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Business and Policy Areas
Business and Policy Areas
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Additional Guidance Released for Hurricane-Affected Students and Institutions

May 3, 2006

A recently issued Dear Colleague letter (GEN-06-07) from the Department of Education extends several earlier waivers and provides additional guidance for institutions directly affected by hurricanes Katrina and Rita, as well as those institutions with students or borrowers who were impacted.

The following provisions are of interest to business officers at affected institutions:

  • Institutions may transfer up to 100 percent of their campus-based program allocations among the campus-based programs, except that FSEOG and FWS funds cannot be transferred to the Perkins Loan fund.
  • Matching funds are not required for the campus-based programs for 2005-06.
  • Institutions do not need to spend at least 7 percent of their FWS funds on community service employment.
  • The requirement to meet the financial responsibility standard ratios or the administrative capability standards may be waived on a case-by-case basis, but the waiver must be granted by June 30.
  • Relief from return of Title IV rules is provided at different levels, depending on the length of time that an institution was closed.
  • Requests for late disbursements of FFEL or Direct Loans will be considered, but approval must be granted by June 30.

Institutions that were hit by the storms, enrolled displaced students or students from the disaster areas, or collect loans from individuals who were impacted, may be affected by the following provisions:

  • Earlier guidance directed institutions and other loan holders to suspend due diligence activities with respect to certain FFEL and Perkins borrowers. GEN-06-07 extended that suspension, but only until April 30.
  • Institutions are encouraged to be flexible in granting forbearances to Perkins borrowers. Requirements for written requests are waived until June 30.
  • For loan cancellations that require the borrower to be continuously employed for a period of time, the time between the hurricane and June 30 should be disregarded for affected borrowers.
  • Missed payments will not count against a borrower in terms of the consecutive payments needed to rehabilitate a defaulted loan.

The NACUBO contact for student aid issues is Anne Gross, vice president, regulatory affairs.


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