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This page provides a list of education lenders who have laid off staff or temporarily suspended or permanently exited one or more student loan programs since August 2007. (Some of these lenders may have exited FFEL or private student loan programs for reasons unrelated to the subprime mortgage credit crisis or the cuts in FFELP lender subsidies.)

Last updated: April 20, 2010.

Lender Layoffs

The total job loss estimate for the student loan industry is more than 6,573 layoffs. This estimate understates the actual total due to several lender layoffs for which no total could be obtained.

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Education lenders laying off staff (including attrition): 22 total

• Bank of America
• Brazos Higher Education Service Corporation, Academic Finance Corporation
• Campus Door
• College Loan Corporation
• CoreFirst Bank & Trust
• Edamerica
• Education Finance Partners
• FinanSure
• First Marblehead
• Goal Financial
• Illinois SAC
• Loan to Learn
• MOHELA
• NELNET, Union Bank & Trust
• National Education
• NextStudent
• PHEAA
• Sallie Mae
• Student Assistance Foundation of Montana
• Student Loan Xpress
• The Education Resources Institute (TERI)
• US Education Finance Group

Loan Program Suspensions

A total of 184 education lenders have exited or suspended their participation in all or part of the federally-guaranteed student loan program (FFELP). 119 of the lenders have suspended participation in all of FFELP (2 only out of state, 2 in selected locations and/or types of colleges and 1 just first-time borrowers) and 65 have suspended just consolidation loans (for a total of 184 suspending consolidation loans).

51 lenders have suspended private student loans. (A total of 199 unduplicated lenders have suspended federal and/or private loan programs.) MEFA had suspended their private student loan but resumed it 6 weeks later. South Carolina Student Loan restarted their Palmetto Assistance Loan in November 2009.

These totals include 29 nonprofit state loan agencies. Seven state loan agencies -- PHEAA, MEFA, MHESLA, MES, CSLF, NorthStar Guarantee and Brazos -- have suspended all FFELP originations. NorthStar Guarantee had suspended all of FFELP, but has subsequently resumed making Stafford and PLUS loans but not consolidation loans, and then suspended federal and private loans. Brazos had suspended participation in FFELP, then resumed participation and then suspended participation in FFELP a second time. Kentucky Higher Education Student Loan Corporation had previously suspended Stafford and PLUS loans for first-time borrowers, but subsequently resumed making Stafford and PLUS loans (but not consolidation loans) to all borrowers.

Every type of lender has been affected: 29 state loan agencies, 76 banks, 18 credit unions, 4 non-profit lenders, 3 school-as-lender schools (with 45 more coming soon) and 65 non-bank lenders.

The following table summarizes the marketshare of lenders suspending one or more federal loan programs based on FY2006 and FY2007 federal loan volume data in the FFEL program. It does not include lenders who suspended participation and subsequently resumed participation.

Loan Program	FY2006	FY2007
Stafford and PLUS Loans (excluding School-as-Lender schools)	28.1% $14.0 billion > 1,659,000 borrowers 31 of the Top 100	30.4% $17.3 billion > 1,851,000 borrowers 33 of Top 100
Stafford and PLUS Loans (including School-as-Lender schools)	31.4% $15.6 billion > 1,851,000 borrowers 41 of the Top 100	34.1% $19.3 billion > 2,075,000 borrowers 43 of Top 100
Consolidation Loans	93.2% $67.4 billion > 2.4 million borrowers 10 of Top 10 73 of Top 100	95.2% $45.1 billion > 1.5 million borrowers 10 of Top 10 79 of Top 100

Note that while there were more than 2,000 lenders participating in FFELP in FY06, most of the loan volume is originated by the top 100 lenders. The top 100 lenders accounted for 91.5% of FY2007 Stafford and PLUS loan origination volume and 90.8% of FY2006 Stafford and PLUS loan origination volume. The top 100 lenders accounted for 99.8% of FY2007 consolidation loan volume and 99.7% of FY2006 consolidation loan volume. The top 100 lenders accounted for 98.6% of FY2007 loan holdings and 98.5% of FY2006 loan holdings.

Most of the major lender partners of school as lender schools have ended their participation in the school as lender program, including Sallie Mae, Nelnet, PHEAA, CollegeInvest, Brazos and MHESLA, as well as six other lenders. The 45 affected schools are now looking for new lender partners, but are unlikely to find them. These schools originated $1.7 billion in Stafford loans to more than 200,000 borrowers in FY2006 (3.3% of loan volume) and include 10 of the top 100 Stafford and PLUS loan originators.

If school as lender schools are included in the totals, a grand total of 224 lenders have suspended participation in one or more FFEL loan programs.

The following table lists the lenders who have suspended one or more loan programs, with information about the types of loans they have suspended. It also includes rank information based on FY2006 and FY2007 federal loan volume data. Rank information is included only for lenders who have suspended one or more federal loan programs. If a lender has suspended only private loan programs, no rank information is included. The nonprofit state loan agencies are listed with the name of the state in brackets after the name.

