<p>what's in h.r. 5715 you might ask?? well, here is a summary according to <a href="http://www.nasfaa.org:%5B/url%5D">www.nasfaa.org:</a></p>
<p>H.R. 5715 Passed By Senate, Amendments Make Significant Changes To FSA Programs</p>
<p>H.R. 5715, a bill that seeks to help stave off potential access problems for borrowers of federal student loans, continues to build steam. The Senate approved H.R. 5715 utilizing a "unanimous consent" procedural motion yesterday afternoon. The Senate decision comes after the House overwhelmingly passed the bill last week and after pressure from the Bush Administration to move the legislation along quickly. The Senate did add some amendments, several of which make significant changes to the ACG and SMART Grant programs. The bill must once again be brought before the House for another vote before making it to the president’s desk. The House vote will occur today.</p>
<p>A comprehensive summary of the bill, including all amendments passed by the House and Senate, follows. Text of H.R. 5715, as passed by the House first, is available online. The Senate’s subsequent amendments are also available online.</p>
<p>Increase Annual and Aggregate Stafford Loan Limits</p>
<p>The bill would increase the following loan amounts for loans first disbursed on or after July 1, 2008:</p>
<pre><code>* Increases the additional unsubsidized Stafford annual limits by $2,000 for independent undergraduate students, and for dependent undergraduate students whose parents cannot borrow PLUS, but appears to reduce the additional unsubsidized limit for teacher certification to $6,000 for "undergraduate" students
Note - The original legislation also increased the additional unsubsidized Stafford annual limit for graduate and professional students by $2,000, but that provision was later eliminated by an amendment in the House
Increases unsubsidized Stafford limits for dependent students by introducing additional unsubsidized amounts of $2,000
Increases aggregate unsubsidized loan amounts for undergraduate dependent students from $23,000 to $31,000 (minus subsidized borrowing) but does not appear to extend additional unsubsidized funds for preparatory coursework or teacher certification for these students.
Increases aggregate unsubsidized loan amounts for undergraduate independent students from $46,000 to $57,500 (minus subsidized borrowing) .
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<p>Changes to ACG & SMART Grants</p>
<p>As amended by the Senate, the bill:</p>
<pre><code>* Directs all savings generated by the bill into the ACG and SMART Grant programs
Adds a fifth year to SMART Grant eligibility for programs that require five years
Allows students attending at least half time to qualify for ACG and SMART Grants and requires proration based on Pell Grant methodology for less than full-time attendance
Allows eligible non-citizens (e.g. permanent residents) to qualify for ACG and SMART Grants
Changes "academic year" to simply "year" for purposes of progression through grant levels, but did not include companion amendment recommended by NASFAA that would have allowed students who are classified as second year based solely on AP or IB coursework to be considered to have met the second year 3.0 GPA requirement
Allows students who are enrolled in an institution that offers a single baccalaureate-level liberal arts curriculum that permits no subject area major, but who are taking coursework in an area equivalent to a SMART-eligible major at other bachelor degree-granting institutions, to qualify for SMART Grant eligibility
Extends first-year ACG eligibility to students enrolled in at least a one-year certificate program and extends second-year ACG to students enrolled in at least a two-year certificate program. In both cases the certificate must be offered by a degree-granting institution
Appears to remove some of the Secretary’s authority to define "rigorous secondary school program of study," permitting only states to designate such programs. This amendment may further restrict what is currently considered a rigorous program
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<p>Grace Period and Deferment For Parent PLUS Borrowers</p>
<p>Beginning July 1, 2008, the bill would allow parents to choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly.</p>
<p>Special Provision for Parents Delinquent on Mortgage Payments</p>
<p>The bill would allow lenders to consider parents eligible for PLUS loans even if, during the period January 1, 2007, through December 31, 2009, the parents are or were:</p>
<pre><code>* No more than 180 days delinquent on a mortgage payment on their primary residence
No more than 180 days delinquent on any medical bill payments
No more than 89 days delinquency on the repayment of "any other debt"
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<p>LLR Provisions</p>
