ISAC Update

Welcome to the January 2005 ISAC Update for Lenders and Servicers, which is a compilation of e-Messages sent through College Zone’s e-Messaging service throughout January. This e-Messaging service has replaced ISAC's use of printed newsletters and special e-mail lists as our primary means of communicating information to you. 

The articles in this Update have been organized according to the Lender Zone subscription groups to which the messages were distributed via College Zone’s e-Messaging service.

Questions?

Questions regarding information in this ISAC Update can be directed to Lender Services by sending an e-mail message to lenderservices@isac.org or calling 800.899.ISAC (4722) and speaking with one of the following staff members:

• Sharon Bankston, extension 2826
• David Barinholtz, extension 2822
• Sondra Gardner, extension 2827
• Julie Henschel, extension 2823

On occasion, you may be directed to a specific contact person or area; when this occurs, we will provide the appropriate information in the individual article or message.

In Case You Didn't Know... Updates and Reminders 
Sent to Marketing News, Announcements and Operational Updates, Announcements on January 18, 2005

We're sharing the following updates and reminders with you, including information about the guarantee fee, special allowance interest rates, Dear Colleague Letters (DCLs) from the U.S. Department of Education (ED), and guidelines regarding inducement prohibitions, as brief summaries of some recent news.

Elimination of 1% Guarantee Fee Extended through December 31, 2005

At its last meeting, the Illinois Student Assistance Commission (ISAC) approved the extension of the elimination of the 1% guarantee fee for ISAC-guaranteed Federal Family Education Loan Program (FFELP) loans disbursed on or after January 1, 2005 through December 31, 2005.

ED Announces Special Allowance Rates for Quarter Ending December 31, 2004

ED has announced the average bond equivalent rates for 91-day Treasury Bills during the quarter ending December 31, 2004, as 2.06%; the average of the bond equivalent rates for the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in the same quarter was 2.23%. Detailed information regarding use of these rates in the calculation of special allowance payment is provided at ED's Financial Partners Portal, which can be accessed via the Quick Links menu of the Lender Zone front page.

Recent DCLs Discuss Consolidation Payoffs and Special Allowance Payment Calculations

DCL FP-04-09, issued in December 2004, discusses FFELP consolidation payoffs. Included are instructions, to be completed no later than March 2005, for enrolling with Federal Student Aid (FSA) to receive electronic payoffs for FFELP loans that are repaid via Direct Consolidation Loans.

DCL FP-05-01, issued in January 2005, provides a description of changes to the calculation of special allowance payments for certain FFELP loans made or purchased with tax-exempt funds. These changes are a result of the Taxpayer-Teacher Protection Act of 2004 (discussed in the December 2004 DCL GEN-04-14), which was signed into law by President Bush on October 30, 2004.

These DCLs are posted at the Information for Financial Aid Professionals (IFAP) Library, which can be accessed via the Quick Links menu of the Lender Zone front page.

Guidelines Regarding Compliance with HEA Inducement Prohibitions

The NCHELP Web site, which can be accessed via the Quick Links menu of the Lender Zone front page, provides information about a set of guidelines regarding compliance with certain inducement prohibitions contained in the Higher Education Act (HEA). The guidelines have been endorsed by the Consumer Bankers Association (CBA), Education Finance Council (EFC) and National Council of Higher Education Loan Programs (NCHELP).

Mark Your Calendars for Upcoming Important Dates 
Sent to Marketing News, Announcements and Operational Updates, Announcements on January 11, 2005 

January 17th - Martin Luther King, Jr. Day

In observance of the national holiday for the birthday of Martin Luther King, Jr., ISAC offices will be closed on Monday, January 17th, and will reopen on Tuesday, January 18th.

Loan records received at ISAC on Martin Luther King, Jr. Day, as well as disbursement records received at the National Disbursement Network (NDN), will be processed the following business day. This means that CommonLine or Common Account Maintenance (CAM) files received on January 17th will be processed on January 18th, with results available January 19th (or the next available day for any schools opting to receive NDN files on specific days of the week). Note that ELM Resources will continue to process and transmit files on January 17th.

College Zone is available 24 hours a day, 7 days a week - even when the ISAC offices are closed. Also, questions or inquiries may be submitted at any time by sending an e-mail message to ISAC's Lender Services staff. With the exception of holidays, ISAC staff will review and respond to messages during regular business hours (Monday through Friday, 8 a.m. - 5 p.m. CT).

We extend our best wishes for a safe and happy holiday.

FAAM - Helping Your Student Loan Borrowers Prepare for the 2005-06 Academic Year

February is Financial Aid/Admission Awareness Month (FAAM) - time for you to encourage your returning student loan borrowers to file their 2005-06 Free Application for Federal Student Aid (FAFSA) as early as possible!

This continues to be a record-breaking year for the FAAM Committee, with currently over 80 FAFSA Completion sites confirmed for February 2005. The current list of sites is available at the newly redesigned FAAM Web site. If your institution is not hosting a FAFSA Completion Workshop you can refer students and parents to a nearby location for assistance. The FAAM Web site will continue to be updated as new information becomes available, so be sure to check back on a regular basis.

January 30, 2005 and February 27, 2005 have been designated as College Goal Sundays in Illinois! On these dates Illinois and FAAM will join other states across the country by participating in events designed to assist low-income families and those who have no college-going tradition complete the FAFSA.

FAAM, a joint effort between the Illinois Association of Student Financial Aid Administrators (ILASFAA), the Illinois Student Assistance Commission (ISAC), the Illinois Association for College Admission Counseling (IACAC) and Federal Family Education Loan Program (FFELP) lenders, is an outreach campaign focusing on the importance of a college education and the admission process as well as the availability of financial assistance.