Lender	What?	FY2006 Federal Rank			FY2007 Federal Rank
		Originations	Consolidations	Holdings	Originations	Consolidations	Holdings
A+ Funds/Medfunds Graduate Level	FFELP Private
Abilene Teachers Federal Credit Union	FFELP
Academic Funding Group / Provincial Bank	FFELP Private	57			78
Academic Financial Services	FFELP
Academic Loan Group	FFELP		17	31		17	23
Access Credit Union	FFELP
Access Group	Consolidation Private	11	12	13	10	21	13
Affinity Direct/Educational Direct	FFELP		19		45	4	84
Alaska Commission on Postsecondary Education [Alaska]	Consolidation		92	94		97	86
ALL Student Loan	Consolidation FFELP Outside California Private	43	42	42	36	55	37
Amarillo National Bank	FFELP
American SLC	Consolidation		91			33
American Education Services (AES) / PHEAA [Pennsylvania]	FFELP	19	7	7	19	10	6
Ardent Financial	FFELP
Arizona Higher Education Loan Authority (AHELA) [Arizona]	Consolidation			92			79
Arkansas Student Loan Authority (ASLA) [Arkansas]	Consolidation	66	69	51	74	65	53
Astrive Student Loans	Private
Axiom Student Loans	Private
Bancorp South	FFELP Private	52			56
Bank of America	FFELP Private	3	28	16	3	42	16
Bank of Lake Mills	FFELP	31		80	28		71
Bank of North Dakota	Consolidation	65	59	49	65	82	51
Bank of Texas	FFELP
Bankers Trust	FFELP
Boeing Credit Union	FFELP
Brazos HESC [Texas] Brazos Student Lending, Academic Finance Corporation, Educational Funding Services, Inc. and Acapita.	FFELP	23	9	4	26	19	4
Bremer Bank	Private Consolidation FFELP
Business Financial Solutions	Consolidation		36			27
Cadence Bank	FFELP
California Dental Association	Consolidation		80			93
Campus Door	Private
Carnegie Student Loans	FFELP
Capitol Federal Savings, Kansas	FFELP
Capital One/Axiom	FFELP
Citi Student Loan Corporation	Consolidation Private Consolidation	2	3	2	2	7	2
Citizens Bank	Consolidation	17	58	40	16	81	43
City Bank Texas	FFELP
College Board	FFELP	25		73	25		78
College Foundation Inc. (CFNC) [North Carolina]	Consolidation	18	27	21	17	40	19
College Guidance Center	Consolidation
College Funding Group	Consolidation
College Loan Corporation	FFELP Private	8	6	8	7	9	9
College Solutions Network	FFELP	96	78		40	70	88
Collegiate Solutions	FFELP		55	70		28	70
CollegeInvest [Colorado]	Consolidation	45	48	38	42	34	39
Comerica Bank	FFELP Private	37		81	39	79	92
Commerce Bank	Consolidation	32		59	34		64
Commercial Bank of Texas	FFELP Private
CompleteEd	Private
Connecticut Student Loan Foundation (CSLF/Susie Mae) [Connecticut]	FFELP Private		56			46
CoreFirst Bank	FFELP
Cornhusker Bank	FFELP
COSTEP	FFELP
Credit Union of Texas	FFELP
Cy-Fair Federal Credit Union	FFELP
Deutsche Bank Trust Company	FFELP
DSS	Consolidation		84			47
EdAmerica [Tennessee]	Consolidation	10		47	9	92	56
EdFed	Consolidation
EdSouth	Consolidation		22	17		20	17
Educare Financial	Consolidation					90
Education Credit Union	FFELP
Education Finance Partners	Private Private Consolidation
Education Loan Resources	FFELP Private
Erie Processing Self Service Corporation	Consolidation		44			14
F&M Bank and Trust Company	FFELP
Falcon International Bank	FFELP
Federal Association of Financial Services (FAFS)	FFELP		50			73
Federal Student Loan Solutions	FFELP
FinanSure	FFELP Private		24	60		18	47
First Commercial Bank	FFELP
First Financial Bank, Eastland	FFELP
First Horizon Bank	FFELP
First Niagara Bank	FFELP
First Service Credit Union	FFELP
First United Bank	FFELP
FirstBank Southwest	FFELP
First Financial Bankshares	FFELP
FirstMark Credit Union	FFELP
Franklin Bank, S.S.B	FFELP		81			44
Freestone Credit Union	FFELP
Frost National Bank	FFELP	73			66		98
GATE Student Loan Program	Private
GCO-ELF	Consolidation		33	14		24	12
GMAC Bank Education Loans	Private
Goal Financial	FFELP		5	10	64	13	11
Graduate Leverage	Consolidation Private Consolidation		14	48	54	11	44
The Educated Borrower	Private
The Graduate Loan Center	Consolidation
Happy State Bank	FFELP
HCSB, A State Banking Association	FFELP
Heights State Bank	FFELP
HELP Alternative Loans	Private
HERO Student Loans	Consolidation
Hondo National Bank	FFELP
HSBC Bank USA, NA	FFELP	41	76	53	43	94	57
Hereford State Bank	FFELP
IEFC	Private
Independent Bankers Bank	FFELP
International Bank of Commerce	FFELP
Iowa Student Loan [Iowa]	Consolidation Private		26	25		26	22
ISM Education Loans [Indiana]	Consolidation	58	23	35	76	22	27
JPMorgan Chase	Consolidation	7	20	11	4	5	8
K2 Student Loan Solutions	FFELP		37	61		23	52
Kansas State Bank of Manhattan	FFELP Private	62			69
Kentucky Higher Education Student Loan Corporation [Kentucky]	Consolidation	20	41	30	21	43	26
Key Bank	FFELP Private	28	52	24	32	19	24
Kleberg Bank	FFELP
LaSalle Bank	FFELP	70			75
Legacy Texas Bank	FFELP
Loan to Learn	Private
Loanster Financial Group LLC	Consolidation
Maine Education Services (MES)	FFELP
Medfunds	Private
M&I Bank	Consolidation
M&T Bank	FFELP	40	97	91	38		91
MEFA [Massachusetts]	FFELP	74	72	69	62	77	69
MHESAC [Montana]	Consolidation		34	36		32	34
MHESLA [Michigan]	FFELP Private		60	29		72	29
Mills County State Bank	FFELP
MOHELA [Missouri]	Consolidation Private		15	12		15	15
MSA Solutions	Consolidation					60
MyRichUncle	FFELP Private
National Bank of Andrews	FFELP
National City Bank	Consolidation	22	83	62	24	89	67
National Education	Consolidation Private	26	31	18	27	50	48
National Student Loan Group LLC (NSL Direct)	FFELP		61			69
Neches Federal Credit Union	FFELP
NELNET, Union Bank & Trust	Consolidation Private Private Consolidation	16	2	3	14	2	3
New Mexico Student Loans [New Mexico]	Consolidation	46	43	46	49	57	46
NextGrad	Consolidation
NextStudent	FFELP Private Consolidation	100	4	45	59	3	31
NHHELCO [New Hampshire]	Private Consolidation	42	45	39	41	63	41
NorthStar/T.H.E. [Minnesota]	FFELP Private	13	21	15	11	45	14
Northwest Savings Bank	FFELP for first-time borrowers		89
NTHEA	Consolidation		38	36		38	37
Oklahoma Student Loan Authority (OSLA) [Oklahoma]	Consolidation		52	44		61	42
Omnis Student Loans	Consolidation					80
One Simple Loan	Consolidation					29
Panhandle Plains HEA	Consolidation		39	33		51	25
PNC Bank Education Loan Center	Consolidation	12	25	34	15	54	38
PlainsCapital Bank	FFELP	81			91
Red River Federal Credit Union	FFELP
Regions Bank	Consolidation	34	62	43	18	86	50
Rhode Island Student Loan Authority (RISLA) [Rhode Island]	Consolidation	38	100	56	37	95	60
Sallie Mae	Private (Recourse Loans Only) Consolidation Private Consolidation	1	1	1	1	1	1
San Antonio Federal Credit Union	FFELP
Security Bank of Kansas City	FFELP
Sovereign Bank	FFELP	82	88	88	92
Spokane Teachers Credit Union	FFELP
SAF-MT [Montana]	FFELP outside Montana
ScholarPoint	FFELP Private		51			53
School Loans Corp	Consolidation		77			76
South Carolina Student Loan Corporation	Consolidation Private	21	29	22	23	37	20
StarTrust Federal Credit Union	FFELP
Student Capital Corporation	FFELP
Student Financial Services	Consolidation		68			25
Student Funding Services (Jacksonville, FL)	Consolidation		82			56
Student Lending & Consolidation	Consolidation		63			49
Student Loan Solutions, LLC	Consolidation					39
Student Loan Xpress	FFELP Private	15	8	9	12	6	10
Student Trust / ConsolidateYourLoans.com	Consolidation
SunTrust Education Loans	FFELP (only in Texas) Consolidation	14	11	19	13	30	18
Tarrant County Credit Union	FFELP
TCF Bank	FFELP	44		98	44
TD Banknorth	FFELP Private
Texas Bay Area Credit Union	FFELP
Texas Independent Bank	FFELP
Texas Rural Communities	FFELP
THE National Bank	FFELP Private
TierOne Bank	FFELP
Town and Country Bank Stephenville	FFELP
Trustmark National Bank	FFELP
UHEAA	Consolidation
University Financial Services Inc. (UFS)	Consolidation
University Financial Lending	Consolidation					71
University of Miami	FFELP	86			89
Urban Ed Express	FFELP Private
U.S. Bank	FFELP	9	54	28	8	58	33
Vermont Student Assistance Corporation (VSAC) [Vermont]	Consolidation	33	30	32	33	41	32
Wachovia Education Finance	Consolidation Private	5	10	5	6	16	7
Washington Mutual	FFELP Private	83
Weatherford National Bank	FFELP
Wells Fargo	Consolidation	4	18	6	5	8	5
West Des Moines State Bank	FFELP Private
Wichita Falls Teachers Federal Credit Union	FFELP
Widener University	FFELP
Wyoming Student Loan Corporation [Wyoming]	Consolidation		79	57		88	61
Zions Bank	FFELP Private	61		97	81

