Sallie Mae 2010 Annual Report Download - page 209

Major changes made by the CCRAA, which were effective October 1, 2007 (unless stated otherwise),
include:
• Reduces Special Allowance Payments to for-profit lenders and not-for-profit lenders for both Stafford
and Consolidation Loans disbursed on or after October 1, 2007 by 0.55 percentage points and
0.40 percentage points, respectively;
• Reduces Special Allowance Payments to for-profit lenders and not-for-profit lenders for PLUS Loans
disbursed on or after October 1, 2007 by 0.85 percentage points and 0.70 percentage points,
respectively;
• Reduces fixed interest rates on subsidized Stafford Loans to undergraduates from the current 6.8% to
6.0% for loans disbursed beginning July 1, 2008, to 5.6% for loans disbursed beginning July 1, 2009,
to 4.5% for loans disbursed beginning July 1, 2010, and to 3.4% for loans disbursed beginning July 1,
2011 through 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 DSLP borrowers, and FFELP borrowers that consolidate in the DSLP,
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 and 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.
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