New Disaster Areas and Interim Guidance Made Policy by U. S. Department of Education

To assure that your Common Manual remains current, please record this document on your LPM/LPB index, and retain it in Appendix E of your manual.

New Disaster Areas

President Clinton recently declared Cook county in Illinois to be a disaster area because of storm damage and flooding that began on August 16.

Disaster-related Forbearance Policy

The U.S. Department of Education has confirmed that the interim disaster-related forbearance policies outlined in LOSFA’s January 28, 1997 is now policy. We re-state that guidance below:

1. Loan holders are strongly recommended to grant forbearances to borrowers who contact them and indicate that they have been adversely affected by the disaster and need temporary relief from their loan obligations. If the holder believes that the borrower has been harmed and needs assistance, the holder may grant a forbearance for up to 3 months based on either the borrower's oral or written request for assistance, which must be documented in the holder's files.

2. The holder does not need to obtain supporting documentation or a signed written agreement from the borrower to justify a forbearance for this initial 3-month period. The Secretary will decline to enforce the requirements of 34 CFR 682.211(c) for this period.

3. A continuation of the forbearance past this 3-month period will require supporting documentation and a written agreement from the borrower.

We will notify you if additional areas are designated by the President or FEMA. Questions and concerns may be addressed to the Department’s toll-free number at 1-800-433-7327, Monday through Friday from 9:00 a.m. to 5:00 p.m. EST.