LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L98-1||Effective Date:||As Indicated|
|Pub. Date:||February 27, 1998||Distribution:||Lenders and Schools|
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.
Eligibility Requirements Specific to Stafford Loans
Newly revised regulations governing Stafford loan eligibility clarify that if a student is eligible for a subsidized Stafford loan in an amount that exceeds $200, the school must certify an application for a subsidized Stafford loan prior to certifying an unsubsidized Stafford loan. If the student is eligible for a subsidized Stafford loan in an amount of $200 or less, the school is not required to certify an application for the subsidized Stafford loan prior to certifying the unsubsidized Stafford loan. In such cases, the school may include the amount of subsidized Stafford eligibility in the unsubsidized Stafford loan.
Section 5.3 of the Common manual will be revised to reflect this change, which is effective for loan applications certified by the school on or after July 1, 1998.
Total and Permanent Disability Discharge for Consolidation Loans Clarified
In recent parity regulations, the Department of Education clarified requirements regarding the discharge of Consolidation loans due to total and permanent disability. Although the substance of the existing requirements has not changed, subsections 8.2.C. and 9.6.E. of the Common Manual will be revised to more closely match the new regulatory language. The new language clarifies that a borrower must be certified totally and permanently disabled according to FFELP discharge criteria for all underlying loans included in the Consolidation loan -- including any non-FFELP loans.
This change is effective for Temporary Total and Permanent Disability Certification Request forms and Total and Permanent Disability Cancellation Request forms received by the lender on or after July 1, 1998. Subsections 8.2.C. and 9.6.E. will be revised to reflect this clarification.