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2005-06 MAP Start-Up Formula Approved - Summary of January 24th Commission Meeting
Sent on January 24, 2005

The following is a summary of action taken at this morning's meeting of the Illinois Student Assistance Commission (ISAC). Details regarding all topics discussed are provided in the January 24th Agenda Book, which can be accessed from the "2005 Agenda Books" page within the "ISAC's Governing Board: The Commission" section of College Zone's e-Library.

Executive Director's Report

The following announcements were made regarding 2004-05 programs administered by ISAC:  

• Due to a combination of factors affecting the anticipated payment claim rates for first term, ISAC expects to be able to release Monetary Award Program (MAP) grants from suspended status for approximately 9,000 students.
• Effective January 15, 2005, $650,000 has been appropriated for the College Savings Bond Bonus Incentive Grant (BIG) Program, and ISAC is currently accepting applications for this program.

2005-06 MAP Start-Up Formula Approved - Agenda Item 7

The 2005-06 MAP start-up formula is based on the 2004-05 MAP funding level of $338 million and the 2004-05 MAP recompute formula, including the tiered reduction factor concept first introduced last year. The 2005-06 start-up formula reflects a conservative approach to avoid the need to further reduce MAP awards in the recompute formula after the state budget is finalized. The primary change from the current 2004-05 formula is an increase in the reduction factors for Expected Family Contribution (EFC) ranges. One benefit of applying a tiered reduction factor is that no awards are completely eliminated. As is currently the case, no awards will be provided for applicants who have an EFC equal to or greater than 9,000.

We anticipate start-up for 2005-06 MAP and the Silas Purnell Illinois Incentive for Access (IIA) Program to be implemented in mid-February, including the launch of the 2005-06 MAPnet system. ISAC will notify you via the College Zone Web site and this e-Messaging service once an exact date for start-up implementation has been determined.

FY2006 Appropriated Funds Budget Request Approved - Agenda Item 6

The ISAC State Fiscal Year (FY) 2006 budget request totaling $668.6 million, which will impact programs for the 2005-06 academic year, was approved by the Commission and will now be submitted to the Illinois Board of Higher Education (IBHE). This budget request is based on one priority: continuing support for need-based aid to promote affordability and access.

Action Taken on Various Administrative Rules

These items were brought before the Commission and had the results indicated.  

• Agenda Item 11 - The Commission approved and adopted the rules for the Americans with Disabilities Act Grievance Procedure with an anticipated effective date of approximately February 1, 2005.
• Agenda Item 12 - The Commission approved and adopted the amendment for the Illinois Veteran Grant (IVG) Program with an anticipated effective date of approximately February 1, 2005.
• Agenda Item 13 - The Commission was informed that amendments are being proposed to 10 different Parts of the ISAC Rules with a 45-day public comment period initiated when they are published in the Illinois Register. Full text of the proposed amendments and notices will be made available at collegezone.com following the publication date. The anticipated effective date of these proposed amendments is July 2005.

FAFSA, Financial Aid, and Careers Chat Event - January 11, 2005
Sent on January 4, 2005

Lenders and Servicers: Please share the following information with your student loan borrowers.

On Tuesday, January 11, 2005, Mapping Your Future will offer a "FAFSA, Financial Aid, and Careers" chat from 6 to 7 p.m. (CT). The chat is designed to help students and their families get answers to financial aid and career questions and receive assistance with completion of the Free Application for Federal Student Aid (FAFSA).

During this "FAFSA, Financial Aid, and Careers" Chat Event, participants will learn about:  

• completing the FAFSA;
• determining eligibility for federal student aid;
• calculating financial need and the expected family contribution;
• paying for school; and
• choosing a career.

You can access Mapping Your Future by selecting "Mapping Your Future" from the Helpful Links page that is located in the "Resources" section of the Lender Zone.

Students can use the link on the right side of the Student Zone front page.

Mapping Your Future can also be accessed directly at mapping-your-future.org.

The calendar of upcoming Chat Events is in the Outreach Activities section of College Zone, which can be accessed in the center of the College Zone home page. Remember, also, that a poster (in .pdf format) listing 2004-05 Chat Events is available via the "Live Chat Events" page of the Mapping Your Future Web site. You may wish to consider printing (on 8½" x 11" paper, in color or black & white) and displaying this poster in areas that can be easily viewed by individuals seeking information about the college process.

Archived Questions and Answers from earlier chats can be accessed by visiting the section entitled "Chat Transcripts" at mapping-your-future.org/services/chatnight.htm.

The above is based on information from a Mapping Your Future E-Update. Mapping Your Future is a national collaborative public service project of the financial aid industry, including ISAC - bringing together the expertise of the industry to provide free college, career, financial aid, and financial literacy services for schools, students, and families.

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Electronic ISAC Update for December 2004 Available at College Zone
Sent on January 3, 2005 

The December 2004 edition of the ISAC Update is now available for your review within the ISAC Publications section of College Zone's e-Library. This version of the monthly electronic ISAC Update is a compilation of e-Messages sent to Lenders and Servicers in December via College Zone's e-Messaging service.

Topics covered in the December 2004 ISAC Update include:

• Conducting a Financial Aid Presentation - In Spanish! (Dirigir una Presentación de Ayuda Financiera – En Español)
• Loan Consolidation Chat Event - December 14, 2004
• Electronic ISAC Update For November 2004 Available At College Zone

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