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VOL. 26, NO. 12L
June 2009
Welcome to the June 2009 ISAC Update for lenders and servicers, which is a compilation of e-Messages sent through College Zone’s e-Messaging service throughout June. 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 800.477.4411 and speaking with one of the following staff members:
- Sharon Bankston, extension 2826
- David Barinholtz, extension 2822
- Denise Cannon, 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.
MULTIPLE SUBSCRIPTION GROUPS
Commission Meeting Summary
Sent to Marketing News, Announcements and Operational Updates, Announcements on June 30, 2009
The following are highlights of action taken by the Illinois Student Assistance Commission (ISAC) at its June 26th meeting, which may be of interest to our partners in the Federal Family Education Loan Program (FFELP) community.
FY2010 Budget Spending Priorities (Agenda Item 4)
Prior to adjourning on June 1, 2009, both chambers of the General Assembly approved a budget (which has not yet been sent to the Governor for action) reducing ISAC's FY2010 appropriation from $440 million to $220 million. This proposed budget, when coupled with a subsequent request to manage an additional reserve of 25% of ISAC's general funds appropriation, would leave $165 million for FY2010 gift assistance programs (including loan repayment/forgiveness).
In preparation for the possibility of this scenario becoming reality, the Commission approved the following spending priorities for FY2010: $161.9 million would be applied to Monetary Award Program (MAP) for the first part of the academic year; $4.5 million would be used for the Silas Purnell Illinois Incentive for Access (IIA) Program at the start of the academic year; $1.6 million would fund the Golden Apple Scholars of Illinois Program; and $750,000 would go to fund grant programs for dependents of police, fire, and correctional officers, as required by state statute. No other FY2010 scholarship, grant, or loan repayment/forgiveness programs administered by ISAC would be paid from the state's general fund.
FFELP Servicing and Originations Contract
(Agenda Item 15)
The Commission authorized the execution and delivery of a servicing contract with Ed Financial, LLC for loan originations and servicing for ISAC's Illinois Designated Account Purchase Program (IDAPP) Federal Family Education Loan Program (FFELP) loan portfolio. Moving the servicing of IDAPP's FFELP portfolio to an outside vendor is a major component of the restructuring of ISAC to reduce costs and increase efficiency.
Other Commission Meeting Agenda Items
At its June 26th meeting, the following items were addressed as part of the agenda. Additional information regarding some of the items is provided in the June 26th Agenda Book, which can be accessed from the ISAC's Governing Board: The Commission page at collegezone.com. Specific agenda items may also be accessed by clicking on the appropriate link(s) below.
- The Commission approved and adopted the omnibus rules amendments, as modified during the rulemaking process, so that they are effective for the 2009-10 academic year. (Agenda Item 13)
- The Commission approved the following agenda items related to the College Illinois!® Prepaid Tuition Program:
Commission Meeting to be Held Friday, June 26, 2009
Sent to Marketing News, Announcements and Operational Updates, Announcements on June 19, 2009 The next regular meeting of the Illinois Student Assistance Commission (ISAC) is scheduled for 9 a.m.on Friday,
June 26th at the University of Illinois at Chicago.
Some of the items on the tentative agenda for the meeting are:
- 2009-10 (FY10) Monetary Award Program (MAP) Recompute Formula
- Approval of Fiscal Year 2010 (FY10) Budget Priorities for ISAC-Administered Gift Assistance Programs
- Monetary Award Program - Calculating MAP Recipients' Graduation Rates
- Adopted Rules Amendments
- Approval of FFELP Servicing and Originations Contract
- Issuance of Taxable Student Loan Revenue Bonds,
Series 2009
- College Illinois!® Prepaid Tuition Program Investment Policy Revisions, FY09 Marketing Report, FY10 Enrollment Period Preview, and FY10 Budget
- FY10 Internal Audit Report
The Agenda Book, providing the complete agenda and a full description of each item (including information about the current status of the FY10 ISAC Budget and possible appropriation) is available via the 2009 Agenda Books page, which is located within the ISAC's Governing Board: The Commission section of the e-Library at collegezone.com. The online Agenda Book will be updated within 1-2 business days following the meeting to reflect action taken.
ISAC staff will be conducting a Webinar for financial aid administrators on Tuesday, June 30th at 1 p.m. A Commission meeting report is one of the topics being covered.
New Student Loan Interest Rates Effective July 1, 2009
Sent to Marketing News, Announcements and Operational Updates, Announcements on June 3, 2009 The U.S. Department of Education (ED) has announced the interest rates that will be in effect for the 2009-10 academic year for fixed and variable rate Federal Stafford and PLUS loans.
Loans with first disbursements on or after July 1, 2009:
- 5.6% (fixed rate) for Federal Stafford subsidized undergraduate loans during in-school, grace, repayment, deferment and forbearance periods
- 6.8% (fixed rate) for Federal Stafford unsubsidized undergraduate loans during in-school, grace, repayment, deferment and forbearance periods
- 6.8% (fixed rate) for Federal Stafford subsidized and unsubsidized graduate loans during in-school, grace, repayment, deferment and forbearance periods
- 8.5% (fixed rate) for Federal PLUS loans (parent and graduate student borrowers)
As a reminder, the interest rate for Federal Stafford subsidized undergraduate loans will continue to decrease incrementally each year until July 1, 2012, when it is scheduled to revert to 6.8%
Loans with first disbursements between July 1, 2008 and
June 30, 2009:
- 6.0% (fixed rate) for Federal Stafford subsidized undergraduate loans during in-school, grace, repayment, deferment and forbearance periods
- 6.8% (fixed rate) for Federal Stafford unsubsidized undergraduate loans during in-school, grace, repayment, deferment and forbearance periods
- 6.8% (fixed rate) for Federal Stafford subsidized and unsubsidized graduate loans during in-school, grace, repayment, deferment and forbearance periods
- 8.5% (fixed rate) for Federal PLUS loans (parent and graduate student borrowers)
Loans with first disbursements between July 1, 2006 and
June 30, 2008:
- 6.8% (fixed rate) for all Federal Stafford subsidized and unsubsidized loans during in-school, grace, repayment, deferment and forbearance periods
- 8.5% (fixed rate) for Federal PLUS loans (parent and graduate student borrowers)
Loans with first disbursements between July 1, 1998 and
June 30, 2006:
- 1.88% (variable rate through June 30, 2010) for all Federal Stafford subsidized and unsubsidized loans during in-school, grace and deferment periods
- 2.48% (variable rate through June 30, 2010) for all Federal Stafford subsidized and unsubsidized loans during repayment and forbearance periods
- 3.28% (variable rate through June 30, 2010) for Federal PLUS loans
Another change effective July 1st is the decrease in the federal origination fee on Federal Stafford loans to 0.5% of the loan amount. The origination fee on Federal PLUS loans is not impacted and remains at 3% of the loan amount.
For more information about the new interest rates, refer to the Stafford and PLUS Loan Interest Rate chart and the FFELP Limits, Rates and Fees chart, both of which are posted in the Federal Information area of College Zone's e-Library. Feel free to print and copy the charts and use them for your own reference and/or for distribution to your students.
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ISAC UPDATE
Electronic ISAC Update for May 2009 Available at College Zone
Sent on June 1, 2009 The May 2009 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 May via College Zone's e-Messaging service.
Topics covered in the May 2009 ISAC Update include:
- Mark Your Calendar for Upcoming Important Dates
(sent May 22, 2009)
- Special Commission Meeting Scheduled for May 7th
(sent May 5, 2009)
- Electronic ISAC Update for April 2009 Available at College Zone
(sent May 1, 2009)
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