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• SAFRA Still Stalled, ECASLA Extension Gaining Support
• College Student Wins Scholarship While Learning Personal Finance Skills
• Private Education Loan Applicant Self-Certification Form Now Available
• Armed Forces Personnel Providing Disaster Relief in Haiti May Qualify for Military Service Deferments
• New Credit Card Rules Affect Institutions
• March Lessons for Life Webcast
• Dollars and Sense
• Compliance Corner
• Did You Know...
• Team NSLP: Recruiting Winners
• Calendar of Events
• This and That and On That Note
• Subscribe to Newsbriefs

 

SAFRA STILL STALLED, ECASLA EXTENSION GAINING SUPPORT
As colleges begin packaging awards for the fall, there is still uncertainty about what, if any, changes to financial aid may happen this year.

The Student Aid and Fiscal Responsibility Act (SAFRA) is stalled in the Senate as a result of the continuing debate about health care reform. The Senate Health, Education, Labor and Pensions Committee has not released its version of SAFRA, nor has it provided any timelines when a bill might be ready. Once the bill is released it still has to go through mark-up, debate and deliberation on the Senate floor before the process of reconciling any differences with the House-passed version of SAFRA can begin.

Last November, bills to extend the Ensuring Continued Access to Student Loans Act (ECASLA) were introduced in both the House and Senate to preserve critical funding for the Federal Family Education Loan Program. This legislation continues to gain support among Democrats, including Senators from Nebraska, Florida, Indiana, Delaware and Arkansas. In addition, dozens of colleges and financial aid groups have written to their lawmakers to express concerns about transitioning to Direct Loans and to support extending ECASLA.

As the debate over the future of financial aid reform ensues, NSLP continues to advocate for the preservation and funding of the critical school and student support services that are now provided by non-profit guaranty agencies. Regardless of the loan programs they use, schools will continue to need training and default management assistance; and students will continue to need financial aid education, financial literacy education, repayment assistance, delinquency prevention and default rehabilitation services.

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COLLEGE STUDENT WINS SCHOLARSHIP WHILE LEARNING PERSONAL FINANCE SKILLS

Kristina Wright, a student at Midland Lutheran College in Nebraska, earned a scholarship to help her pay educational expenses while she learned how to make better financial decisions.   Wright completed personal money management courses using NSLP's free Financial Literacy Online program and was entered in a drawing to win the scholarship. The program includes courses in budgeting, contracts, credit, credit history, financing education, identity theft, insurance, and starting a business. The courses are designed to be taken individually so users can select the topics they need and complete them at their own pace.

Wright successfully finished six courses, each taking about an hour. Her test scores show she increased her financial knowledge. “I wanted to learn more about loans and credit,” says Wright. “The program gave me good ideas about smart ways to handle money.”

Financial Literacy Online is designed to help college students learn vitally important financial management concepts they might not learn elsewhere.

The scholarship was offered in conjunction with Nebraska Financial Literacy Week in November. During this event, NSLP co-sponsored financial education seminars at 18 college campuses throughout the state and provided the scholarships as an additional incentive for students to learn critical personal finance knowledge.

Financial Literacy Online is one part of NSLP’s comprehensive financial literacy program, which includes 30 on-campus educational presentations for college students and administrators, and the popular Lessons for Life series, which provides campus administrators with information that helps them counsel students on personal finance issues.

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PRIVATE EDUCATION LOAN APPLICANT SELF-CERTIFICATION FORM NOW AVAILABLE
On February 14, the Department of Education (ED) issued Dear Colleague Letter GEN-10-01 announcing the approval of the Private Education Loan Applicant Self-Certification form for use by schools and private educational loan lenders to satisfy the requirements of section 487(a)(28) of the Higher Education Act of 1965, as amended (HEA) and section 128(e)(3) of the Truth in Lending Act (TILA). 

Beginning February 14, schools are required to provide the Self-Certification form, and the information needed to complete the form, to an enrolled or admitted applicant (or to the parent applicant of an enrolled or admitted student) upon the applicant’s request for a private education loan Self-Certification form.

