Common Manual Update - Correction

LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
OFFICE OF STUDENT FINANCIAL ASSISTANCE

LOAN PROGRAM MEMORANDUM
LPM NO.: L99-14 Effective Date: As Indicated
Pub. Date: October 18, 1999 Distribution: Lenders and Schools
Topic: Common Manual Update - Correction

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.

On September 2, 1999, LOSFA distributed L99-10, Common Manual Update which provided summaries to inform schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manual’s next annual update. A correction to "Three Day Delivery Period for EFT and Master Check", pages 5 and 6 of that LPM was issued on September 17, 1999. This LPM provides another correction to that bulletin language.

Approved policy #338, Conditions for Authorized Deferment, incorrectly stated that a lender may grant an in-school deferment to a borrower based on student status information received by the lender. To accurately reflect the Common Manual language approved, this should read: "A lender must grant an in-school deferent to a borrower based on student status information that documents the borrower’s enrollment of at least half-time."

Attached to this LPM is a corrected front and back page 5 and 6 for L99-10. Please destroy the incorrect page and replace it with the attached page.

Deadline for returning loan proceeds

School must return loan proceeds no later than August 19, 1999 (10 business days after latest initial delivery date).

School must return loan proceeds no later than July 23, 1999 (10 business days after latest initial delivery date).

School must return loan proceeds no later than September 2, 1999 (10 business days after last day of the conditional period).

Note: If, during the return period, the school determines that the student has become eligible to receive the loan proceeds, the school may deliver the proceeds rather than return them to the lender, provided the delivery is made on or before the last day of the return period.

School must return loan proceeds no later than August 6, 1999 (10 business days after last day of the conditional period).

Note: If, during the return period, the school determines that the student has become eligible to receive the loan proceeds, the school may deliver the proceeds rather than return them to the lender, provided the delivery is made on or before the last day of the return period.

 

Affected Sections:                     6.3.E.
Effective Date:                         Loan proceeds disbursed by EFT or master check and received by the school on or after July 1, 1999
Policy Information:                   Reference # 337
Guarantor Comments:             None

Conditions for Authorized Deferment

Common Manual policy requires a borrower to request an in-school deferment either verbally or in writing and provide the lender with documentation necessary to support the borrower’s eligibility for deferment.

The Higher Education Amendments of 1998 no longer require a borrower to request an in-school deferment. A lender must grant an in-school deferment to a borrower based on student status information that documents the borrower’s enrollment of at least half-time. The lender may use documentation from an appropriate source (e.g., the borrower, school, guarantor, National Student Loan Clearinghouse, or NSLDS)—provided the documentation supplies sufficient information to ensure that the borrower meets all eligibility criteria.

Affected sections:                     7.9.A., 7.9.B.
Effective Date:                         Deferments granted on or after October 1, 1998
Policy Information:                   Reference # 338
Guarantor Comments:             None

Final Demand Requirement Clarified

Current Common Manual policy states that a final demand letter must require borrowers to remit payment in full and warn that if no payment is received, the default will be reported to a national credit bureau. To more accurately reflect regulatory and statutory requirements, this policy has been revised to state that a final demand letter must require the borrower to remit payment in full and warn that if the borrower defaults on the loan, the default will be reported to a national credit bureau.

Affected Sections:                     8.1.D., CCI8.1.D.
Effective Date:                         Retroactively to the implementation of the Common Manual
Policy Information:                   Reference # 339
Guarantor Comments:             None

 

 

 

 

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