<p>The bill permits the Department of Education to designate an entire institution as eligible for lender of last resort (LLR) loans; the guaranty agency for the school’s state would be required to make loans to all of a designated institution’s otherwise eligible students and parents under the LLR program regardless of an individual borrower’s ability to obtain loans otherwise. This would be effective on the date the bill becomes law. The bill also specifies that the Secretary of Education shall determine whether institutions qualify to participate in lender of last resort (LLR). Institutions must meet a "minimum threshold" of students who are unable to obtain a conventional FFELP loan - determined by the Secretary - before qualifying for institution-wide LLR participation.</p>
<p>The bill would also prohibit lenders from offering any borrower benefits while operating under LLR. It also includes a termination date of June 30, 2009, for institutional-wide certification. On that date, schools would lose their LLR eligibility and students would once again need to qualify on a student-by-student basis for LLR loans.</p>
<p>Additionally the bill requires the Secretary of Education to do the following while operating under LLR provisions.</p>
<pre><code>* Disseminate information regarding availability of LLR loans
Provide Congress and the public with copies of new or revised agreements made between the Department and guarantors
Provide Congress and the public with quarterly reports on the number and amounts of loans originated or approved under LLR
Provide budget estimates of the costs of loans made under LLR compared to loans made in the Direct Loan program
Provide an annual report of all amounts and numbers of loans issued on LLR beginning on July 1, 2010
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<p>Department as a Secondary Market</p>
<p>The bill temporarily authorizes the Department to purchase FFEL loans originated on or after October 1, 2003, provided those purchases do not result in any cost to the federal government. The Department's authority to purchase loans under this provision expires on July 1, 2009.</p>
<p>The bill would stipulate that if the Department acts as a secondary market lender, it must ensure that any proceeds paid to a lender are used in a "manner consistent with ensuring continued participation of such lender in the Federal student loan programs." In other words, it would prohibit lenders from using those proceeds in any other way than ensuring they continue participating in FFELP.</p>
<p>It also specifies that forward purchasing agreements from the Department should be used "to ensure continued participation" in the FFEL Program. The bill allows lenders to continue servicing loans purchased by the Secretary as long as the cost does not exceed the cost the Department would otherwise incur for servicing those loans.</p>
<p>The price the Department pays is established by the Secretary of Education in consultation with the Secretary of Treasury based on what is in the best interest of the U.S. without cost to the federal government. The bill requires the Secretaries of Education and Treasury, as well as the Director of OMB, to post a notice in the Federal Register that establishes the terms and conditions governing loans purchased by the Department, including the methodologies used to determine purchase prices.</p>
<p>The bill also authorizes funding through the Direct Loan program general funding authority to carry out the secondary market provisions of the bill.</p>
<p>Prohibited Inducements</p>
<p>The bill bars guaranty agencies from using prohibited inducements to expand their loan volume while using lender of last resort. The prohibition would not permit a guaranty agency to advertise, market, or promote loans under LLR.</p>
<p>Suspension of Master Calendar and Negreg</p>
<p>The Department will be allowed to implement all the provisions of the bill with the exception of the changes made to the ACG and SMART Grant programs without conforming to the master calendar deadline dates and without negotiated rulemaking. Thus, the Department will be able to move quickly to prevent student loan disruptions, although it also means that the loan amendments can be implemented without input from the community. The ACG/SMART Grant program regulations will be subject to negotiated rulemaking.</p>
<p>Impact Study on College Costs</p>
<p>Requires the General Accountability Office (GAO) to conduct a study of the impact of raising loan limits on (1) tuition, fees, and room and board at institutions of higher education; and (2) private loan borrowing for attendance at institutions of higher education. The report would be due to the House and Senate education committees within one year after the bill becomes law.</p>
<p>Federal Coordination</p>
<p>The bill urges the Federal Financing Bank, the Federal Reserve, and other federal-chartered private entities such as the Federal Home Loan Banks to work with the Departments of Treasury and Education to ensure that students and families have access to federal student loans in the 2008-2009 academic year. </p>
<p>i am sure there will be comments regarding this important piece of legislation, so if anybody wants to chime in on this, please be free to do so.</p>
<p>oh and by the way, bush is gonna sign it into law next week.</p>