Common Manual Update

LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
OFFICE OF STUDENT FINANCIAL ASSISTANCE

LOAN PROGRAM MEMORANDUM

LPM NO.: L2000-2 Effective Date: As Indicated
Pub. Date: February 29, 2000 Distribution: Lenders and Schools
Topic: Common Manual Update

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.

LOSFA provides the following 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. However, some changes are effective before the next update is scheduled to be delivered.

Backdating Exception for In-School Deferments

The Common Manual has been revised to clarify that in-school deferments are not bound to the 6-month backdating rule that applies to other types of deferment. The lender must grant an in-school deferment for each eligible period of enrollment and may bill the Department for interest benefits on a subsidized Stafford loan, regardless of the date enrollment began. This change reflects Final Rules published in the Federal Register on October 29, 1999. Lenders may implement this provision earlier than the regulatory effective date to maximize the benefit to FFELP borrowers.

Affected Sections: 7.9.A., 7.10.A., A.1.B.
Effective Date: In-school deferments granted on or after July 1, 2000, unless implemented earlier by the lender.
Policy Information: Reference #379
Guarantor Comments: None

Unemployment Benefits Documentation Acceptable for Unemployment Deferment

The Common Manual has been revised to incorporate an unemployment deferment provision of Final Rules published in the Federal Register dated November 1, 1999. A lender may grant an unemployment deferment to a borrower who requests an unemployment deferment and provides to the lender evidence of the borrower's eligibility to receive unemployment benefits. In this case, the borrower need not provide the lender with the common deferment form or other additional information or documentation.

Affected Sections: 7.10.E.
Effective Date: Unemployment deferments granted on or after July 1, 2000, unless implemented earlier by the lender.
Policy Information:  Reference #380
Guarantor Comments:  None

Endorser Due Diligence

The Common Manual has been revised to incorporate endorser due diligence provisions of Final Rules published in the Federal Register on October 29, 1999. Under these provisions, the lender must complete endorser due diligence requirements before filing a default claim. Prior Common Manual policy required the lender to complete endorser due diligence during the delinquency period of the loan.

Affected Sections:  8.1.E., and CCI8.1.E.
Effective Date:  Default claims for which the first day of delinquency on the oldest outstanding due date is on or after July 1, 2000.
Policy Information:  Proposal #381
Guarantor Comments: None

 

Home Page Policy and Procedure Menu
Information Center Menu LPM/LPB Index