Lenders with failed student loan securitization (auction rates) include:

• Brazos
• EdSouth
• College Loan Corporation
• Montana Higher Education Student Assistance Corporation
• Mississippi
• Sallie Mae
• First Marblehead
• Vermont (VSAC)

Lenders Reentering the Student Loan Marketplace

The following lenders have resumed making loans under one or more education loan programs that had previously been suspended at least in part:

• Graduate Leverage
• Independence Federal Savings Bank
• Kentucky Higher Education Student Loan Corporation
• MEFA
• National Education
• River City Federal Credit Union

Brazos reentered FFELP but then suspended participation a second time after seeing the final details of the terms of the US Department of Education's loan purchase authority. NorthStar Guarantee reentered FFELP but then suspended participation a second time.

Chronology of Lender Actions

This table shows a timeline of actions that lenders have taken with regard to the changed environment for lender profitability, such as suspending one or more loan programs, laying off staff, closing servicing centers and suspending loan acquisitions.

Note: Student Loan Xpress and Goal Financial have not returned numerous telephone calls and email messages. The Goal Financial layoff figures are based on the Warn Act Notices.

Loan Program Expansions

A handful of lenders are actively trying to significantly increase their marketshare. This mainly includes lenders that are recent entrants into the student loan programs or who are building an in-house student loan business after dissolving a previous relationship with another lender. An example includes Discover Student Loans.

Secondary Markets for Student Loans

Most secondary markets for education loans have evaporated. However, some SLARS are being sold at a discount on the Restricted Securities Trading Network (RSTN), now known as SecondMarket.

Impact on Students

The impact on students and their families breaks down into three main areas:

• Availability. While many lenders have left the student loan marketplace, eligible borrowers should still be able to obtain federal education loans. This is in part due to the one-year bandaid enacted by Congress as part of the Ensuring Continued Access to Student Loans Act and implemented by the US Department of Education. Students at community colleges and trade schools may find it more difficult to find willing lenders because average aggregate loan balances are smaller at 1 and 2-year programs than at 4-year colleges, but the colleges can always switch into the Direct Loan program. So borrowers may have to hunt around for a lender but will ultimately be able to find federa loans. This will represent more of an inconvenience than a major impediment. Private student loans, however, may suffer from availability issues, especially at foreign medical schools that do not participate in the Title IV federal student aid programs.

• Eligibility. The Federal Stafford loan should no suffer from eligibility issues. However, the PLUS loan depends on the borrower not having an adverse credit history. One of the components of an adverse credit history is having had a foreclosure or repossession in the last five years. To the extent that the subprime mortgage credit crisis was precipitated by an increase in foreclosure rates there should be an increase in PLUS loan denial rates. Education lenders are also adopting more stringent credit underwriting criteria on private student loans. While one could have obtained a traditional private student loan in 2007 with a FICO score as low as 620, now lenders are requiring FICO scores of at least a 650 and in some cases 680 or 700 or more. (Anything under 650 is considered subprime, and education lenders are eliminating their subprime exposure. Others, given limited liquidity, are focusing that liquidity on the most creditworthy of prospective borrowers.) Approximately 10% of funded borrowers in 2007 had FICO scores between 620 and 650. Approximately 20% to 25% of borrowers had FICO scores between 620 and 680, and approximately 40% to 45% had FICO scores between 620 and 700. Conservatively one can estimate that an additional 1% of borrowers who would have been eligible for a PLUS or private student loan in 2007 will not be eligible in 2008.

• Cost. Lenders cannot control interest rates and fees on federal loans, since the maximum rates and fees are set by law. They can, however, increase costs to the extent that they were previously offering discounts on those rates and fees. The majority of lenders have eliminated all discounts except a 0.25% interest rate reduction for auto-debit. On the other hand, lenders do have pricing power on private student loans and have been passing on their increased cost of funds by increasing the interest rates and fees on their loans.

