| DCLPublicationDate: 9/1/95 DCLID: GEN-95-40 AwardYear: Summary: Changes made by the Bankruptcy Reform Act of 1994 that affect the Title IV student financial assistance programs. September 1995 GEN-95-40 95-G-282 SUBJECT: Changes made by the Bankruptcy Reform Act of 1994 that affect the Title IV student financial assistance programs. REFERENCE: Chapters 2-10 of the Federal Student Financial Aid Handbook. Dear Colleague: The Bankruptcy Reform Act of 1994 (Pub. L. 103-394) was signed by President Clinton on October 22, 1994. The changes made by this law applied to applications for Title IV assistance received on or after that date. On November 8, we provided initial guidance to guaranty agencies concerning some of the major changes to the Federal Family Education Loan (FFEL) Program resulting from this Act. Since that time, some FFEL Program participants, as well as participants in other Title IV programs (e.g., the William D. Ford Federal Direct, and Federal Perkins Loan programs) have requested that the Department provide additional guidance concerning these bankruptcy changes. This letter contains the text of the statutory change in the Bankruptcy Reform Act that affects the Title IV programs, followed by a number of questions we have received from loan applicants, borrowers, schools, lenders, guaranty agencies, and other parties. Unless otherwise noted, the guidance in this letter shall be considered effective as of October 22, 1994. Thank you for ensuring that the intent of the Bankruptcy Reform Act is achieved. If you need further guidance, or have encountered situations not covered in this letter, please contact our Customer Support Center at 1-800-433-SFAP (7327) from 9:00 AM through 5:00 PM, Eastern time. Sincerely, Elizabeth M. Hicks Deputy Assistant Secretary for Student Financial Assistance Attachment |