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ARMED FORCES PERSONNEL PROVIDING DISASTER RELIEF IN HAITI MAY QUALIFY FOR MILITARY SERVICE DEFERMENTS
Student loan borrowers on active duty in the armed forces who are providing disaster relief in Haiti may qualify for military service deferments. A “military operation” is a contingency operation as defined in 10 U.S.C. 101(a)(13). Contingency operations may include “major humanitarian assistance efforts,” see Chapter 1, Section 1-1 in the Department of the Army Personnel Policy Guidance for Overseas Contingency Operations.

On January 16, President Obama signed an executive order authorizing a call to active duty under 10 U.S.C. 12304 for members of the Reserves to conduct operational missions related to relief efforts in Haiti. These relief efforts have been designated Operation Unified Response, which has been declared a “contingency operation.” Therefore, otherwise eligible borrowers serving on active duty in support of Operation Unified Response, or performing qualifying National Guard duty in support of Operation Unified Response, may qualify for military service deferments.

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NEW CREDIT CARD RULES AFFECT INSTITUTIONS
The Credit CARD Act signed by President Barack Obama on May 22, 2009, puts new rules in place to help consumers better understand the cost of borrowing and provides more consumer protections. Several new requirements went into effect on February 22, 2010.

Creditors are prohibited from offering a student at any institution of higher learning any tangible item to induce the student to apply for a credit card if the offer is made on the campus, near the campus, or at an event sponsored by or related to the institution.

Institutions of higher learning are also affected by the act’s new consumer protection rules:

• Institutions must publicly disclose any contract or agreement made with a card issuer or creditor for purposes of marketing a credit card.
• Institutions should require creditors to disclose to the institution where credit cards will be marketed on campus.
• Institutions should limit the number of locations on campus where credit cards may be marketed.
• Institutions should offer credit card and debt education, as well as counseling sessions, as a regular part of new student orientation.

NSLP offers many free on-campus educational seminars on credit cards and debt management for college students to help institutions comply with the Credit Card Act requirements. Seminars are presented by NSLP’s accredited financial counselors and include “Smart Credit — Choosing & Using Credit Cards,” “Budget? What Budget?” and many more.

Financial Literacy Online includes brief courses on using credit cards and budgeting. Students may complete the free self-paced courses at their convenience.

NSLP’s January 27 Learning Links webinar includes information about the new Credit Card Act. The prerecorded session is available free online and includes technical resources and FAQ.

To find out more about how NSLP can help you with credit card requirements or with money management education for your students, contact Mark Krings, regional vice president, by e-mail or at 800.735.8778, ext. 6835.

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MARCH LESSONS FOR LIFE WEBCAST
NSLP’s Lessons for Life webcasts provide campus administrators and financial counselors with valuable personal finance information and resources to help them assist their students/borrowers or clients who have money management questions or issues. Join us from the convenience of your own office for the free sessions!

Accredited Financial Counseling: Certification that Matters

How do you feel when students or clients approach you with money management questions? Do you feel comfortable that you have the knowledge and resources to assist them? If you'd like to round out your knowledge and experience, take a little time to learn about becoming an accredited financial counselor through the Association for Financial Counseling and Planning Education (AFCPE).

Join AFCPE Executive Director Gordon Genovese as he offers perspectives about the benefits of becoming an accredited financial counselor. He will walk participants through the accreditation process, touching on course topics, the certification process, and continuing education requirements.

Genovese has 14 years of experience in financial education and counseling, including coordinating the implementation of the Personal Financial Management program at 18 Marine Corps installations worldwide. He holds an M.B.A. from the University of Mary Washington, with an emphasis on adult education. 

Advanced registration is required. Don’t delay — register today!

Date: Tuesday, March 2, 2010
Time: 1 p.m. Central/2 p.m. Eastern
Register at https://nslp.webex.com/nslp/onstage/g.php?t=a&d=711720207

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Dollars and Sense

NSLP's Financial Literacy team — experts on money management issues — provide helpful tips for your students in each edition of Dollars and Sense.

