For an in depth description of the provisions in the timeline, visit www.nasfaa.org/publications/2007/G2669Summary091007.html.

July 1, 2007

• Pell Grant tuition sensitivity award rule eliminated

October, 1 2007

Economic Hardship Deferment

• Changed one of the conditions from borrowers earnings being less than 100% of the poverty level for a family size of two, to 150% of poverty level for the borrower's family size
• Debt to income ratio provisions maintained

Loan Forgiveness for Public Service Employees

• Direct Loan borrowers who:
  • Had made 120 monthly payments
  • Starting after October 1, 2007
  • Employed in public service during entire repayment period
  • FFEL borrowers may consolidate into DL to get benefit but all payments must have been in DL

Current (HERA) Military Deferment

• For all Title IV loans, not just loans made on or after July 1, 2001
• Three year time limit removed
• A 180 day period after mobilization is added
• New deferment for up to 13 months following end of service if borrower was in school or grace when called to active duty added

Lender and Guaranty Agency Subsidy Cuts

• FFEL guaranty agency retention percentage reduced from 23% to 16%
• Guaranty agency account maintenance fee reduced from .10% to .06%
• FFEL lender special allowance payments (SAP) reduced by 55 basis points (40 for non-profit lenders)
• Lender loan fee increased from .50% to 1.0%
• Elimination of Exceptional Performer Designation for FFEL lenders, lender servicers, and guaranty agencies - Extension for lenders until expiration of current designation

2008-09 Award Year

• Pell Grant award increases by $490 for the 2008-09 and 2009-10 academic years

July 1, 2008

• Teacher Education Assistance for College and Higher Education (TEACH) Grant program begins

• First interest rate reduction on FFEL and DL undergraduate subsidized loans from 6.8% to 6.0% for loans first disbursed between 7/1/08 - 6/30/09

• Increased options to consolidate FFEL loans into a Direct Consolidation Loan for purpose of new Direct Loan only Public Service loan forgiveness program

2009-10 award year

Need Analysis and EFC Calculation

• The way income protection allowances are calculated and updated (except for Parents) is modified
• Auto Zero EFC income level increases from $20,000 to $30,000 (indexed)
• Dislocated Worker in addition to type of tax return and means tested benefits added
• Time for means tested benefits increased from 12 to 24 months
• Welfare payments, earned income credit amounts, special fuel tax credits, excluded foreign income, and untaxed social security benefits excluded from specified list of "untaxed income"
• "Special combat pay" excluded from income
• Qualified education benefit (529 plan) owned by dependent student is an asset of the parent
• Distributions from 529 plans excluded from other financial assistance
• Adds to independent student definition:
  • Is in foster care or a ward of the court, at any time when the individual is 13 years of age or older
  • Is an emancipated minor or is in legal guardianship
  • Has been verified as an unaccompanied youth who is a homeless child or youth

July 1, 2009

• Second interest rate reduction on undergraduate subsidized loans from 6.0% to 5.6% for loans first disbursed between 7/1/09 - 6/30/10

Professional Judgment and Dependency Overrides

• Adds dislocated worker and homelessness as examples of when an FAA can use professional judgment
• Provides that an FAA can use a dependency override made by another FAA within the same award year

Income Based Repayment

• Stafford and Student PLUS loans.
• Borrower's maximum annual repayment amount no more than 15% of the difference between AGI and 150% of the poverty line based on family size.
• If negative amortization, government pays interest on subsidized loans for up to three years.
• Unpaid amounts are forgiven after 25 years.

Special FFEL Auction Pilot

• For FFEL PLUS Loans for parents (new borrowers only).
• State by State Auction looking for lowest special allowance rates.
• Two "winning" lenders will be the only parent PLUS lenders in that state for new parent PLUS borrowers.

July 1, 2010

• Third interest rate reduction on undergraduate subsidized loans from 5.6% to 4.5% for loans first disbursed between 7/1/10 - 6/30/11

2010 award year

• Pell Grant maximum increased $690 for 2010-11 and 2011-12

July 1, 2011

• Third interest rate reduction on undergraduate subsidized loans from 4.5% 3.4% for loans first disbursed between 7/1/11 - 6/30/12

2012-12 award year

• Pell grant maximum increased $1,090 for 2012-13

July 1, 2012

• Undergraduate subsidized loan rates revert to 6.8%