Pending and Enacted Legislation

Members of Congress have introduced proactive legislation designed to solve the student loan credit crunch. The bills from the education committees are focused on ensuring that students have continued access to education loans, but do not address the liquidity constraints facing education lenders. The bills from the banking committees are focused on injecting liquidity into the education lenders. Both sets of bills are necessary.

The legislation that ensures continued access to education loans includes:

• Senator Edward M. Kennedy (D-MA), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced the Strengthening Student Aid for All Act of 2008 (S. 2815) on April 3, 2008.
• Representative George Miller (D-CA-7), Chairman of the House Education and Labor Committee, introduced the Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715) on April 8, 2008 (ECASLA 2008). The White House issued a Statement of Administration Policy on April 16, 2008 in support of the bill, but expressed concern about the potential impact on the 90/10 rule. The bill passed the House on April 17, 2008 by a bipartisan vote of 383-27. The bill, with amendments, passed the Senate on April 30, 2008 by unanimous consent. (This replaced Senator Kennedy's original bill.) The bill was signed into law by President Bush on May 7, 2008 (P.L. 110-227).
• Representative George Miller (D-CA-7), Chairman of the House Education and Labor Committee, introduced the Ensuring Continued Access to Student Loans Act Extension (H.R. 6889), which passed the House on September 15, 2008 by a vote of 368 to 4 with 61 not voting. This legislation extends the student loan purchase authority and lender-of-last resort provisions by a year, through June 30, 2010. The legislation was passed by the Senate with unanimous consent on September 17, 2008. The bill was signed into law by President Bush on October 7, 2008 (P.L. 110-350).
• Senator Christopher J. Dodd (D-CT) introduced the PLUS Loan Borrower Protection Act of 2008 (S. 2895) on April 21, 2008.
• Senators Patty Murray (D-WA) and Christopher J. Dodd (D-CT) introduced the Preventing Student Loan Discrimination Act (S. 3141) on June 17, 2008.

The legislation that injects liquidity into education lenders includes:

• Representative Paul E. Kanjorski (D-PA-11), Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, introduced the Emergency Student Loan Market Liquidity Act (H.R. 5723) on April 8, 2008.
• Senator John F. Kerry (D-MA) introduced the Emergency Student Loan Market Liquidity Act (S. 2847) on April 10, 2008.
• Representative Paul E. Kanjorski (D-PA-11), Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, introduced the Student Loan Access Act of 2008 (H.R. 5914) on April 29, 2008.
• The Emergency Economic Stabilization Act of 2008 (HR 1424, PL 110-343) passed the Senate by a vote of 74 to 25 on October 1, 2008 and the House by a vote of 263-171 on October 3, 2008. The bill was signed into law by President Bush on October 3, 2008 (P.L. 110-343). The definition of "troubled assets" in section 3(9)(B) of the act allows the secretary of the treasury, after consultation with the chairman of the Federal Reserve, to designate as troubled assets any other financial instrument besides just those based on or related to mortgages. This could include federal and private student loans, such as SLARS and SLABS. It could also permit the federal government to provide guarantees against issuer default to jump start the capital markets. At this point it is entirely up to the Secretary of the Treasury to decide how to implement this authority.

The following table summarizes the provisions of the Ensuring Continued Access to Student Loans Act of 2008 (P.L. 110-227). The legislation shifts borrowing from private loans to federal loans by increasing the unsubsidized Stafford loan limits for undergraduate students by $2,000 per year and $8,000 in aggregate and by allowing the Parent PLUS loan to be deferred while the student is in school and for a six month grace period after the student graduates or drops below half-time enrollment. Federal loans are less expensive, more available and have better repayment terms than private student loans. This will address the stricter credit underwriting standards on private student loans by allowing borrowers with bad credit to obtain sufficient education financing despite their ineligibility for private student loans. The legislation also remedies flaws in the lender-of-last-resort program and provides some liquidity to the FFEL program by allowing the US Department of Education to buy loans from FFELP lenders. All savings from the legislation is directed into the Academic Competitiveness and National SMART grants.

(The final bill did not include Senator Kennedy's proposal to reduce borrowing by the neediest of low income student by allowing the EFC to go negative and by increasing the maximum Pell Grant by up to $750 for these students.)

The legislation can be implemented by the US Department of Education without negotiated rulemaking and without conforming to the Master Calendar deadline dates.

The legislation also included a sense of Congress statement encouraging the Federal Financing Bank, Federal Reserve and Federal Home Loan Banks to inject liquidity into FFELP lenders.

Aside from the provisions that allow the US Department of Education to buy FFELP loans, the legislation does not solve the underlying liquidity constraints facing education lenders. Legislation proposed by the House and Senate banking committees would address this problem by allowing the Federal Home Loan Banks or Federal Financing Bank to inject liquidity into the federally-guaranteed student loan program.

Senator Edward M. Kennedy and Representative George Miller sent a letter to the US Government Accountability Office on May 15, 2008, asking the GAO to monitor and evaluate the Bush administration's progress in ensuring continued access to federal education loans. The letter also asks for recommendations of additional actions that could be taken at no cost to the taxpayers.

Representative Kanjorski introduced two bills, one using the Federal Home Loan Banks (FHLB) to inject liquidity in the federally-guaranteed student loan program and one using the Federal Financing Bank (FFB). (Senator Kerry's introduced the FHLB bill in the Senate.) The first bill would allow the FHLB to invest surpluses in highly rated student loan securities and student loans and to make advances for student loan financing. Lenders would be allowed to pledge student loans and student loan-related securities as collateral. The bill would expire two years after enactment. The second bill would allow the FFB to invest in FFELP loans and securities collateralized with FFELP loans, and to make advances for financing such loans. It requires the investments to be made at no net cost to the federal government as determined by the Treasury Department and the Office of Management and Budget. The bill would expire on July 1, 2009, but may be extended in one year increments by the Secretary of the Treasury in consultation with the Secretary of Education.

