Ten years after its latest reauthorization and after five years of deliberation, both chambers of Congress overwhelmingly passed the Higher Education Opportunity Act of 2008 at the end of July. The first complete reauthorization of the Higher Education Act since 1998 contains many key provisions that will change the way that business is conducted by colleges, lenders, and guarantors and will have long-lasting effects throughout the industry. NASFAA has summarized the provisions of the bill, which can be found on their website. Some of the highlights of their summary include the following*:

Ethics and Transparency in the Student Loan Sector

• Includes provisions that prohibit lenders, guaranty agencies, and colleges from offering or accepting payments, gifts, and other inducements as a condition of making student loans.
• Requires colleges to establish and follow a code of conduct with respect to student loans.
• Requires colleges that identify "preferred lenders" to place at least three lenders on the list, and clearly explain to students why the college believes the lender is offering attractive terms and conditions.
• Creates a student "self-certification" process for non-federal private educational loans, to ensure that students maximize low-cost federal aid first and prevent students from borrowing more private loans than they need to cover the cost of college.
• Requires lenders to guarantee the terms and conditions they offer to a prospective private education loan borrower for 30 days after the borrower's loan application is approved, and allows borrowers to cancel a private education loan, without penalty, within three days after the loan is consummated.
  
  

Grant Aid for our Needy Students

• Increases the Federal Pell Grant maximum from $4,800 to $6,000 for 2009 and to $8,000 for 2014.
• Allows low-income students, for the first time, to receive Pell Grants year-round, to help them accelerate the completion of their degrees.
• Creates the Grants for Access and Persistence (GAP) program, a new matching grant program to allow states to increase need-based grant aid to students.
  
  

College and Textbook Costs

• Provides more transparency about college costs by requiring the Department of Education to publish detailed data about college pricing trends on its Web site.
• Requires the top 5% of colleges that have the greatest cost increases over three years for their sector to submit detailed reports to the Secretary of Education explaining why their costs have risen, and what steps they will take to hold costs down.
• Requires textbook publishers to "unbundle" materials so students can purchase only those materials they need for their classes, and requiring colleges to make more detailed information about textbooks available on their online course catalogs.
  
  

Federal Financial Aid Application Process

• Immediately creates a new 2-page EZ-FAFSA for low-income students, and requires phasing out the current 7-page FAFSA for all applicants within 5 years.
• Initiates a pilot program to find with new ways to further simplify the financial aid application process. The pilot will allow students to receive an aid determination or estimate in their junior year of high school, and encourage the Department of Education to work with the IRS to share tax data that can be used to pre-populate students' financial aid application forms.

As the bill is signed into law, Overture's innovative products and solutions can assist financial aid administrators in complying with the new requirements and ensuring that their students receive the best financial aid experience possible.

• Payment Planner helps aid administrators guide their students through the process of funding their education by displaying a wealth of information about the financial aid process on the web. This web based, self-service financial aid solution provides students with easy-to-understand guidance, instructions, and tasks, and can be customized to include links to other valuable financial aid sites. Payment Planner is available 24/7, continually guiding students even when the financial aid staff is not available.
• Student Loan Marketplace makes it easy for colleges and universities to provide their students with a transparent and direct comparison of their loan options with complete details about each participating lender’s loan products. Smart borrowing practices are encouraged, such as always exhausting scholarships, grants, and federal aid before applying for private loans, and using a co-signer for private loans when possible.
• The Marketplace also preserves the advisory role of aid administrators by allowing them to rate lenders and loan products with full transparency and justification in a system that fully complies with the Higher Education Opportunities Act and New York State’s SLATE law.
  
  

Payment Planner and the Marketplace are easily customizable to enhance the student’s experience while providing easy-to-understand advice that is applicable to their current situation. Overture’s products assist colleges and universities in providing their students with the necessary information to make the best decisions possible for their individual financial situations.

To learn more about how your institution can benefit from Payment Planner and the Student Loan Marketplace, contact Overture at davidkirby@overturecorp.com or by calling (301) 492-2155.

*Summaries from NASFAA News (http://www.nasfaa.org/publications/2008/gheapass073108.html)