DO YOU NEED GAP INSURANCE?
If you are about to purchase a new car, you might consider researching Guaranteed Auto Protection (GAP) insurance. GAP insurance will cover the difference, or gap, between the amount you owe on your car and the car’s actual cash value (ACV) in the event the car is totaled or stolen.

New cars depreciate by approximately 20 percent the moment they are driven off the dealer lot and continue to do so during the first three years of ownership. If you finance 100 percent of the price of the car or make a down payment that is less than 20 percent, you will owe more than the car is worth for a period of time. This is known as being “upside down.”

Being “upside down” can be monetarily problematic if you are faced with the total loss of your vehicle. If your car is stolen or deemed “totaled,” your insurance company will essentially write you a check for the car’s ACV, not the amount you owe. The difference between the two amounts would be your responsibility. This is where GAP insurance can help.

GAP insurance is offered by dealers, or you can cut out the middleman and purchase it online. As with most insurance policies, terms and conditions vary. Be sure to do your research! Also, check with your primary insurance provider before purchasing GAP insurance. You may already be covered under your existing policy.

Edmunds.com , a leading automotive information Web site, recommends GAP insurance on a new car for those who are:

• Financing for 72 months or more
• Rolling negative equity from a previous car loan into a new loan
• Making a down payment less than 20 percent
• Leasing a vehicle
• Purchasing a car that depreciates quickly (luxury/highly optioned)

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Compliance Corner

Compliance Corner is a recurring feature highlighting recent questions from schools and lenders. Read what your colleagues are asking, and find answers to questions you may have.

Q. If a Master Promissory Note (MPN) is used to disburse on a loan that is canceled at some point after the disbursement has been made, can subsequent loans be made with that MPN if no other loans are made within 12 months of the date the borrower signed the MPN? 

A. According to the federal regulations [34 CFR 682.401(d)(4)(v)], a lender's ability to make additional loans under an MPN will automatically expire upon the earliest of:

• The date the lender receives written notification from the borrower requesting that the MPN no longer be used as the basis for additional loans.
• Twelve months after the date the borrower signed the MPN if no disbursements are issued by the lender under that MPN.
• Ten years from the date the borrower signed the MPN or the date the lender receives the MPN. However, if a portion of a loan is made on or before 10 years from the signature date, remaining disbursements of that loan may be made.

In the scenario you described, the loan was disbursed and then canceled. Since a disbursement was made within 12 months of the MPN date, the MPN is a valid MPN and subsequent loans can be made with that MPN.

Did You Know . . .

NSLP has a brochure to help schools contact delinquent borrowers. This brochure provides helpful hints about preparing to make a phone call, calling borrowers, and reaching borrowers effectively. Order your supply today!

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Team NSLP: Recruiting Winners

At various times, NSLP scouts for qualified candidates to join its winning team. Learn more about NSLP and career opportunities online, or contact Human Resources for more information.

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Calendar of Events

View our calendar of events to find NSLP's Business Development team exhibiting and presenting at an upcoming event in your area. Stop by our booth or call 800-735-8778, ext. 6618 for a personal consultation to learn how you can streamline your student loan process.

This and That . . .

Despite accounting for just one-fiftieth of body weight, the brain burns as much as one-fifth of our daily caloric intake.

On That Note . . .

"A man begins cutting his wisdom teeth the first time he bites off more than he can chew."
-Herb Caen

Questions or Comments?

If you have questions or comments, contact NSLP Customer Service at 800-735-8778, ext. 6300 or by e-mail at nslpcs@nslp.org.

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NSLP is a private non-profit guarantor of loans made under the Federal Family Education Loan Program. This publication is intended to provide NSLP's clients with current information on guarantor policies and procedures. The information is not intended to be legal advice. NSLP disclaims all responsibility for any claim arising from reliance on the information provided. Direct questions, copy requests or address changes to: NSLP Customer Service P.O. Box 82507, Lincoln NE 68501-2507 direct 800-735-8778, ext 6300 phone 402-475-8686 fax 402-479-6658  e-mail nslpcs@nslp.org

Editors: Christian Wilbeck and Amanda Boltz

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