Sallie Mae 2010 Annual Report Download - page 210

• 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
for the lender’s continued FFELP participations and making of FFELP Loans. Authorizes the Secretary
to contract for the servicing of purchased FFELP Loans, including with selling lenders, as long as the
cost is not more than it would be otherwise.
The Higher Education Opportunity Act of 2008 (HEOA 2008) reauthorized the loan programs of the
HEA through September 30, 2014. Major provisions, which became effective August 14, 2008 (unless stated
otherwise), include:
• Clarifies the repayment period and the terms for commencement of repayment of PLUS Loans made
on or after July 1, 2008, (superseding ECASLA provisions) and makes available in-school deferment to
parent borrowers when the student beneficiary is enrolled and a 6-month post-enrollment deferment to
all PLUS borrowers following any period of enrollment of the borrower or the student beneficiary.
• Makes Section 207 of the Servicemembers Civil Relief Act applicable to FFELP Loans, upon borrower
request, reducing the interest rate on such loans to 6% (which encompasses certain fees and other
charges), and establishes that as the applicable rate for calculating Special Allowance Payments (for
loans made on or after July 1, 2008).
• Expands the criteria for disability discharge, including qualifying borrowers with a permanent disability
rating from the Veterans Administration.
• Requires a lender to provide information on the impact of interest capitalization when granting
deferment on for an unsubsidized Stafford Loan or forbearance for any FFELP loan and, for
forbearance, to provide the borrower with specific information about interest and capitalization at least
every 180 days during the forbearance.
• Adds items that the lender must disclose before disbursement and items that the lender must disclose
before repayment.
• Requires a lender to provide a bill or statement that corresponds to each payment installment time
period and include specific disclosures (for loans with a first payment due on or after July 1, 2009).
• Requires a lender to provide specified information to borrowers who notify the lender of difficulty in
paying (for loans with a first payment due on or after July 1, 2009) and to borrowers who become
60 days delinquent (for loans that become delinquent on or after July 1, 2009).
• Eliminates Guarantor and ED obligations for insurance and reinsurance in instances of nondisclosure.
• Adds income-based repayment to plans the lender must offer (except for parent PLUS Loans and
Consolidation Loans that discharged such loans) and adds income-based repayment for FFELP
borrowers to repay defaulted loans to ED.
• Permits borrower eligibility for in-school deferment to be based on National Student Loan Data System
information.
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