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PublicationDate: 1/11/96 Summary: Direct Loan Update Author: DLTF - Direct Loan Task Force Jan 11 -------------- DIRECT LENDING -------------- The week after Thanksgiving, Secretary Riley published in the Federal Register 3 new sets of final regulations for the Direct Loan program. They're designed to 1) revise the program's income contingent repayment option to discourage overborrowing & encourage repayment, 2) improve the program's fiscal & administrative oversight, and 3) establish safeguards against excessive defaults at participating schools. Among other changes in the income contingent repayment option, the Department simplified the existing repayment calculation provisions, made the repayment plan more sensitive to family size & total amount of debt, & eliminated the discrepancy between married & single household heads when determining monthly payment amounts. The new regulations will take effect July 1, 1996. The Direct Loan program was the focus of a November 30th White House press conference to reiterate the Administration's commitment to direct lending in the federal budget reconciliation negotiations. Deputy Secretary Kunin represented the Department at the event, which also featured remarks by the presidents of American University, the American Council on Education (ACE), the National Association of Independent Colleges & Universities (NAICU), the American Association of State Colleges & Universities (AASCU), & the United States Student Association (USSA). |