Common Manual Updates
LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L98-11||Effective Date:||As Indicated|
|Pub. Date:||October 20, 1998||Distribution:||Lenders and Schools|
|Topic:||Common Manual Updates|
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.
Prepayments and Claim Documentation
Current Common Manual guidance requires the lender to document the borrowers instructions regarding the application of prepayments in the claim file. This requirement is not included in the common Claim Form and instructions endorsed by the FFELP guarantors. To align common policy with the provisions of the Claim Form and instructions, this requirement is eliminated for claims filed by the lender on or after March 1, 2000, unless implemented earlier by the guarantor. However, the guarantor may require the lender to provide documentation of any borrower request regarding the application of payments as part of a program review or to substantiate a claim in the event of a borrower dispute.
This change will be incorporated in subsection 7.8.B. of the Common Manual.
Summer Bridge Revisited
After a review of current industry practices, the FFELP guarantors have determined that some disparities exist in the way "summer bridge" extensions are processed. The guarantors have adopted a standard policy to promote more consistent treatment of borrowers who are enrolled through the end of the spring academic period and re-enroll for the fall academic period.
A borrower who is enrolled through the end of the spring academic period and who qualifies for an extension of the in-school deferment on his or her loan may provide a written or verbal notice to his or her lender advising the lender of his or her intent to re-enroll for the fall academic period. The lender must document the borrowers request and the date on which the borrower anticipates the start of the fall academic period.
If the lender does not receive a notice from the borrower regarding his or her intent to re-enroll for the fall academic period, but subsequently receives documentation of the borrowers in-school deferment eligibility for the fall period, the lender may retroactively process the summer bridge extension.
Subsection 7.10.B. of the Common Manual is being revised to reflect this change, which is effective for summer bridge extensions processed by the lender on or after January 1, 1999, unless implemented earlier by the guarantor.
Change to Preclaim Reporting Requirements
The recently published standard Preclaim Request Form, which is part of the Common Claim Initiative (CCI), included a requirement that lenders provide demographic information for PLUS dependent students for all loans with a first disbursement on or after September 1, 1998. Lenders and servicers have responded that this information currently is not collected and that efficient mechanisms are not yet in place to collect it.
In response to the lender community, the requirement is being revised. Lenders must provide the PLUS student's last-known complete address and telephone number, including information about the validity of each, if that information is available. This information must be provided for preclaim requests filed by the lender on or after September 1, 1999, unless the new Preclaim Form and the policies implementing the new process are implemented earlier by the guarantor.
This change is being added to the "Information to be Provided for Preclaim Request" table, which appears at the end of chapter CCI 8.