Introduction to FFELP

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Introduction to FFELP

• 2007 NCHELP Fall Training Conference

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Presenters

• Mike Hawkes ECMC
• Marnie Grodman New Jersey Higher Education
  Student Assistance Authority
• Laura Kowalski Texas Guaranteed
• Eric Cronkright College Assist
• Allison Magill EdFinancial Services
• Jennifer DiGiacomo Missouri Higher Education
  Loan Authority

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What You Will Learn

• The Law
• The Regulations (Federal Registers)
• Dear Colleague Letters Private Letters
• Industry Guidance Common Manual
• e-Library Resources

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The Hierarchy of Guidance
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The Law

• Marnie Grodman
• Assistant Director, Legal Government Affairs
• New Jersey Higher Education Student Assistance
  Authority

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The Hierarchy of Guidance
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How a Bill Becomes a Law

• Bills may be introduced by any Member of Congress
• Bills are assigned a number in the order they are
  introduced
• House of Representatives H.R.
• Senate S

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How a Bill Becomes a Law

• To become law
• Proposal must be approved in identical form by
  both the House and the Senate
• Proposal must then be signed by the President

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Two Types of Bills

• Authorization Bills establish or continue
  government programs or policies and set limits on
  how much money may be spent on them
• Appropriation Bills provides actual funds to
  carry out authorized program or policies, or
  provides funds to operate the government

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Committee Action

• After a Member of Congress introduces bill, it is
  referred to committee or subcommittee of
  jurisdiction
• Generally hearings are held
• Committee Mark-up committee members meet to
  consider the bill in detail
• Bill reported to House or Senate
• Bill goes to the floor for vote majority rules

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Action in Second Chamber

• Bill passed by one chamber sent to the other
• Process begins again sent to committee,
  hearings, mark-up, vote and committee report
• Floor vote
• Most likely the bill will be different from the
  first chamber version

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Conference Action

• Conference Action
• Conference Report explains changes that were
  made
• Presidents Role
• Sign it
• Veto it Congress may override with two-thirds
  majority vote in both chambers
• No action-bill becomes law without signature in
  10 days provided Congress has not adjourned for
  the year

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HEA Reauthorization

• Primary law for the Federal Family Education Loan
  Program is the Higher Education Act (HEA)
• Reauthorization is required each 5-7 years
• Most recent reauthorization October 7, 1998
• 10 short-term extensions since then

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HEA Reauthorization So What Happened?

• Other top national issues, like the war on
  terror, national security and hurricane relief
  and recovery took priority.

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HEA Reauthorization How Does HERA Fit In?

• Deficit Reduction Act (DRA) signed into law
  February 8, 2006.
• Title VIII of the DRA contains the Higher
  Education Reconciliation Act of 2005 (HERA).
• HERA addresses a number of budget-related higher
  education issues contained in the House and
  Senate reauthorization bills.

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HEA Reauthorization What Now?

• HEA extended until October 31, 2007
• S1868 approved by the Senate on July 24, 2007 and
  approved by the House on July 25, 2007

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College Cost Reduction and Access Act

• Signed into law September 27, 2007
• Makes amendments to the Higher Education Act
• Result of budget reconciliation process much like
  HERA

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Examples of how CCRAA Affects FFELP

• Reduces collection costs
• Reduces Special Allowances
• Eliminates Exceptional Performer
• Increases lender fees
• Reduces lender insurance
• Creates auction program for PLUS

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Questions?
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Federal Registers Regulations

• Laura Kowalski
• Assistant Manager, Policy Regulatory Affairs
• TG

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The Hierarchy of Guidance
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What is the Federal Register?

• Medium for notifying the public of official
  agency actions
• Forms
• Notice of Proposed Rule (NPRM)
• Final Rule

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Identifying an NPRM
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NPRM Elements

• Preamble
• List of regulations discussed in NPRM what
  (1)
• Brief summary statement why (2)
• Public comment deadline when (3)
• Address to send comments who (4)

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NPRM Elements

• Preamble
• Further information contact (5)
• Supplementary information (6)
• Detail
• Rationale

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• 11. Section 682.200(b) is amended by
• A. Amending the definition of Lender
• by revising paragraph (5) and adding
• paragraph (7).
• B. Adding a definition of School-affiliated
  organization.
• The revisions and additions read as
• follows
• 682.200 Definitions.
• (b)
• School-affiliated organization. A
• school-affiliated organization is any
• organization that is directly or indirectly
• related to a school and includes, but is
• not limited to, alumni organizations,
• foundations, athletic organizations, and
• social, academic, and professional
• organizations.

