Campus Partners Update Newsletter
September 1, 2009
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Inside Campus Partners Stephanie Clenney
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Federal Perkins Program Proposed Expansion
In last month’s edition of the Campus Partners Update, we announced that the House Education and Labor Committee passed the “Student Aid and Fiscal Responsibility Act” (SAFRA) on July 21. The Act, as proposed, provides for the expansion of the availability of funds for the Perkins program. The expansion would be achieved by eliminating the current Federal Perkins program and replacing it with the Federal Direct Perkins Loan Program on July 1, 2010.
Campus Partners is supportive of additional funding for the Perkins program. Along with COHEAO, we believe schools should be fully aware of proposed changes to the program and its impact on schools and borrowers. Below is a summary of some of the proposed changes:
- The interest rate will remain at a 5% fixed rate. However, interest will now be charged during the in-school periods and during the grace periods. Your borrowers will lose the deferred interest benefit currently available. This could result in the borrower owing several thousand dollars in accrued interest when they leave school depending on amount they borrow.
- The grace period will be reduced from nine to six months.
- Borrowers will lose the cancellation benefits that are available today under the current program (e.g., law enforcement, medical technicians, nurses, etc.).
- Prorated loan forgiveness programs that exist today will be replaced with policies governing the Federal Direct Unsubsidized Loan Progam. For example: If a borrower only completes two years of law enforcement service and decides not to continue in this line of employment, the borrower is still eligible for the first and second year of benefits. However, prorating benefits will not be possible under the new Federal Direct Perkins program. The borrower must perform service for five years to receive loan forgiveness.
- Under the new Federal Direct Perkins program, borrowers will be required to maximize their borrowing under the Federal Stafford Subsidized Loan program at a current rate of 5.6% or the Federal Stafford Unsubsidized loan program at a rate of 6.8% before being offered funds under the Federal Direct Perkins program at a 5% interest rate. The rate for Subsidized Stafford loans drops over the next two years, but climbs to 6.8% for the 2012-2013 school year. The interest rate for Subsidized and Unsubsidized Stafford loans for graduate students is 6.8%.
COHEAO has an abundance of information on their web site that will assist you in communicating with your representatives in Congress, including talking points, locations of town hall meetings, letter templates, and more. Visit the COHEAO web site at www.coheao.org.
The primary topic of discussion was the proposed changes to the Federal Perkins program. Many school officials, servicers, and collection agencies were in attendance and all voiced their concerns regarding the proposed changes to the Federal Perkins program.
The Department of Education update was presented by Gail McLarnon from the Office of Postsecondary Education. McLarnon provided attendees with the FY 2010 Budget Proposal, a legislative update, regulatory update, and addressed Perkins loan issues. She reiterated the information that Campus Partners previously provided customers regarding the Federal Perkins Master Promissory Note (MPN). McLarnon stated that although the current MPN has an expiration date of June 30, 2009, this date does not limit the use of the current MPN nor does it impact its enforceability. In addition, she said the new MPN should be available by mid-August. As the Update goes to publication this month, the new MPN has not been posted on the IFAP web site. Campus Partners will send customers an email as soon as information on the new MPN is published.
Another presentation by Jackie Ito-Woo, Associate Director at the University of California, Office of the President, centered on Negotiated Rulemaking. Ito-Woo represented COHEAO during Negotiated Rulemaking process and provided the group with an update on her efforts. In addition, Campus Partners took part in a panel discussion on Maintaining a Low Cohort Default Rate and provided attendees information from a regulatory perspective. Other session topics provided information about the new Title X regulations published by the Federal Reserve (Reg Z), Ensuring College Affordability in an Economic Downturn, Legal Issues, and much more.
After the conference, Campus Partners joined a group of COHEAO members and visited Capitol Hill. Our goal was to communicate our concerns about the impact the proposed Student Aid and Fiscal Responsibility Act (SAFRA) could have on students.We visited several members of Congress including Senator Byron Dorgan (D-ND), Senator Tim Johnson (D-SD), Senator Richard Burr (R-NC), Senator Richard Durbin (D-IL), Senator Kay Hagan (D-NC), and others.
COHEAO has worked hard to maintain a low membership cost for schools that are interested in becoming a member. For more information or to join, visit www.coheao.org.
New TILA Requirements to Impact Institutional Loans
On August 14, 2009, the Federal Reserve Board published final rules in the Federal Register related to the Truth in Lending Act (TILA) as it affects a variety of lending practices, including institutional loans offered by schools and universities.
