Changes to US Loan disbursements after July 2010

See below for an e-mail from my uni's loan officer. I'm still trying to wrap my mind around what this means...it sounds like he's indicating that they may not be able to continue facilitating federal loans if the proposed changes are made.

I believe it's in reference to the Student Aid and Fiscal Responsibility Act (Section 211: Origination of Direct Loans at institutions located outside the United States): http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3221eh.txt.pdf

Dear Student,

You may be aware that there is currently a debate in the US regarding the future direction and structure of Federal Aid for student finance.  Plans are currently being discussed by US decision makers and I wanted to bring this to your attention as there are concerns that proposed changes may adversely affect the way funding for US students who choose to study overseas is organised and delivered.

The proposals originally put forward would have a massive impact on how loans would be administered for Americans studying overseas (Foreign Schools are not currently eligible to offer the Direct Loans and it was proposed that these would be the only Federal Loans available to students). Whilst it appears that a compromise solution will be found, it is important that the role and needs of Foreign Schools and the American students they serve are considered within the policy making timeline – it is planned that the new legislation will be in place by July 1, 2010.

The Bill passed in the House of Representatives last month appears to acknowledge the differences between foreign and US institutions but the Senate are not due to debate their version of the bill until October 15.

There are concerns within the UK Higher Education community that there could be extra burdens placed on foreign schools, which if not properly thought through may make the administration of loans for US students impossible to manage.

If you feel it is important that US students continue to have the opportunity to receive federal aid for their study outside America you may like to register your views by contacting the following legislators or indeed your own senator (see http://www.usa.gov/Contact/Elected.shtml) :


Chairman, House Education and Labor Committee
Congressman George Miller, Democrat-California
2205 Rayburn House Office Building
Room # 7W311
Washington, DC 20515
Telephone:(202) 225-2095
Email: George.Miller@mail.house.gov

The Honorable Arne Duncan, Secretary of Education
400 Maryland Avenue, SW
Washington, DC  20202
Telephone:  (202) 401-3000
Email: arne.duncan@ed.gov

If you would like any further information see http://edlabor.house.gov/education/higher-education.

From the bill, as pushed to the Senate (HR 3221 §211):

(d) Institutions Located Outside the United States- Loan funds for students (and parents of students) attending institutions located outside the United States shall be disbursed through a financial institution located in the United States and designated by the Secretary to serve as the agent of such institutions with respect to the receipt of the disbursements of such loan funds and the transfer of such funds to such institutions. To be eligible to receive funds under this part, an otherwise eligible institution located outside the United States shall make arrangements, subject to regulations by the Secretary, with the agent designated by the Secretary under this subsection to receive funds under this part

Sounds like we'll be fine, there may be another set of hands the money has to go through, but that's it.

How would that be an "extra burden?" Is the bill talking about requiring a designated school official to handle all loan funds? Doesn't the international student office deal with that already?