• Proposed regulatory language
• Provides instructions for regulatory change

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Identifying a Final Rule
DEPARTMENT OF EDUCATION 34 CFR Parts 674, 682 and
685 RIN 1840AC88 Federal Perkins Loan Program,
Federal Family Education Loan Program, and
William D. Ford Federal Direct Loan
Program AGENCY Office of Postsecondary Education,
Department of Education. ACTION Final
regulations.
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Final Rule Elements

• Preamble
• Supplementary information
• Regulatory language

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Final Rule Elements

• Preamble
• List of all parts changed (1)
• Brief summary of changes (2)
• Effective date (3)
• Typically the following July 1st
• May have several dates
• Individual to contact for further info (4)
• Supplementary information (5)

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Final Rule Elements

• Supplementary information
• Background
• Historical discussion of processNPRM through
  final
• Substantive revisions
• Optional section identifying final regulations
  which are significantly different from those
  proposed

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Final Rule Elements

• Supplementary information
• Analysis of comments and changes (6)
• Summarizes comments received
• Discussion EDs agreement or disagreement
• Change, if any, from the proposed rule

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682.407 Discharge of student loan indebtedness
for survivors of victims of the September 11,
2001, attacks. (a) (4) Died due
to injuries suffered in the terrorist attacks on
September 11, 2001 means the individual was
present at the World Trade Center in New York
City, New York, at the Pentagon in Virginia, or
at the Shanksville, Pennsylvania site at the time
of or in the immediate aftermath of the
terrorist-related aircraft crashes on September
11, 2001, and the individual died as a direct
result of these crashes.

• Regulatory
• language
• Showing only changes

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Final Rule

• Final Rule published in Federal Register
• New regulations become effective
• Master Calendar
• Early Implementation
• Trigger Events

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Final Rules

• Master Calendar
• Effective dates specified in statute
• General effective date (e.g. October 1)
• Early Implementation
• Some provisions are effective immediately (i.e.,
  self-implementing)

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Final Rules

• Trigger Events
• Specific effective dates for certain items
• Examples
• Date of enactment
• Loans certified on or after
• Loans disbursed on or after

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Identifying an Interim Final Rule
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Reading a Regulation
34 CFR Part 682 Section .201
Subsection (d) Paragraph (1)
Subparagraph (i)
Division (A)
Clause (1)
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Reading a Regulation

• 34 CFR 682.201(d)(1)(i)(A)(1)
• An individual is eligible to receive a
  Consolidation loan if the borrower is in a grace
  period preceding repayment
• Read all lead-ins!

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Resources

• NCHELP Topical Index
• e-Library on NCHELP web site http//www.nchelp.or
  g/elibrary/index.cfm?parent33prior1,1
• Updated annually
• Federal Register
• Date of register
• Page number

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Resources

• 682.204 Maximum loan limits
• (l) In determining a Stafford loan amount
• in accordance with 682.204 (a), (c) and
• (d), the school must use the definition of
• academic year in 34 CFR 668.3.
• 59 FR 33350, June 28, 1994, as amended at 64
• FR 18976, Apr. 16, 1999 64 FR 58954, Nov. 1,
• 1999 66 FR 34763, June 29, 2001 67 FR 67078,
• Nov. 1, 2002

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Questions?
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Dear Colleague Private Letters

• Eric Cronkright
• Manager, Compliance and Program Review
• College Assist

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The Hierarchy of Guidance
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DCL Organization

• ANN - Announcements from FSA
• CB - Campus-Based
• FP - Financial Partner (began 2004)
• Formerly G (Guarantor)
• Formerly L (Lender)
• GEN - General Distribution
• P - Pell Grant

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Dear Partner/Colleague Letters

• Represents formal policy guidance from ED
• Interim Consolidation reinsurance (FP-04-06)
• Explanation new TPD procedures (GEN-02-03)
• Clarification - eligibility for consolidation
  (FP-04-05)
• Regulatory Relief - disaster assistance
  (GEN-04-04)
• Changes - consolidation loan application
  (GEN-03-13)
• Information - 2004-2005 FSA COACH (ANN-04-09)

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Dear Colleague Numbering

• GEN-07-07
• General Distribution Sequence
• Year Issue
• Sequential numbering starts at 1
• Beginning each calendar year
• DCLs found at
• www.ifap.ed.gov or www.nchelp.org

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Private Letters

• Similar to DCLs
• Answers to specific questions from
• NCHELP
• Agencies
• Individuals

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Private Letters

• Can be used by all
• Typically not widely or mass distributed
• Common Manual guidance may be based on a private
  letter

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Questions?
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Industry Guidance- Common Manual

• Allison Magill
• Compliance Analyst
• EdFinancial Services

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The Hierarchy of Guidance
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Common Manual

• Available in print and CD through Guaranty
  Agencies
• Servicer and Guaranty Agency websites
• NCHELP e-Library
• Has its own website at www.commonmanual.org