Chairman Dodd's bill would allow borrowers who are 90 or more days late on their mortgage loan payments or for whom foreclosure proceedings have been initiated to remain eligible for the PLUS loan. Currently, the regulations at 34 CFR 682.201(c)(2)(ii) and 34 CFR 685.200(c)(1)(vii)(B) define an adverse credit history as follows:

• 90 or more days delinquent on any debt, or
• having had a write-off of a Title IV debt, default determination, bankruptcy discharge, foreclosure, repossession, tax lien, or wage garnishment in the last 5 years

Margaret Spellings, Secretary of Education, Henry M. Paulson, Secretary of the Treasury, and Jim Nussle, Director of the Office of Management and Budget, sent a joint letter on April 23, 2008 to Senator Dodd indicating that the Federal Financing Bank is not an option for injecting liquidity into the FFEL program. They wrote "The Administration has also considered various means to ensure that necessary short-term liquidity is available for student loan originations for the coming school year. We explored utilizing the Federal Financing Bank (FFB) in this manner but after a thorough analysis, it is clear that the FFB does not have the authority under the Federal Credit Reform Act to purchase, or otherwise participate in, loans to non-Federal borrowers in these circumstances." This means that using the FFB (or the FHLB or Term Securities Lending Facility) will require Congressional action. The letter was supportive of HR 5715 but silent on the prospect of Congressional action to allow education lenders to borrow from the FFB, FHLB or TSLF.

The Preventing Student Loan Discrimination Act would ban FFELP lenders from discriminating against eligible borrowers based on the borrower's choice of an eligible educational institution, length of the borrower's program, academic year in school or the borrower's income.

The Higher Education Opportunity Act (PL 110-315) was signed into law on August 14, 2008. Besides reauthorizing the Higher Education Act of 1965, it included some improvements that addressed aspects of the student loan credit crunch.

• Foreign medical schools and foreign nursing schools are now eligible to provide unsubsidized Stafford and PLUS loans to their students under certain conditions provided they agree to reimburse the US Department of Education for any loan defaults. (For nursing schools the requirement applies only if the school's default rate exceeds 5%.) Some foreign medical schools are not Title IV institutions and so were ineligible for all but private student loans. The private student loans subsequently evaporated. This legislative change allows these schools to obtain federal loans.
• The $2,000 increase in unsubsidized Stafford loan limits provided by the Ensuring Continued Access to Student Loans Act of 2008 will not affect the 90/10 rule.

American Recovery and Reinvestment Act of 2009

The US House of Representatives introduced the American Recovery and Reinvestment Act of 2009 on January 15, 2009. The following is a summary of the provisions related to student financial aid:

• Pell Grant. The bill increases the maximum Pell Grant for 2009-10 under the discretionary funding by $500, from $4,360 to $4,860. When coupled with the $490 in mandatory Pell Grant funding enacted by the College Cost Reduction and Access Act of 2007, this yields an overall maximum Pell Grant of $5,350. This will help an estimated 800,000 additional students, so overall an estimated 7 million students will receive Pell Grants in 2009-10. (Note that eligibility for the Academic Competitiveness and National SMART Grants depend on the student being eligible for the Pell Grant, so increasing the discretionary funding, which controls eligibility, has a secondary benefit of expanding the number of students eligible for these additional grants.)

  The cost of the increase is $15.636 billion over two years. In addition, there is a funding shortfall of $643 million in 2009-10 and $831 million in 2010-11 ($1.474 billion total) in the mandatory Pell Grant funding. The stimulus bill would erase this shortfall as well.

• Stafford Loan. The bill increases the annual unsubsidized Stafford Loan limits for undergraduate students by $2,000 and the aggregate limits (for both dependent and independent students) by $8,000. Thus the new limits are as follows:

  • Dependent
    • Freshman: $7,500, no more than $3,500 subsidized
    • Sophomore: $8,500, no more than $4,500 subsidized
    • Junior and Senior: $9,500, no more than $5,500 subsidized
    • Aggregate: $39,000

  • Independent (also Dependent whose parents were denied a PLUS loan)
    • Freshman: $11,500, no more than $3,500 subsidized
    • Sophomore: $12,500, no more than $4,500 subsidized
    • Junior and Senior: $14,500, no more than $5,500 subsidized
    • Aggregate: $65,500

  These changes will be effective for loans first disbursed on or after January 1, 2009.

  As with the $2,000 annual limit increase enacted by the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA), this additional $2,000 increase will not have an impact on the 90/10 rule through July 1, 2011 (i.e., the increased loan limits will be treated as revenue received by the college from sources other than Title IV student aid). The language in section 493(c) of the Higher Education Opportunity Act of 2008 that amended section 487(d)(1)(E) of the Higher Education Act of 1965 based the exception to the 90/10 rule on the loan limits in effect prior to enactment of ECASLA. (In addition, the $2,000 loan limit increase will be implemented by amending the $2,000 ECASLA increase to replace it with a $4,000 increase, so any provision that applies to the ECASLA increase would continue to apply to the new higher loan limit increase.)

  487(d)(1)(E) in the case of each student who receives a loan on or after July 1, 2008, and prior to July 1, 2011, that is authorized under section 428H or that is a Federal Direct Unsubsidized Stafford Loan, treat as revenue received by the institution from sources other than funds received under this title, the amount by which the disbursement of such loan received by the institution exceeds the limit on such loan in effect on the day before the date of enactment of the Ensuring Continued Access to Student Loans Act of 2008;

  The federal government will realize an estimated $30 million in savings from these increases.

• Federal Work Study (FWS). FWS funding will be increased by $490 million ($613 million when institutional matching funds are included), enough for an additional 200,000 recipients.

• Temporary Fix for Index Rate Mismatch. For the quarter from 10/1/08 to 12/31/08, for loans first disbursed on or after January 1, 2000, the special allowance payments will substitute the 3-month LIBOR minus 13 bp for the 3-month Commercial Paper Rate. This addresses the problems caused by the Federal Reserve's intervention in the marketplace for Commercial Paper through the establishment of the Commercial Paper Funding Facility (CPFF). However, this only addresses the first quarter of CP-LIBOR dislocation; the CPFF runs through April 30, 2009 and may also be extended beyond that date. A more permanent solution is still necessary. But this at least will provide some temporary relief for the $300 billion in existing FFELP securitizations.

• AmeriCorps. Increases AmeriCorps funding by $200 million.

• Education Tax Benefits. Establishes the American Opportunity Tax Credit for 2009 and 2010 tax years by temporarily increasing the Hope Scholarship tax credit to $2,500 (100% of the first $2,000 in tuition and related expenses and 25% of the next $2,000). This compares with the current maximum credit of $1,800 (100% of the first $1,200 and 50% of the next $1,200).

  The credit will be allowed for the first four years of post-secondary education and also only for the first four tax years. This is an increase from the current two-year limits.

  The definition of qualified tuition and related expenses will be expanded to include course materials in addition to tuition and fees.

