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College Tuition Tax Deduction Extended Yesterday, President Bush signed into public law the Tax Relief and Health Care Act of 2006. The legislation will revive and retroactively extend for two years the college tuition deduction for students and families. Specifically, the college deduction authorizes taxpayers with incomes of $65,000 or less ($130,000 for couples filing a joint return) to deduct $4,000 for higher education costs. The deduction is $2,000 for those earning up to $80,000 ($160,000 with joint returns). The tax extension package also includes a two-year extension of the research and development credit for businesses and the state sales tax deduction, among others. In a speech prior to the signing the legislation, Bush stated: “To keep America competitive in the world economy, we must make sure our people have the skills they need for the jobs of the 21st century. Many of those jobs are going to require college, so we're extending the deductibility of tuition and higher education expenses to help more Americans go to college so we can compete.”
David A. Feitz Named Executive Director of the Utah Commissioner of Higher Education Richard E. Kendell announced Thursday he has appointed David A. Feitz as the next Executive Director of UHEAA. Currently, Mr. Feitz is UHEAA’s Associate Executive Director for Policy and Development. In addition to being Executive Director of UHEAA, Mr. Feitz will serve as Associate Commissioner for Student Financial Aid. Mr. Feitz will replace Dr. Mark Spencer, who has served as Executive Director for the past two and one-half years while also serving as Associate Commissioner for Finance and Facilities, where he will continue to serve. UHEAA administers Utah's student financial aid programs and is a subsidiary of the Utah System of Higher Education. “UHEAA plays a vital role in helping students have access to higher education opportunities. I am pleased to announce that David has agreed to accept this appointment,” Commissioner Kendell stated. “He has had a distinguished career with UHEAA and will continue to work to further strengthen Utah’s financial aid programs.” Prior to being named Associate Executive Director for Policy and Development, Mr. Feitz served as Vice President of Marketing for the Loan Servicing Corporation of Utah from 1981 to 1987. Previously, he was a Financial Aid Administrator at Brigham Young University as well as a being a consultant with the U.S. Department of Education. He earned a Bachelor of Science Degree in Business Education from Brigham Young University in 1978 and a Master of Business Administration (MBA) from Utah State University in 1979. He and his wife, Robin, are the parents of five children.
THE 2006 COMMON MANUAL and The Common Manual Governing Board is pleased to announce the 2006 Common
Manual: Unified Student Loan Policy has been released and a new Web site is up and running,
starting today! Paper copies and the e-Collection CD's are being mailed now to our program
participants by their individual guarantors. As explained in a May 2006 press release, the delay of
the normal July 2006 release was to include as many changes as possible resulting from the Higher What is the Common Manual Web site?
PLUS Loans Now Available to Graduate/Professional Students Under new federal legislation, graduate and professional students can get PLUS loans beginning with the 2006-07 academic year. Eligibility: Graduate and professional students may qualify for a PLUS loan on their own behalf after their maximum Stafford subsidized and unsubsidized eligibility has been met. To be eligible to borrow under the Federal PLUS Graduate/Professional Loan Program, your lender will review your credit history to make sure you do not have “adverse credit”. Fees: Your lender may charge a loan origination fee of up to 3% of the loan amount. UHEAA offers some of the nations leading borrower benefits, including not charging the Guarantee Fee to PLUS loan borrowers and crediting the full Origination Fee charged by you lender back to your account. Also, UHEAA offers a 1.25% reduction in the PLUS loan’s interest rate for having payments made automatically from your bank account. After the first 48 monthly payments are received on-time, the interest rate is automatically reduced by another 2%. Visit the UHEAA Borrower Benefits web page for more information. Interest Rate: Effective July 1, 2006 all new PLUS loans will carry a fixed rate of 8.5%. Borrowing Limits: The maximum amount a graduate or professional student may borrow is the cost of attendance, as determined by your school, minus other financial aid received. Repayment: A PLUS loan is disbursed in two or more installments with repayment beginning 60 days after the final disbursement. There are forbearances and deferments available to those who qualify, contact a UHEAA customer service agent at 1-877-336-7378 for more information.
