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Outstanding student loan debt increased to $1.5 trillion — up by $20 billion — in the third quarter of fiscal year 2019, according to the Federal Reserve Bank of New York’s quarterly report. The report found that aggregate delinquency rates increased by 0.4 percentage points since the last quarter, and as of September 30, 4.8% of student loans were in some stage of delinquency “due primarily to increases in early delinquency buckets.” The report cautioned that these figures are likely to understate delinquency because about half of those loans are in deferment, grace periods, or forbearance, and are therefore not currently in the repayment cycle. “This implies that among loans in the repayment cycle delinquency rates are roughly twice as high,” according to the report. The report also noted that the transition rate into 90 or more days of delinquency slightly improved since the last quarter (by 9.3%), and that 10.9% of aggregate student debt was 90 or more days delinquent or in default.

Earlier this month, NASFAA’s Board of Directors voted to adopt the recommendations proposed by the Enhanced Loan Counseling Task Force. The group, formed in response to growing congressional interest in mandating annual student loan counseling, recommended a customized counseling approach, using modules that would be offered at key points in students’ educational paths instead of a one-size-fits-all annual counseling requirement. Read the full report.

Do you have at least 10 years of financial aid experience? Do you have a leadership or consulting background? Are you looking for a new challenge? Blue Icon Advisors is looking for qualified financial aid and enrollment management professionals to join our team of independent consultants. We have projects you can complete in your spare time as well as on-site interim staffing. Interested? Apply now!

This edition of the Capitol Recap includes three bills that tackle FAFSA simplification, including a NASFAA-endorsed bill from Sen. Lamar Alexander (R-Tenn.). Bills aimed at improving loans and repayments plans were popular this month, with 10 bills in total, two of which were aimed at adding additional eligibilities to the Public Service Loan Forgiveness (PSLF) program for health care practitioners and teachers. In total, 27 different student aid-related bills were introduced in October. NASFAA’s Capitol Recap provides summaries of each bill introduced in October, while the NASFAA Legislative Tracker provides a comprehensive list of all student aid-related bills introduced so far this session.

Join ACE, AACRAO, EDUCAUSE, and Credential Engine next Wednesday, November 20, for an introduction to a new joint initiative aimed at leveraging the power of transparent data about credentials in order to help students build educational pathways, education institutions clearly communicate credential offerings and value, employers create closer partnerships with higher education, and policymakers to be more informed in their decision making. During this webinar, participants will receive an overview of the Higher Education Transparency Initiative, an introduction to the concept of credential transparency, a peek into the tools and resources available to pursue credential transparency, and access to experts for questions on how to get involved. Reserve your spot for the webinar. 

On Oct. 30, 2019, the U.S. Department of Education Office of Inspector General issued Dear CPA Letter CPA-19-01. This letter amends the September 2016 Audit Guide, Guide for Audits of Proprietary Schools and For Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs (Audit Guide), by adding Section C.8.12 to Chapter 3 to determine whether Institutions of Higher Education have complied with the Federal Trade Commission’s regulations for implementing the Gramm–Leach–Bliley Act in regards to ensuring the security and confidentiality of customer information.

The Repayment Plan Request form serves as the means by which Direct Loan borrowers notify the Department of Education (ED) of their choice of an initial repayment plan under the Standard, Extended or Graduated options before their loans enter repayment. The form may also be used by borrowers to request a change in the Standard, Extended or Graduated repayment plans options after their loans have entered repayment. If a borrower does not select an initial repayment plan, the borrower is placed on the Standard Repayment Plan in accordance with 34 CFR 685.210(a)(2).

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