March 27, 2008
Early Implementation Provisions from the November 1 Final Rules
Several major provisions of the November 1 Final Rules may be implemented prior to the effective date of July 1, 2008. In previous articles, OGSLP highlighted the simplification of the deferment process and frequency of capitalization on Federal Consolidation loans. This edition features the Final Rules provisions affecting graduate or professional student (Grad) PLUS loans and certain provisions of loan discharge for false certification as a result of identity theft.
Entrance and Exit Counseling Requirements for Grad PLUS Loans
The November 1 Final Rules added all first-time Grad PLUS loan borrowers to the required Stafford loan borrower entrance counseling requirements. The entrance counseling requirements for Grad PLUS loan borrowers vary depending on the borrower's Stafford loan history. A school may provide comprehensive entrance counseling to meet the requirements for both categories of Grad PLUS loan borrowers.
Exit counseling requirements for Stafford loans were modified for borrowers who also received a Grad PLUS loan. For these borrowers, the school must include Grad PLUS loans when calculating the average anticipated monthly payment amounts if the school uses the average debt of other student borrowers as the basis for the estimate.
Additional information about requirements for Stafford and Grad PLUS loan entrance and exit counseling can be found in the 2008-2009 Federal Student Aid Handbook, Volume 2, Chapter 6, pp 2-78 to 2-84. If you have questions, please contact Policy, Compliance, and Training at (405) 234-4432 or email@example.com.
Loan Discharge for False Certification as a Result of Identity Theft
Another major provision from the November 1 Final Rules that is eligible for early implementation pertains to student loan discharge for false certification as a result of identity theft. Under this provision, a lender:
- Shall suspend consumer reporting agency reporting on a loan for up to 120 days after receiving a valid identity theft report or notification from the consumer reporting agency that a report of identity theft has been made while the lender investigates the enforceability of a loan.
- May grant a 120-day administrative forbearance on the loan while the lender is investigating a false certification as a result of a possible identity theft.
For an identity theft claim to be considered for discharge, a judicial determination by local, state, or Federal court must verify that identity theft has occurred, name the perpetrator, and confirm that the victim did not receive or benefit from the loan proceeds. If you have questions, please contact Policy, Compliance, and Training at (405) 234-4432 or firstname.lastname@example.org.