Summary: Changes made by the Bankruptcy Reform Act of 1994 that affect the Title IV student financial assistance programs.
SUBJECT: Changes made by the Bankruptcy Reform Act of
1994 that affect the Title IV student financial
REFERENCE: Chapters 2-10 of the Federal Student Financial
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
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.
Elizabeth M. Hicks
Deputy Assistant Secretary
for Student Financial Assistance