Higher Education Reconciliation Act (HERA) A new federal law (Higher Education Reconciliation Act (HERA) – Public Law 109-171) makes several changes in federal student-loan programs. If you already have student loans or plan to take out federal student loans for the 2006-2007 academic year, you should review the following items that may affect the terms of your loans. Many of the changes took effect July 1, 2006. Interest Rates Stafford Loans: HERA made no change in federal law that calls for a change from variable interest rates to a fixed rate of 6.8 percent for Stafford loans first disbursed on or after July 1, 2006. Loans disbursed prior to that date continue to carry variable interest rates that adjust annually on July 1, based on the rate of the 91-day Treasury bill. PLUS Loans: HERA increased the fixed interest rate on Federal PLUS loans first disbursed on or after July 1, 2006, to 8.5% from 7.9%. PLUS loans disbursed prior to that date will continue to carry variable interest rates that adjust annually on July 1. Fees Prior to July 1, 2006, Stafford- and PLUS-loan borrowers were assessed fees of up to 4 percent of the loan amount. The passage of HERA made the following changes in those fees. Federal Default Fee: HERA requires the collection of a 1-percent fee to offset the cost of loan default. UHEAA pays this fee on your behalf. Origination Fee: The Origination fee for Federal Stafford loans are being phased out. The maximum origination fee is reduced to 2 percent from 3 percent for Federal Stafford loans first disbursed on or after July 1, 2006. The origination fee will be reduced in annual increments of 0.5-percentage points until it is eliminated by July 1, 2010. The PLUS-loan origination fee remains unchanged. UHEAA currently pays the Origination Fee on your behalf. Loan Limits Beginning, July 1, 2007, undergraduate and graduate students will be able to borrower more through the Federal Stafford-Loan program. Undergraduate Students . The maximum annual loan limit for first-year undergraduate students will increase to $3,500 from $2,625. The annual loan limit for a second-year undergraduate will increase to $4,500 from $3,500. Graduate/Professional Students . The unsubsidized loan limit will increase to $12,000 from $10,000. PLUS Loans for Graduate/Professional Students Prior to HERA, PLUS loans were available only to parents of dependent undergraduate students. With the passage of HERA, PLUS loans are now available to graduate and professional students. PLUS loans are federally sponsored loans that usually provide more favorable rates and other benefits than private, non-federally sponsored loan programs offer. A PLUS Loan allows borrowers to receive funds equaling the total cost of attendance, less any other financial aid received. The borrower must pass a credit check to take out a PLUS Loan. PLUS loans are unsubsidized, making the borrower responsible for the interest on the loan. PLUS loans offer no grace period and the first payment is due 60 days after the loan is disbursed. Disbursement Waivers of multiple disbursements . Under most circumstances, loans were paid out to the school in more than one installment. In addition, first-time borrowers who were also first-year students, were required to wait 30 days for the first loan disbursement. If the student’s school had a low student-loan-default rate, HERA provides waivers from these disbursement requirements. This change was effective as of Feb. 8, 2006. Teacher Loan Forgiveness HERA extended provisions for expanded loan forgiveness available to certain teachers. Rehabilitation of Defaulted Loans If you’re in default on a federal student loan, you may qualify to rehabilitate your loan. Rehabilitation can be beneficial by removing the reporting of your default to national credit bureaus and restoring your account to repayment status. The new law makes it easier for you to qualify for a rehabilitation loan by permitting you to make nine voluntary, on-time payments within a 10-month period, rather than the previous requirement of 12 consecutive, voluntary, on-time monthly payments. Wage Garnishment HERA increased the percentage that may be withheld through wage garnishment to 15 percent from the previous level of 10 percent, If a student loan is in default Consolidation Loans Loan consolidation permits federal student-loan borrowers to collapse multiple student loans into a single loan, and extend the period for paying back the loan depending on the borrower’s total education debt.
Deferment – Military Service Deferments permit borrowers with special circumstances, for example, economic hardship, unemployment, or enrolled in school, to temporarily postpone student-loan payments. HERA added a new category of borrowers who may qualify for deferment. Effective July 1, 2006, those student loan borrowers currently serving in the military on active duty during a war or other military operation, or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency, may qualify to defer payments on loans that were disbursed on or after July 1, 2001.
Interest Rates For Fiscal Year 2006-2007 Effective July 1, 2006 all new Federal Family Education Loan Program (FFELP) loans will carry a fixed interest rate. For loans first disbursed on or after July 1, 2006 the following rates will apply: Stafford, both subsidized and unsubsidized in-school, grace, deferment, repayment or forbearance: 6.8% PLUS Loans (FFELP): 8.5% The U.S. Department of the Treasury held an auction of the 91-day U.S. Treasury bills on Tuesday, May 30, 2006. The bond equivalent rate of these notes determines FFELP rates for the coming fiscal year for variable rate loans first disbursed between July 1, 1998 and June 30, 2006. The variable Stafford and PLUS loan interest rates for the period July 1, 2006 through June 30, 2007 will be as follows: Stafford, In-school, grace and deferment periods: 6.54% Stafford, Repayment and forbearance periods: 7.14% PLUS Loans: 7.94% These rates will also affect the weighted average interest rate for such loans that may be consolidated during the next fiscal year.
UHEAA Offers No Fee Loans with Partner Lenders In partnership with participating Utah student loan lenders, the Utah Higher Education Assistance Authority (UHEAA) will offer no fee loans to student borrowers. Student borrowers will pay no fees, allowing them to receive the full amount borrowed to pay for higher education expenses. UHEAA will continue to pay the one percent guarantee fee (renamed default fee by the recent reconciliation legislation). UHEAA partner lenders will not charge the origination fee up front and will be reimbursed by UHEAA for the origination fee when the lender sells the loan to UHEAA. Click here for a timetable showing the date the loan origination fee will be eliminated for each UHEAA partner lender.
Budget Reconciliation Passes: Student Loans Costs to Increase By a narrow vote of 216-214, the U.S. House of Representatives voted in favor of the $39.6 billion S.1932, the Deficit Reduction Act of 2005, legislation that includes $12.7 billion in cuts to student loans. The measure will next move to the President for signature into public law. To view a Deseret News article, click here
Washington Mutual to Discontinue Education Loans Washington Mutual has notified UHEAA that it will be leaving the education lending arena in order to concentrate efforts in other key areas of banking. Effective February 28, 2006, Washington Mutual will no longer accept new applications for education loans. Any current loans that are not fully disbursed will still be funded by Washington Mutual and disbursed as scheduled. Students requesting Washington Mutual as their lender should be provided with the name and lender code of the other participating UHEAA partner lenders for any new loans to be processed on or after February 28, 2006. Please refer to UHEAA's web site for a list of current partner lenders, click here. For further information, please contact Washington Mutual at 800.433.2476 or UHEAA Borrower Services at 877.336.7378.
UtahMentor.org Records Over One Million Hits During October UtahMentor, Utah's premier online guide for career and college planning, sponsored by UHEAA, continues to grow in terms of student usage. Since it's inception in June of 2002, UtahMentor has received an impressive 17 million hits, over 500,000 separate visits, with 3.5 million pages viewed. An incredible total of 75,000 students across Utah have established online UtahMentor accounts over the last 3 years, allowing them to take advantage of interactive online services such as, career exploration and planning, college campus tours, ACT/SAT test prep, search scholarships, "FAFSA on the Web," apply for admissions online, and research college majors/programs. Prospective students can use their customized account to save, store, update, and change their information in the system, as it relates to their personal college plan and goals. UHEAA is launching a new design for UtahMentor in the very near future with updated information, navigation, and user guides, so log on to UtahMentor today, at www.utahmentor.org, because now is the time to start preparing for your future.
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