Sallie Mae 2008 Annual Report Download - page 222

2011 and June 30, 2012. Absent any other legislative changes, the rates would revert to 6.8% for loans
disbursed on or after July 1, 2012;
• Increases the lender loan fees on all loan types, from 0.5 percent to 1.0 percent;
• Reduces default insurance to 95 percent of the unpaid principal and accrued interest for loans first
disbursed on or after October 1, 2012;
• Eliminates Exceptional Performer designation (and the monetary benefit associated with it) effective
October 1, 2007.
• Reduces default collections retention by guaranty agencies from 23 percent to 16 percent.
• Reduces the guaranty agency account maintenance fee from 0.10 percent to 0.06 percent.
• Requires ED to develop and implement a pilot auction for participation in the FFELP Parent PLUS
loan program, by state, effective July 1, 2009.
• Provides loan forgiveness for all FDLP borrowers, and FFELP borrowers that consolidate in the FDLP,
in certain public service jobs who make 120 monthly payments.
• Expands the deferment authority for borrowers due to an economic hardship and military service.
• Establishes a new income-based repayment program starting July 1, 2009 for all loans except for parent
PLUS loans or Consolidation loans that discharged such loans which includes the potential for loan
forgiveness after 25 years.
The ECASLA provisions, which were effective May 5, 2008 (unless stated otherwise), include:
• Increases Unsubsidized Stafford loan limits for undergraduate students for loans first disbursed on or
after July 1, 2008 —
• by $2,000 for the annual limit
• and to $31,000 and $57,500 as the aggregate limits for dependent students and independent students
respectively.
• Requires, effective for loans first disbursed on or after July 1, 2008, that repayment of a parent PLUS
loan begin no later than 60 days after the final disbursement with interest accrued prior to the
beginning of repayment added to the loan principal, or the day after 6 months from the date the
dependent student is no longer enrolled at least half time, in which case interest accrued prior to the
beginning of repayment may be paid monthly or quarterly, or capitalized no more frequently than
quarterly, if agreed by the borrower and lender.
• Removes specification that the repayment period of a PLUS loan begins on the date of the final
disbursement and excludes deferment and forbearance periods for loans first disbursed on or after
July 1, 2008.
• Allows extenuating circumstances for credit requirement purposes for a PLUS loan if the applicant is
up to 180 days delinquent on mortgage or medical bill payments or not more than 89 days delinquent
on any other debt during the period January 1, 2007, through December 31, 2009.
• Broadens lender of last resort (LLR) provisions so they include subsidized and unsubsidized Stafford
loans and PLUS loans, prohibits LLR loans with terms and conditions more favorable than those for
non-LLR loans, and subjects lenders and guarantors serving as LLRs to prohibitions on inducements
and to prohibitions regarding advertising, marketing or promoting LLR loans.
• Gives the Secretary authority until July 1, 2009 (subsequently extended to July 1, 2010 by Public Law
110-350 enacted October 7, 2008), if there is inadequate loan capital, to purchase or enter into forward
purchase commitments for Stafford and PLUS loans first disbursed on or after October 1, 2003 and
before July 1, 2009, and makes funds available. Any purchase must be without a net cost to the federal
government (including the cost of servicing purchased loans), and funds paid to a lender must be used
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