ED Explains Changes to Direct Loan Program
September 8, 2011
The Department of Education has issued a Dear Colleague letter (GEN-11-16) explaining changes to the Direct Loan program mandated by the Budget Control Act. The legislation, signed into law in August, saves money by restricting benefits to borrowers in two ways. First, graduate students will no longer be eligible for subsidized loans made for enrollment periods beginning on or after July 1, 2012. Loans received for loan periods before that date are not affected.
Second, for Direct Loans first disbursed on or after July 1, 2012, the law eliminates ED’s ability to offer incentives to encourage on-time repayment by borrowers. Previously, ED decreased the interest rate on a borrower’s Direct Loan if the borrower paid on time for one year. The law does allow ED to reduce Direct Loan interest rates for borrowers who set up direct, automatic payments from their bank accounts.
- Task Force Urges Regulatory Reform
- Legislators Take Action on Education, Charitable and Research Incentives
- Associations Comment on College Ratings System
- ON-DEMAND: How to Build, Develop, and Support a Compliance Program at Your Institution
- ON-DEMAND: Strategic Tuition Assessment and Tuition Restructuring
- ON-DEMAND: Are Shared Services Right for Your Organization – The KU Journey
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- ON-DEMAND: VIRTUAL: Student Financial Services Conference
- ON-DEMAND: VIRTUAL: Higher Education Accounting Forum
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis