“"America is teetering on the edge of an $11.6-trillion abyss called the ‘national debt,’ a financial chasm that threatens to swallow our economic future whole. And what are our leaders doing about it? If a bill working its way through Congress is any indication, they’re insisting that they’re pulling us away from doom, while they quietly expand the monstrous hole," The Detroit News reports. "The bill is the Student Aid and Fiscal Responsibility Act (SAFRA), the focal point of which is elimination of the Federal Family Education Loan program — which uses federal bucks to back student loans from private lenders — and replacement with lending straight from Uncle Sam. But that’s hardly all it would do."

“The Georgia Lottery is one of the nation’s most successful, but it is struggling to keep up with demand for the state’s popular scholarship program,” the Atlanta Journal Constitution reports.

“For years, an article of faith in this country has been that college is the gate way to a better life. So deeply held is this belief that many students … borrow tens of thousands of dollars to attend prestigious public or private universities,” Gannett News Service reports. “But as the worst recession since World War II trudges into its 21st month, many graduates are discovering that the college payoff could be a long time coming – if it comes at all. New and prospective students, meanwhile, are abandoning their ‘dream schools’ in favor of more affordable options, forcing many colleges to work harder to justify their price of admission.”

“Like travel insurance or earthquake insurance, tuition refund insurance — a means of getting your money back if a student doesn’t make it through the school year due to an emergency — isn’t for everyone,” the Associated Press reports. “Tuition insurance is not generally recommended for college students unless the student has a serious illness that could force withdrawal from school.”

“It seems that many college and trade school students are taking out pricey private student loans when they’re eligible for cheaper federal student loans. That’s like throwing money out the window,” the St. Louis Post-Dispatch reports. “Federally backed student loans, called Stafford loans, charge 6.8 percent interest. Students who show financial need may qualify for a subsidized Stafford and pay no interest while in school, and only 5.6 percent later. The loans are guaranteed by Uncle Sam, so the lenders require no credit checks. By contrast, anything goes in the private student loan market …”

The COD Processing Update includes COD News, Reports and Data Requests, Resolved Issues, Resolved Issues In Clean Up, and Current Issues. A new edition of the COD Processing Update is posted on the COD Web site on business days when there is a change to the previously posted edition and each Friday.

This letter announces Federal Student Aid’s instructor-led, online training session on a Notice of Proposed Rulemaking published on August 21, 2009. The NPRM proposes changes to the regulations governing the Federal Pell Grant, Federal Work-Study, and TEACH Grant programs as well as changes to other institutional requirements related to the administration of all of the Title IV student assistance programs.

In June 2009, the Department announced the award of four additional servicer contracts. This announcement is the first in a series of announcements to explain the transition to additional servicer support, provide customer service contact information for our servicers, and inform the community of Federal Student Aid resources available to support the servicing-related needs of borrowers and schools. This announcement explains the transition to additional servicer support.

In response to inquiries concerning the use of State scholarships for FSEOG matching purposes, the Department has determined that all State scholarships and grants, except for Leveraging Educational Assistance Partnership (LEAP) and Special Leveraging Educational Assistance Partnership (SLEAP) awards, are eligible funds that may be used to meet the non-Federal share requirement for the FSEOG Program. LEAP and SLEAP awards, for this purpose, are defined as the LEAP and SLEAP Federal allocations plus the minimum required State-matching amounts. The balance of State grant amounts generally are considered non-LEAP and non-SLEAP awards and can be used to meet the FSEOG non-Federal share requirement.

Student Lending Analytics (SLA), an independent research and advisory firm focused on finding the best lenders for students, performed a flash survey last week to determine the prevalence of emergency loan programs at institutions and analyze the structure of these programs including term, interest rates and eligibility requirements. The survey found that given the ongoing economic challenges, more schools are emphasizing their emergency loan programs. In addition, schools should review the structure of their emergency loan programs because the Federal Reserve’s private loan regulations exempt institutional loan programs with certain characteristics.