  The income phaseouts will be increased to $80,000 to $90,000 (single filers) and $160,000 to $180,000 (married filing joint). This compares with the current phaseouts of $48,000 to $58,000 (single) and $96,000 to $116,000 (joint).

  The tax credit will be allowed as an offset to the AMT.

  The tax credit will become partially refundable, allowing up to 40% of the tax credit (maximum $1,000) to be refundable unless the taxpayer claiming the credit is a dependent child of another taxpayer who is entitled to claim the credit.

  Despite a press release highlighting the change as a simplification of the existing education tax credits, the legislation does not repeal the Tuition and Fees Deduction or the Lifetime Learning Tax Credit.

  The law will also require a study by the US Treasury of how to coordinate the Hope Scholarship and Lifetime Learning tax credits with the Pell Grant program and a study of the feasibility of requiring community service as a prerequisite for the tax credit.

Several of these provisions were dropped from the final conference bill, which was enacted on February 13, 2009. See American Recovery and Reinvestment Act of 2009 for a copy of the final legislation and a summary of the student aid related provisions.

US Department of Education to Purchase FFELP Loans

The US Department of Education held a briefing for FFELP lenders about the implementation of the liquidity aspects of the Ensuring Continued Access to Student Loans Act of 2008 (PL 110-227) on May 20, 2008. The Department made the following two proposals (press release, fact sheet, 5/21/08 letter to FFEL lenders, 6/18/08 letter to college presidents):

• Lenders could sell loans made from July 1, 2008 through June 30, 2009 to the Department with 45 days notice at par (outstanding principal plus accrued but unpaid interest +/- SAP), plus a rebate of the 100 basis point lender-paid origination fee, plus $75 per loan. (The $75 fee is per loan, not per borrower.) Servicing would be transferred to the Department's contractor. The lenders could sell the loans to the Department through September 30, 2009. This proposal provides an exit strategy for lenders who are willing to risk making loans during the 2008-09 academic year.

• The Department would accept Stafford and PLUS loans as collateral through September 30, 2009 for funds provided to lenders at the three-month Commercial Paper Rate plus 50 basis points. The lenders would have to use the funds to originate more Stafford and PLUS loans. The lenders would have to repay the funds (or sell the loans) to the Department at the end of the financing period. The Department would not be providing life-of-loan financing. This proposal provides lenders with liquidity with which to make new loans during the 2008-09 academic year.

The lenders had several remaining concerns about the legislation and the Department's proposals:

• The proposals need to be implemented quickly, as several lenders are close to running out of liquidity.
• If the Office of Management and Budget determines that the numbers are not cost-neutral, it could derail the process or change the numbers.
• The lenders would like to retain the servicing of loans sold to the Department, partly to provide continuity for borrowers and partly because it can be an additional source of revenue to the lenders.
• The legislation does not allow lenders to sell existing loans, only new loans originated for the 2008-09 academic year.
• The temporary nature of the solutions, such as the CP + 50 financing ending on 9/30/09 instead of providing life-of-loan financing.
• The legislation only addresses Stafford and PLUS loans. It does not address federal consolidation loans or private student loans.

The US Department of Education issued an announcement on June 12, 2008 indicating that loans purchased by the Department will not continue any discounts offered by the originating lender. Such loans will, however, be eligible for a 0.25% interest rate reduction for auto-debit. Lenders that are subject to the New York SLATE legislation (which sets requirements for preservation of loan discounts on loans sold) will likely replace their loan discounts with this auto-debit discount for loans made during the 2008-09 academic year. (Moreover, margins on such loans are thin enough that most lenders cannot afford to provide more generous back-end discounts.)

During a Webinar on June 17, 2008, Jeff Baker of the US Department of Education said that the Department is capable of doubling the Direct Loan program's capacity immediately, and is capable of increasing it even further if necessary. He also said that the Department can now certify schools for the Direct Loan program in less than five days (not counting any time required for a school to updates its computer and financial systems). (Sources of advice and assistance for colleges considering switching to the Direct Loan program include the US Department of Education Direct Loan Registration page and the National Direct Student Loan Coalition.)

The US Department of Education submitted the loan purchase authority terms and conditions (term sheet) to the Federal Register for publication on June 25, 2008. The notice also includes an outline of the methodology and factors used to evaluate the loan purchase price and to ensure that the loan purchases do not result in any net cost to the Federal government. It will be effective upon publication in the Federal Register. This Federal Register notice did not change the pricing of the loan purchase authority as summarized in the Secretary's May 21, 2008 letter to FFELP lenders. It did include a lot of detail concerning the terms, such as an anti-cherry-picking requirement that lenders who sell any of a borrower's loans sell all of those loans. The term sheet limits loan purchases to loans that have no borrower benefits other than "unconditional upfront fee reductions which are accrued and paid or made prior to the date on which an Eligible Loan is sold" and "permitted reductions in interest rates of not more than .25 percent that are contingent on the use of an automatic payment process by the borrower for any payments due".

The US Department of Education announced the availability of the Master Participation Agreement and the Master Loan Sales Agreement on July 11, 2008. Several lenders have said that they were waiting to see these agreements before deciding whether to return to the federal loan programs. The Department announced revisions to the agreements on July 25, 2008.

On November 8, 2008, the US Department of Education announced that it would implement the full extent of its authority under the ECASLA legislation to provide liquidity to FFELP lenders. In addition to replicating the existing 2008-09 loan purchase and participation programs to the 2009-10 academic year, the Department will provide support for Asset-Backed Commercial Paper (ABCP) conduits involving fully-disbursed non-consolidation FFELP loans originated since October 1, 2003. The Department will enter into forward commitments to purchase loans from new conduits, effectively providing a standby loan purchase agreement. In such a commitment the Department agrees to purchase the loans at a future date at a prearranged price (at no net cost to the federal government). This will make private investors more willing to provide financing for the conduits, since it provides them with an exit strategy, the option of exercising the standby loan purchase agreement. It eliminates the risk that the investor's liquidity will be permanently frozen into the conduit. This solution is attractive to the federal government because it does not increase the national debt, as the conduits are funded with private capital. It addresses the bridge funding and delayed disbursement issues, by allowing lenders to obtain liquidity from older loans, such as unemcumbered 2007-08 loans originated from October 1, 2007 to April 30, 2008. These loans have not been securitized and most have not yet been consolidated. The conduits could also be used to refinance existing auction rate securitizations (SLARS), since the investors in the SLARS would likely be willing to liquidate the SLARS by selling the loans to the conduit in order to recover their investment capital. (The unilateral rights of the issuer of a securitization to sell the loans in a securitization are usually limited to when the remaining student loan pool balance is less than or equal to 10% of the initial pool balance in the securitization. The issuer may also have the right to buy 2% of the trust student loans at any time. Otherwise securitizations do not commonly include a call option.) Terms and conditions were published in the Federal Register 74(10):2518-2564 on January 15, 2009.

