disbursements for loans that the institution may certify for enrollment periods that begin prior to July 1, 2010 but may have a subsequent disbursement date(s) after June 30, 2010."
Sallie Mae will be hosting a webinar this Wednesday to discuss implementation of this new law. Here are the details:
We will discuss how Sallie Mae will handle loan applications already in the pipeline as well as loans with disbursement dates before and after July 1, 2010. This event is designed to arm you with the information you need to avoid unnecessary disruption as you work to implement the requirements of this new law."