Proposed rules were issued on March 24 that updated TILA requirements in accordance with changes authorized by the Higher Education Opportunity Act (HEOA). Title X of HEAO added disclosure and timing requirements that applied to creditors providing private loans, including colleges and universities offering low interest institutional loans to their students. Despite input from the higher education community which unsuccessfully argued that institutional loans should be exempt from TILA requirements, the new rules have been approved and will go into effect September 14, 2009. Compliance is optional until February 14, 2010.
The new requirements will entail sending Truth-in-Lending disclosures that meet certain formatting and timing requirements to your Institutional borrowers. Schools will be required to provide these disclosures with loan applications, at the time of loan approval, and at disbursement.
While the new requirements are complex and can be viewed as burdensome to educational institutions, Campus Partners can help. Because of our extensive experience in the origination, disbursement, and servicing of private loans, we will be able to support our partners in providing TILA notifications to borrowers in the format and on the schedule required by federal law.
The following link provides the complete text of 12 CFP, Part 226, Truth-in-Lending: Final Rule.
http://edocket.access.gpo.gov/2009/pdf/E9-18548.pdf
In addition to governing institutional loans, the final rules address other subjects including preferred lender lists and self-certification requirements for educational loans.
We will provide additional details in future issues of the Update newsletter and through other communications. We plan to offer a Web conference on the subject around the first of the year.
Notice of Proposed Rulemaking – Part 2
The Department of Education published a Notice of Proposed Rulemaking in the Federal Register dated July 28, 2009. These proposed changes address preferred lender lists, codes of conduct, and self-certification for non-federal loans. Additional information is also provided about the proposed requirements for Perkins borrowers during exit counseling and cancellation benefits. Final regulations will be published by November 1, 2009. To review the NPRM, go to http://ifap.ed.gov/fregisters/FR07282009.html.
Red Flag Rule Enforcement Extended by Another Three Months
The Federal Trade Commission announced it will delay enforcement of the new “Red Flags Rule” another three months — until November 1, 2009 — to give creditors and financial institutions more time to develop, document, and implement written identity theft prevention programs.
Question: If a borrower does not complete electronic exit counseling or left school before completing exit counseling, do I have to mail the borrower a paper copy of the exit counseling materials? Answer: Yes. The FSA Handbook clarifies that “If the borrower withdraws from school without the school’s prior knowledge or fails to complete an exit counseling session, the school must provide exit counseling through either interactive electronic means or by mailing counseling material to the borrower at the borrower’s last known address within 30 days after learning that the borrower has withdrawn from school or failed to complete exit counseling. Finally, schools must document all exit interviews.” |
The Product Services team continues to be very busy as they implement system changes
required by regulations while managing system enhancements that facilitate the customer
and borrower experience. To catch up with recent enhancements, please review the
following attachment.
Attachment: Recent System Enhancements
Our third-party audit for the fiscal year ending June 30, 2009 will be available by September 15. Please email Debra Pitts at dpitts@campuspartners.com if you need preliminary results prior to our targeted distribution date. We will send an email to all customers when the report is published and will begin fulfilling requests for CDs and paper copies immediately . An Audit Report Request Form is available on our Web site.
Attachment: Audit Request Form
Customer Appreciation
We are celebrating anniversaries of 40, 35, and 25 years with the following customers. We are appreciative of our customers’ continued loyalty over the years, and we are proud to say that over 80% of our customers have been with us for over 20 years. Thanks for letting us serve you!
40 Years
Lees College, Inc.
Lincoln Memorial University
35 Years
Central Piedmont Community College
Parkland College
Siena College
University of the Ozarks
25 Years
Grambling State University
University of Dayton
Please see the following attachment for more customers observing other milestone anniversaries with us this quarter.
Attachment: Long Term Anniversaries
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“I love the new exit packets. I got the first ones today. Very user friendly; easier to copy, fits better in envelopes... Just a few reasons, but I do like them! The mailing labels are also much easier to deal with! And, they are much easier to sign off on.” Connie Cox
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Campus Partners has concluded its Student Loan 101 and 202 workshop series for the year, but Web Conferences are scheduled on a monthly basis for the remainder of 2009 to meet your training needs. Please join us for our next Web conference--“Where do I Start? A Month to Month Guide”--scheduled for Thursday, September 10 at 2:00 pm Eastern.
Managing the Exit Interview Process: New topic!