The US Department of Education has established a web page for announcements concerning FFELP liquidity facilities. This includes loan purchase activity reports for the 07/08 Loan Purchase Program, 08/09 Loan Participation Purchase Program and 08/09 Loan Purchase Commitment Program.

Federal Reserve

The Federal Reserve announced on Friday, May 2, 2008, that it was opening up the Term Securities Lending Facility (TSLF) to accept all AAA-rated ABS as collateral, including federal and private student loans, starting with the May 7, 2008 auction. This will provide some liquidity to education lenders. However, it is only a 28-day facility.

In addition, the Federal Open Market Committee authorized an expansion of the collateral that can be pledged in the Federal Reserve's Schedule 2 Term Securities Lending Facility (TSLF) auctions. Primary dealers may now pledge AAA/Aaa-rated asset-backed securities, in addition to already eligible residential- and commercial-mortgage-backed securities and agency collateralized mortgage obligations, beginning with the Schedule 2 TSLF auction to be announced on May 7, 2008, and to settle on May 9, 2008. The wider pool of collateral should promote improved financing conditions in a broader range of financial markets. Treasury securities, agency securities, and agency mortgage-backed securities continue to be eligible as collateral in Schedule 1 TSLF auctions.

The Federal Reserve issued a press release on November 25, 2008 announcing the creation of a Term Asset-Backed Securities Loan Facility (TALF) intended to enable and stimulate the issuance of new consumer and small business ABS, including student loans. Under this facility the Federal Reserve Bank of New York will lend up to $200 billion on a non-recourse basis with a term of at least one year (later revised to three years) to holders of AAA-rated ABS. The holders of the ABS may not be affiliated with the originator of the securitized loans. The ABS must be backed by newly and recently originated student loans or other forms of consumer credit (e.g., auto loans, credit cards, small business loans). The holders of the ABS will be required to pledge it as collateral for the TALF loans. The originators of the loans underlying the ABS must agree to the executive compensation limits of the Emergency Economic Stabilization Act of 2008.

TALF will facilitate the return of investors (including individuals and businesses) to the ABS market. This will provide liquidity to lenders at a more traditional cost of funds. The pricing will be based on a sealed-bid auction process, with rates pegged to a spread over the one-year overnight indexed swap (OIS).

The US Treasury announced on November 25, 2008 that it will provide $20 billion of credit protection to the Federal Reserve in the form of a Special Purpose Vehicle (SPV), effectively providing a standby loan purchase agreement.

This facility will provide some help for lenders originating private student loans. (While nothing would prevent using TALF for federal education loans, the existing facilities established by the Ensuring Continued Access to Student Loans Act of 2008 are sufficient for new federal loans. These include the US Department of Education's loan purchase and participation agreements, the ABCP conduits, and the 97% solution for 2007-08 FFELP loans.)

TALF, however, mainly helps larger lenders. It will prevent the problems with private student loans from getting worse, but is unlikely to result in the reentry of smaller lenders who had previously suspending their private student loan programs. This is because of several limitations in the TALF program which effectively require the lenders to already have some liquidity:

1. The structure of TALF involves making loans to holders of ABS, thereby facilitating the return of investors to the capital markets. This means that the lenders who issue the ABS must be able to originate the loans underlying the ABS on their own. Lenders who have run out of liquidity or who have only limited liquidity will not be able to participate because they will not be able to originate new loans eligible for TALF. It is like trying to jump start a car with no gas in the tank.

2. TALF is limited to ABS involving newly and recently originated consumer credit. The term sheet does not define "newly or recently originated exposures to US-domiciled obligors", but the intention is to facilitate new lending. This means that the issuers of the ABS must have enough liquidity available to make new loans. Many of the lenders who have suspended their private student loan programs did so because they ran out of liquidity. There have been no securitizations of private student loans since September 2007, with the exception of a small securitization by MyRichUncle in July 2008. In order for the lenders who have suspended their loan programs to resume making private student loans, they need to be able to securitize their existing portfolios. Unless the Federal Reserve considers "recently originated" to include loans made during the last 1-2 years, TALF will not facilitate the re-entry of smaller lenders.

   TALF does not provide any solutions for older loans. For example, it does not resolve the CP-LIBOR dislocation that will likely lead to downgrades on existing FFELP securitizations because of the index rate mismatch problem.

3. TALF is restricted to AAA-rated tranches. AAA is the highest investment grade rating category. This means the lenders may have to hold the subordinated tranches themselves if they are unable to find non-TALF investors. This would require access to liquidity beyond TALF.

4. It is unclear whether TALF is limited to term securitizations or also includes auction-rate securitizations.

Overall, TALF is unlikely to facilitate the reentry of lenders who have already run out of liquidity. It will, however, help prevent the situation from getting worse for the lenders who are still making private student loans.

It is, however, possible that the capital market "buzz" from a resumption of the issuance of student loan ABS may eventually reinvigorate the market as a whole.

The impact on students is likely to be limited:

• The smaller lenders are often among the more competitive and innovative. Since TALF will not facilitate their return to the student loan marketplace, competition will likely be limited.
• TALF does not require any improvements in consumer protections, as had been requested by The Institute for College Access and Success (TICAS).
• Improved access to ongoing liquidity through TALF may make private student loans somewhat more available as lenders may loosen the tight credit underwriting criteria for private student loans. However, the restriction of TALF to AAA-rated ABS will prevent any significant expansion of credit availability.
• Decreases in lender cost of funds may lead to lower interest rates on private student loans. However, the minimum spreads on TALF have not yet been published, and the actual cost of funds remains to be determined. Also, TALF is pegged to the OIS, leading to an index rate mismatch with the LIBOR index.
• It is unclear whether "US-domiciled obligors" includes international students pursuing an education at a US college or university.

For additional details, see the TALF Term Sheet.

Revised terms released on December 19, 2008 indicate a 3-year term for the loans instead of a 1-year term.

