(October 2008) On Thursday, October 23, 2008, the Department of Education issued Final Regulations in the Federal Register for the “College Cost Reduction and Access Act of 2008” (CCRAA), PL 110-84, for the FFEL, Direct Loan, and Perkins Loan programs.

The regulations will be effective July 1, 2009. The rules address income based repayment (IBR) plans, conforming the economic hardship deferment with IBR, public service loan forgiveness, the definition of a not-for-profit loan holder for SAP billing purposes, and harmonizing the waivers from the HEROES Act with other benefits provided to military borrowers.

In August, COHEAO sent a letter to the department commenting on the draft regulations enacted by the CCRAA. Specifically, COHEAO commented on the economic hardship deferment regulations.

The Department proposed to eliminate both the economic hardship deferment for a Perkins Loan borrower who is working full-time and has a 20/220 debt-to-income ratio, as well as for borrowers who are working part time and have the equivalent debt-to-income ratio. COHEAO believes that the elimination of the economic hardship deferment option will adversely affect borrowers who need this benefit the most. COHEAO recommended that Perkins Loans should remain eligible for the economic hardship deferment, as they currently are.

Back to News List | Back to Archives List