1. Title IV Student Loan Update A distinctive approach to educational debt recovery since 1974.

2. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 Other Legislation Federal Perkins Loan Issues President’s FY 2007 Budget Request HEA Reauthorization

3. Copyright ©2005, Todd, Bremer & Lawson, Inc. Recent Legislation Higher Education Reconciliation Act of 2005 P.L. 109-171, Feb 8, 2006 (HERA) Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 P.L. 109-234, June 15, 2006 Higher Education Act Extension P.L. ????, Extended through June 30, 2007

4. Copyright ©2005, Todd, Bremer & Lawson, Inc. Not-So-Recent Legislation Student Loan Interest Rates P.L. 107-139, Feb 8, 2002 Taxpayer-Teacher Protection Act of 2004 P.L. 108-409, Oct 30, 2004 Higher Education Relief Opportunities for Students (HEROES) P.L. 109-78, extended through 9/30/07

5. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Active Duty Military Deferment Beginning July 1, 2006, provides for a military deferment of up to three years for FFEL, Direct Loan and Federal Perkins Loans that were first disbursed on or after July 1, 2001 For borrowers on active duty during war or other military operation or during national emergency (including qualify National Guard) At least 30 days duration

6. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Active Duty Military Deferment Military operation defined as “contingency operation” Current examples: Operation Enduring Freedom (Afghanistan) and Operation Iraqi Freedom (Iraq) Consolidation loan made on/after July 1, 2001 eligible if all underlying Title IV loans eligible Eligibility documentation includes military orders or commanding officer’s written statement Don’t need to recollect documentation if already have for HEROS forbearance

7. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Active Duty Military Deferment Included in new Perkins MPN; prior borrowers must be informed. Definition of terms used in the deferment DCL GEN-06-02 Provides that there is no refund of payments made Need to redistribute payments, cannot refund if redistribution makes an overpayment.

8. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Increased loan limits in FFEL and Direct Loan Increased annual loan limits First year students from $2,625 to $3,500 Second year students from $3,500 to $4,500 Increased annual unsubsidized loan limit for graduate students from $10,000 to $12,000 No change in aggregate loan limits Effective July 1, 2007

9. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Extends PLUS Eligibility to Graduate Students and professional students Retains all eligibility criteria including credit checks and no in-school status or grace period Provides for in school deferment. Effective July 1, 2006

10. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Rehabilitation of Defaulted Student Loans Provides that the number of on-time payments required to rehabilitate a loan would be reduced from 12 to 9 made within a 20 days of the due date during 10 consecutive months DOES NOT apply to the Perkins loan program Effective July 1, 2006

11. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans False Certification Discharge Based on borrower being a victim of the crime of identity theft Need a copy of local, state or Federal court verdict or judgment required. (It must be an adjudicated crime)

12. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Extends Teacher Loan Forgiveness from Teacher- Taxpayer Act Permanently and retroactively extends the authorization of the increased loan forgiveness of $17,500 for “highly qualified” math, science, and special education teachers at qualified low-income schools Provided eligibility to private school teachers by defining “highly qualified” for them. Effective date October 1, 2005

13. Copyright ©2005, Todd, Bremer & Lawson, Inc. Higher Education Reconciliation Act of 2005 FFEL, Direct Loans, & Perkins Loans Consolidation Loans Provides no reconsolidation Eliminates In-School Consolidations in Direct Loan Program and “Early conversion to repayment” Consolidations in FFEL Program Eliminates joint spousal consolidations Perkins borrowers can still request to enter repayment early to consolidate or for any other reason. However there is really no good reason to do so anymore.

14. Copyright ©2005, Todd, Bremer & Lawson, Inc. Federal Perkins Loan Issues Revised Perkins Loan MPN DCL CB-06-10, June 22, 2006 Includes the HERA Military Deferment Language Authorized through June 30, 2009 Must be distributed as of July 1, 2006 Revised Perkins E-MPN DCL CB-06-11, July 3, 2006

15. Copyright ©2005, Todd, Bremer & Lawson, Inc. Federal Perkins Loan Issues Revised Perkins Loan Assignment Form DCL CB-06-12, Aug 12, 2006 New changes for E-signature Perkins Assignments, Perkins MPNs, and Reporting “date of first disbursement” Need copy of audit of compliance to E-signature Standards

16. Copyright ©2005, Todd, Bremer & Lawson, Inc. Total and Permanent Disability Application DCL – GEN-06-12, July 31, 2006 Approves Application through May 31, 2008 New address for Disability Assignments U.S. Department of Education Conditional Disability Discharge 6201 Interstate 30 Greenville, TX 75402

17. Copyright ©2005, Todd, Bremer & Lawson, Inc. President’s FY 2007 Budget Request Federal Pell Grant Program Proposals Continued maximum award for 2007-2008 at $4,050 Provides year-round Pell Grants Limits eligibility to equivalent of 16 semesters Eliminates tuition sensitivity award rule

18. Copyright ©2005, Todd, Bremer & Lawson, Inc. President’s FY 2007 Budget Request FFEL and Direct Loan Program Proposals No proposed changes for FFEL and Direct Loan Programs

19. Copyright ©2005, Todd, Bremer & Lawson, Inc. President’s FY 2007 Budget Request Campus Based Program Proposals No program changes for FSEOG and FWS programs Perkins Loan Program Provides no funding for FCC or loan cancellations Recalls Federal portion repayments

20. Copyright ©2005, Todd, Bremer & Lawson, Inc. HEA Reauthorization H.R. 609 – College Access and Opportunity Act of 2006 Passed by the House on March 30, 2006 Senate – No billed passed as of today. Unlikely in 2006, election year, need full week to debate on floor. 2007 ??? Depends on election outcome in November