Monday, July 16, 2012

Recent Updates

Here we are after July 1, so that means new rules are now in effect. So what have been the newest changes?

  1. A new change which is nothing new but has had no publicity is that fees on federal Stafford loans. On the Subsidized, Unsubsidized, and PLUS loans, there were fees but some part of the fees had been part of a rebate. Well, the rebate is gone so the fee goes up now. Last year, the fee was .5% on Subsidized and Unsubsidized, but now it will be 1%. PLUS loans last year were 2.5%, but now they will be 4%.
  2. At seemingly the last minute Congress finally passed the extension of the Subsidized interest rate on June 29. It was signed into law the first week of July. This extension ensures that the Subsidized loan's interest rate will remain at 3.4% until June 30, 2013.
  3. The biggest news comes last. On June 30, a ruling was given from a federal district judge on the lawsuit between APSCU and the Dept of Education regarding the Gainful Employment rules. Although the Dept of Ed has 60 days from the ruling to appeal (and from the sound of it, it seems like they will), the career-focused sector of higher education treats this as a victory. Our of the four main parts, three were struck down and one was upheld. The one that was upheld was the Disclosures (cost, completion rate, placement rate, median loan debt, etc.). The one part of the rule that was struck down was the Metrics, which schools had to reach to remain eligible to continue receiving FA. The judge stated that the Dept of Ed hadn't fully explained how it had come up with its figures, so the judge struck down the rule. The other two (new program approval process and Reporting) were struck down since they were dependent on the Metrics.
There have been some major changes. These are the largest ones. Those of us in the for-profit sector hail Rudolph Contreras's ruling in favor on 3/4 of the GE rules. Much of the industry isn't upset about the Disclosure rule not being struck down; in fact, we wish all schools would be held to that standard. It would surprise a lot of people to know the numbers on most of the large public schools.

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