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Common Manual
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NCHELP e-Library

• Electronic Common Manual
• Latest version of the Electronic Common Manual
  (ECM)
• Mirrors printed version
• Integrated Common Manual (ICM)
• Most up-to-date policy information available
• Updated monthly with policies approved by the
  Governing Board the previous month
• Tips for Using Electronic Versions of the CM

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NCHELP e-Library

• Common Manual Archives
• Electronic versions as they appeared in print
  from 1997 through today
• Replacement Pages
• Replacement pages for the Common Manual since the
  most recent printing
• Reflect changes in policies that do not appear in
  the latest printed version of the manual

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NCHELP e-Library

• Training Briefs
• Developed by the CM Policy Committee
• Assist users in understanding how the CM is
  managed and updated
• How to access CM information
• How to participate in the policy development
  process

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NCHELP e-Library

• Bulletin Language
• CM language adopted by the Governing Board that
  does not appear in the last printed version of
  the manual
• Depending on the timing it could and will be
  included in the integrated version
• Changes are organized by policy proposal batch
  number

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Integrated Common Manual

• Important Things to Remember
• Most current version of the manual
• Updated monthly shortly after the new policy
  changes are approved by the Common Manual
  Governing Board

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Integrated Common Manual

• The Summary of Changes Approved chart at the
  front of the manual
• Describes changes since the last annual
  publication of the manual.
• Gives the effective date and trigger events for
  policy changes.
• Links directly to each revised section/subsection
  of the manual.

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Integrated Common Manual

• Features
• Change bars in the margins of affected pages
  indicate revisions.
• Running headers at the top of each page list
  section numbers and titles.
• "Bookmarks" in the left-hand margin mirror the
  manual's table of contents and provide links to
  the manual's sections/subsections.

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Integrated Common Manual

• Features
• Each chapter's table of contents links to its
  sections/subsections.
• Key words in the manual's text link to glossary
  definitions.
• The PDF format of the ICM allows the user to
  search the ICM electronically.

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Integrated Common Manual

• Features
• Newly approved language is identified with
  underlines.
• Recently deleted language is identified with
  strikeouts.
• Footnotes on each affected page contain
• The date the Governing Board approved the change.
• The policy proposal and batch numbers applicable
  to the change

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Search

• Use to find a specific term
• Click on icon
• Type word
• Click search
• Search will begin on the page you are currently
  viewing in document

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Links

• Takes you to related text without searching or
  browsing
• Found
• Chapter Titles (A)
• Index (B)
• Green Links - more information/reference (C)
• Blue Links - glossary definitions (D)

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C
A
D
B
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682.604(f)(1)
(f) Initial counseling. (1) A school must ensure
that initial counseling is conducted with each
Stafford loan borrower either in person, by
audiovisual presentation, or by interactive
electronic means prior to its release of the
first disbursement, unless the student borrower
has received a prior Federal Stafford, Federal
SLS, or Direct subsidized or unsubsidized loan. A
school must ensure that an individual with
expertise in the title IV programs is reasonably
available shortly after the counseling to answer
the student borrower's questions regarding those
programs. As an alternative, in the case of a
student borrower enrolled in a correspondence
program or a student borrower enrolled in a
study-abroad program that the home institution
approves for credit, the counseling may be
provided through written materials, prior to
releasing those loan proceeds.
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QUESTIONS?
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e-LibraryResources

• Jennifer DiGiacomo
• Compliance Officer
• MOHELA

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e-LIBRARY MENU
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Tips and Tricks

• Follow the breadcrumbs
• Search functions

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Daily Briefings from 1999 to present
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Dear Partner Letters more than you can find on
IFAP!
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Dear Partner Letters
From IFAP site
Dear Partner/Colleague Letters Archived Dear
Colleague/Partner Letters (DCLs) are defined as
those "older" then three calendar years. Our
files date back to 1995.
NCHELP electronic records go back to 1974
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Electronic Standards Documentation and Tools
This section contains Electronic Standards
documentation and useful testing tools associated
with CommonRecord, CommonLine and CAM.
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Trying to Find the Most Recent Forms?
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HEA Reauthorization Student Loan Legislation
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HEA Reauthorization Student Loan Legislation
From this page to the next page
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Law Resource
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Looking For a Manual or Guide?
Keep following the breadcrumbs
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A cure for insomnia- try a Federal Register
Be careful to choose what you really want.
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Presentations Could Go Paperless
Check out this PowerPoint and other NCHELP
presentations at your leisure from from the
E-Library.
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Other Valuable Resources

• Higher Education Research
• Legal Proceedings
• Reference Materials Resources
• Reports Testimonies
• Training Modules

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QUESTIONS?