As the end of a semester approaches, schools are faced with the onset of the exit interview process. It’s never too early to start planning! Preparing for the exit interview process is critical as you must ensure all loan information and the separation date(s) are accurately reflected on the system. We will be discussing the importance of the school’s involvement in preparing for the exit interview process and offering helpful suggestions. Join us for a webinar on “ Managing the Exit Interview Process” scheduled for October 8th at 2:00pm EST. To register or find out more information, please contact Debra Pitts at dpitts@campuspartners.com.
2009 Web Conference Schedule
| Topic | Date |
|---|---|
Where do I start? A Month to Month Guide |
Thursday, September 10 2:00 to 3:30 Eastern |
Managing the Exit Interview Process-New! |
Thursday, October 8 2:00 to 3:30 Eastern |
Regulations Update |
Thursday, November 12 2:00 to 3:30 Eastern |
Tips for Managing Delinquencies |
Thursday, December 10 2:00 to 3:30 Eastern |
Campus Partners staff will attend the following conferences..
Williams & Fudge will hold its Student Loans and Receivables Collection Conference on September 20-23 at the Hilton Myrtle Beach Resort. For more information, go to http://www.wfcorp.com/news/upcoming.html.
The Texas Bursars for Universities and Colleges will host the Texas BUC$ Conference at the Omni Bay Front Hotel on Oct. 11-14 at Corpus Christi, TX. More details are available at http://texasbucs.com.
The Minnesota Collection Network will present its Mega Conference XVII on Oct 19-21 at the Sheraton Bloomington in Bloomington, MN. More information is available at http://www.mnnetwork.org/.
Cutoff dates for August, September, October, and November are presented below:
Transaction
|
Aug. 2009 |
Sept. 2009 |
Oct. 2009 |
Nov. 2009 |
|---|---|---|---|---|
Last day to receive collection payments |
8/25 |
9/25 |
10/27 |
11/20 |
Last day to receive regular payments |
8/26 |
9/28 |
10/28 |
11/23 |
Last day for online payments |
8/28 |
10/2 |
10/30 |
11/25 |
Date final post begins |
8/28 |
10/2 |
10/30 |
11/27 |
Report date used for final post |
8/31 |
9/30 |
10/31 |
11/30 |
Last day deposits created for deposit to bank account |
8/28 |
9/30 |
10/30 |
11/25 |
2009 Cutoff Dates
Month |
Last day to receive collection payments |
Last day to receive regular payments |
Last day for on-line payments |
Date final post begins |
Report date used for final post |
Last day deposits created for deposit to bank account |
December 2008 |
12/26/2008 |
12/29/2008 |
1/2/2009 |
1/2/2009 |
12/31/2008 |
12/31/2008 |
January 2009 |
01/27/2009 |
01/28/2009 |
01/30/2009 |
01/30/2009 |
01/31/2009 |
01/30/2009 |
February 2009 |
02/24/2009 |
02/25/2009 |
02/27/2009 |
02/27/2009 |
02/28/2009 |
02/27/2009 |
March 2009 |
03/24/2009 |
03/25/2009 |
03/27/2009 |
03/27/2009 |
03/31/2009 |
03/27/2009 |
April 2009 |
04/27/2009 |
04/28/2009 |
05/01/2009 |
05/01/2009 |
04/30/2009 |
04/30/2009 |
May 2009 |
05/26/2009 |
05/27/2009 |
05/29/2009 |
05/29/2009 |
05/31/2009 |
05/29/2009 |
June 2009 |
06/23/2009 |
06/24/2009 |
06/26/2009 |
06/26/2009 |
06/30/2009 |
06/26/2009 |
July 2009 |
07/28/2009 |
07/29/2009 |
07/31/2009 |
07/31/2009 |
07/31/2009 |
07/31/2009 |
August 2009 |
08/25/2009 |
08/26/2009 |
08/28/2009 |
08/28/2009 |
08/31/2009 |
08/28/2009 |
September 2009 |
09/25/2009 |
09/28/2009 |
10/2/2009 |
10/2/2009 |
09/30/2009 |
09/30/2009 |
October 2009 |
10/27/2009 |
10/28/2009 |
10/30/2009 |
10/30/2009 |
10/31/2009 |
10/30/2009 |
November 2009 |
11/20/2009 |
11/23/2009 |
11/25/2009 |
11/27/2009 |
11/30/2009 |
11/25/2009 |
December 2009 |
12/28/2009 |
12/29/2009 |
12/31/2009 |
12/31/2009 |
12/31/2009 |
12/31/2009 |
January 2010 |
01/26/2010 |
01/27/2010 |
01/29/2009 |
01/29/2009 |
01/31/2009 |
01/29/2009 |