The Federal Reserve Bank of New York released a term sheet that is effective on February 6, 2009 and which indicated that student loans must have been first disbursed on or after May 1, 2007 in order to be eligible for the facility. The haircuts for private student loans range from 8% for an average life of 0-1 years to 14% for an average life of 6-7 years. The haircuts for federally-guaranteed education loans range from 5% for an ABS expected average life of 0-3 years to 9% for an average life of 6-7 years. Haircuts for an average life of more than 7 years increase by 1% for each additional year. The interest rates on the TALF loans will be either the 1-month LIBOR plus 100 basis points (floating-rate loans) or the 3-year LIBOR swap rate plus 100 basis points (fixed-rate loans). In both cases an additional 5 basis point fee will be paid to the Federal Reserve. The minimum size for a TALF loan is $10 million. TALF will stop making new loans on December 31, 2009 unless extended by the Federal Reserve.

The May 1, 2007 first disbursement date for student loans means that TALF may actually facilitate the reentry of private student lenders who had previously exited because of limited liquidity. These lenders will be able to sell their existing loan portfolios to raise capital to make new loans.

In addition, on February 10, 2009 Treasury Secretary Tim Geithner announced what amounts to an expansion of TALF from $200 billion to as much as $1 trillion and the addition of commercial mortgage-backed securities to the original set of loan types. The Consumer and Business Lending Initiative is described on pages 3-4 of the Financial Stability Fact Sheet.

On March 3, 2009, the Federal Reserve Bank of New York released revised terms and announced that TALF would become operational on March 17, 2009. The TALF FAQ was also updated. The haircuts for federally-guaranteed education loans were improved to 5% for an ABS expected average life of 0-5 years and 6% for an average life of 5-7 years. Haircuts for an average life of more than 7 years will increase by 1% for every two additional years. The interest rate on ABS backed by federally-guaranteed student loans will be 1M LIBOR + 0.50%. For private student loans the interest rate remains at 1M LIBOR + 1.00%. The prepayment assumptions for calculating weighted average life are 4% CPR for private student loans, 6% CPR for federal Stafford and PLUS loans, and 50% of the CLR curve for federal consolidation loans.

Increases in the Number of Financial Aid Applications

The national FAFSA application statistics published by the US Department of Education for the first half of the federal government's fiscal year (October 2007 through March 2008) overstated the increase in the number of applications as 16.3%. Those statistics failed to include rejected initial transactions. Since the number of rejected transactions decreased significantly in 2008-09, this yielded an increase that was too high.

Corrected data for the first three quarters (October 2007 through June 2008) published on November 6, 2008 demonstrates a 9.1% increase in the number of FAFSAs submitted for 2008-09 as compared with 2007-08, from 12,148,648 to 13,251,850. The number of schools listed on the FAFSAs increased from 16,608,277 to 18,704,989, a 12.6% increase. The number of schools per FAFSA increased from 1.37 to 1.41.

FAFSA processing statistics for Q4 (1/1/08 through 12/28/08) published on January 14, 2009 demonstrate a 10.5% year-over-year increase. During this 12 month period a total of 14,681,650 2008-2009 FAFSAs were submitted, compared with 13,288,109 during the previous year for 2007-2008 FAFSAs, an increase of 1,393,541. The number of schools listed on the FAFSAs increased from 17,920,093 to 20,384,955, a 13.8% increase. The number of schools per FAFSA increased from 1.35 to 1.39.

Nevada had the greatest increase (24.7%), followed by Arizona (19.2%), Florida (17.8%), Georgia (16.0%), North Carolina (15.7%), Oregon (15.2%), California (14.1%), Virginia (13.8%) and Hawaii (12.6%). These were among the areas hardest hit by the popping of the real estate bubble. Foreclosure rates are highest in these states. The states with the lowest increases were North Dakota (0.3% decrease), South Dakota (2.5% increase), Iowa (3.0%), Vermont (4.0%), Louisiana (4.1%), West Virginia (4.7%), Nebraska (4.7%), Oklahoma (4.9%), Montana (4.9%), Wyoming (5.1%), Kansas (5.4%), Maine (5.8%), New York (5.9%), Pennsylania (6.0%), New Hampshire (6.6%), Wisconsin (7.7%), Rhode Island (7.9%), Massachusetts (8.1%), New Mexico (8.3%) and Alaska (8.4%).

Although on average colleges have experienced an increase in the number of FAFSAs they have received, some colleges have experienced a decrease. This is because the change in the number of FAFSAs received in 2008-09 versus 2007-08 follows a bell curve distribution. In particular, if one limits the data to just those colleges that received at least 100 FAFSAs in 2007-08 and for which data was also available in 2008-09, and excludes as statistical outliers the 40 colleges that more than doubled the number of FAFSAs, 16.6% of the colleges had decreases in the number of FAFSAs received. So about 1 in 6 colleges experienced a decrease in the number of FAFSAs received compared with 5 in 6 colleges experiencing an increase. (Of an initial 7,199 colleges in 2007-08, 1,680 were excluded because they had less than 100 FAFSAs in 2007-08, 40 as statistical outliers, 137 because there was no data available for the same schools in 2008-09 and 237 because there was no data available for the same schools in 2007-08. The average increase for the 5,302 remaining colleges was 13.0%, slightly less than the 13.8% overall increase mentioned previously.)

The following graph illustrates the distribution of the change in the number of FAFSAs according to the number of colleges clustered in 5% buckets. The peak is in the bucket from 5% to 9.9%. The distribution is slightly skewed to the right when displayed in 5% buckets, consistent with the overall 13.0% average.

FAFSA processing statistics for the full 2008-09 application season (through Q6) indicated a total of 16,406,795 applications, up 1,801,751 (12.3% growth) from the 14,605,044 applications submitted in 2007-08.

FAFSA Processing Statistics for Q1 (1/1/09 through 3/29/09) published on April 13, 2009 demonstrate a 20.8% year-over-year increase of FAFSAs submitted during the first quarter of 2009-10 as compared with the first quarter of 2008-09. During this 3-month period a total of 6,585,007 2009-10 FAFSAs were submitted, compared with 5,449,774 2008-09 FAFSAs during the same quarter the year before. The application data spreadsheets were later revised to increase the totals to 6,871,201 2009-10 FAFSAs submitted in the first quarter, compared with 5,625,128 during the same quarter the year before, a 22.2% increase.

FAFSA application statistics are now available in the Application Processing Statistics section of the FSA Datacenter.