Congress Passes Landmark Student Aid Legislation — EDFUND is Prepared to Help You through It

After months of debate, weeks of negotiations and threats of a presidential veto Congress agreed to a reconciliation package to meet FY08 budget reconciliation instructions.

Significant concessions were made during the negotiations between the House and Senate:

• Senators agreed to include the House's costly interest rate reduction on subsidized Stafford Loans
• The House cut most of the new, smaller mandatory spending programs that many Senators and the President opposed.

In the end, Democrats moved the bill with moderate Republican support and the President has agreed to sign it.

• On one side of the equation the College Cost Reduction and Access Act (CCRAA) provides increases to Pell Grants, implements new benefits for federal loan borrowers and adjusts the needs analysis formula to better reflect current socio-economic realities.
• On the flip side, the legislation pays for these new programs by making significant cuts to the FFEL program, the effects of which remain to be seen.

The Department of Education will be moving quickly to provide guidance on implementing the CCRAA changes. During a recent meeting with the Washington, DC-based higher education associations, Assistant Secretary for Postsecondary Education, Diane Jones, noted that the negotiated rulemaking process for the new law will begin November 2 — the day after the final rules are published for the regulatory packages negotiated earlier this year.

On the program side, these changes come on the heels of a challenging period when the financial aid community worked to implement changes resulting from the Higher Education Reconciliation Act (HERA). With many of the CCRAA provisions taking effect October 1, 2007, financial aid professionals face the challenge of ensuring that all eligible students benefit from these new programs.

EDFUND is working to help you do just that.

Beginning in early October, EDFUND will offer a series of free Webcasts focused on the new provisions contained in the CCRAA. Our Government Relations team will provide you with the information and tools to understand and implement the new programs. See below……..

Navigating the New College Cost Reduction and Access Act (CCRAA)

The soon-to-be enacted College Cost Reduction and Access Act (CCRAA) provides increases to Pell Grants, implements new benefits for federal loan borrowers and adjusts the needs analysis formula to better reflect current socio-economic realities.

For financial aid administrators, these changes come on the heels of a challenging period when the financial aid community worked diligently to implement changes resulting from the Higher Education Reconciliation Act (HERA). With many of the CCRAA provisions taking effect October 1, 2007, financial aid professionals face the challenge of ensuring that all eligible students benefit from these new programs. EDFUND is working to help you do just that.

EDFUND is pleased to offer a series of free one-hour Webcasts focused on the new provisions contained in the CCRAA. Our Government Relations team will provide you with information and tools to understand and implement the new programs.

• Webcast — Navigating the New Federal Regulations

Space is limited, so sign up today!

One hour Web Seminars are available on:

To register go to www.edfund.org/efins/

Service You Can Always Depend On

For over a decade, EDFUND has built its business on providing exceptional service. We push ourselves and pride ourselves on delivering exceptional service to our students, schools and lender partners. Survey after survey has confirmed that you recognize and value this hallmark of EDFUND. No matter what the circumstance or challenge, this tenet is key to who we are and who we will always be.

As some of you may be aware, Governor Schwarzenegger has included the sale of EDFUND as part of the 2007-08 budget. What this means is that the Department of Finance is authorized to begin the process of hiring a sale advisor to explore the option of a sale of EDFUND. In addition to a conventional sale option, the Department of Finance, in consultation with the state treasurer, may also explore an alternative arrangement to a traditional sale. The sale process must follow state procedures and will not be a quick endeavor.

The Department of Finance has expressed confidence in EDFUND and a desire to maintain the integrity of the organization. EDFUND will work side-by-side with the Department of Finance to shape the process. We are extremely optimistic about the future and our ability to continue serving students, schools and the financial aid community.

EDFUND remains confident in the strength of its reputation for providing superior service, the resourcefulness and resilience of our people, and the ways in which our unique service model benefits schools and borrowers.

Our commitment to students, schools and the industry has been a cornerstone of our existence. Equally, I remain committed to keeping you informed as significant milestones are reached during this process.

Samuel M. Kipp
President

Financial Aid Differences Persist Across Racial/Ethnic Groups

A new report shows that larger numbers of minorities have completed high school and continued their education in college. However, differences persist in certain areas of education performance, including the allocation of financial aid.

According to Status and Trends in the Education of Racial and Ethnic Minorities by the National Center for Education Statistics (NCES), in the 2003-04 school year, the amount of financial aid received by undergraduate students varied by racial/ethnic group.

• In 2003-04, a higher percentage of Black undergraduate students received financial aid than did White, Hispanic, and Asian/Pacific Islander undergraduates:
• 89 percent of Black undergraduate students
• 81 percent of Hispanic students
• 74 percent of White students
• 66 percent of Asian/Pacific Islander students

• In the 2003-04 school year, Black students received higher average amounts of total aid than White and Hispanic students:
• Black students received $10,500
• White students received $9,900
• Hispanic students received $9,000

• There were no differences between races/ethnicities in average amounts of loans received.
• White, Black, Hispanic, and American Indian/Alaska Native undergraduates received larger amounts of aid in the form of loans than grants.
• Hispanic students had a lower average amount of aid than did White, Black, and Asian/Pacific Islander students.
• Asian/Pacific Islander students received the highest amount of aid in the form of grants ($6,700).

• The average amount of aid in any form awarded to White, Black, and Hispanic students increased from 1999-2000 to 2003-04.
• Over the same period, Black and Hispanic students experienced increases in aid in the form of both grants and loans
• White and Asian/Pacific Islander students experienced significant increases in aid through loans, but not grants.

Status and Trends in the Education of Racial and Ethnic Minorities - the National Center for Education Statistics: Indicator 24: Financial Aid

Dear Partner.....Letters for you

ANN-07-17
This letter announces Federal Student Aid's 2007-08 online, instructor-led training sessions on Improving Direct Loan Processing.

This intermediate level class will focus on improving processing and resolving issues with Direct Loans using Federal Student Aid's Direct Loan Electronic Master Promissory Note, Common Origination and Disbursement, and Direct Loan Servicing Online Web sites. In addition, there'll be a brief overview of the Direct Loan Tools software.

GEN-07-05
This letter clarifies whether institutions must comply with Federal Freedom of Information Act (FOIA) or state freedom of information law requests.

Institutions that participate in the Title IV, HEA programs are not subject to the Federal FOIA and therefore are not required to release any student information under this law.

The Department reminds schools that the Federal Family Educational Rights and Privacy Act requirements apply regardless of the reason for releasing student information.

•  Previous Dear Partner Letters can be viewed by visiting Link-Source on our Web site.

How Did We Do?

Please let us know how we can improve EDFUND LINK -Your Connection to Education News. Send an e-mail to EDFUND.