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 in 2001. However, these changes are effective before the next update is scheduled to be delivered.

The Common Manual has been updated to include the following new regulatory requirements for exit counseling:

• Schools may use audiovisual or interactive electronic means to conduct exit counseling.
  
• Schools may provide exit counseling materials to study-abroad students by mail.
  
• Schools may use interactive electronic means for students who withdraw or fail to complete exit counseling.
  
• Schools are now required to provide the information listed in regulations and in subsection 4.9.C. of the Common Manual.
  
• Schools must inform students with SLS loans that refinancing of SLS loans is available.
  
• Schools must explain conditions for full cancellation of the loan, as well as partial cancellation.
  
• Schools must provide each student with information about the Student Loan Ombudsman’s office.
  
• Schools must explain the use of the Master Promissory Note.

Schools must take reasonable steps to ensure that the student receives, participates in, and completes exit counseling if it is conducted by interactive electronic means.

The Common Manual now includes the following definition of disburseable aid:

Disburseable aid equals disbursed aid plus the amount of any other Title IV aid that could have been appropriately disbursed to the student during the payment period or period of enrollment in which the student withdrew. Title IV aid that could have been disbursed includes aid that the school awarded to the student for the payment period or period of enrollment, but that was not credited to the student's account or disbursed to the student as of the date that the school became aware that the student withdrew. These funds are subject to the late disbursement and delivery provisions described in subsections 6.2.H. and 6.3.H. An example of aid that could have been disbursed would be funds that the school could not receive from a lender due to technical difficulties in the disbursement process or circumstances beyond the school's control.

The Common Manual has been revised to define the scheduled breaks that schools must exclude when calculating the percentage of the payment period or period of enrollment that a student completed. For the purpose of this calculation, "calendar days" refers to all days within the period, excluding scheduled breaks of at least five consecutive days. Scheduled breaks measure the time between the last day of scheduled classes and the next day that classes are held, and include weekends and any periods during which the student is on an approved leave of absence. Following are examples of the periods that should be excluded from the calculation:

If a break begins on Wednesday, no classes are held the following weekend, and classes resume on Monday, the weekend days are included in the break. By including the weekend, the break is five days long, and five days must be excluded from both the numerator and the denominator of the aid earned calculation.

If a break begins after classes end on Friday and classes resume on Monday following a one-week break, both weekends are included in the break. This break is nine days long, and nine days must be excluded from both the numerator and the denominator of the aid earned calculation.

Current Common Manual policy has been revised to differentiate between the required and recommended information that a school must include in entrance counseling for Stafford loan borrowers. In conducting entrance counseling, the Department stipulates that a school must:

• Explain the use of the Master Promissory Note.
  
• Emphasize to the student the seriousness and importance of the repayment obligation the student is assuming.
  
• Describe in forceful terms the likely consequences of default, including adverse credit reports and litigation.
  
• Except for student who receives a loan made or originated by the school, the school must emphasize that the student is obligated to repay the full amount of the Stafford loan, even if the student does not complete the program, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student purchased from the school.

In an effort to improve a student’s understanding of his or her loan repayment obligation, the Department recommends that the school provide additional information as outlined in Appendix D of 34 CFR 668 and The Federal Student Aid Handbook as part of the entrance counseling provided.

The Common Manual has been updated to reflect the following provisions of the Master Promissory Note (MPN):

• The MPN authorizes the lender to defer all of a borrower’s FFELP loans based on information indicating the borrower is enrolled 
  at least half time.
  
• The MPN authorizes the lender to capitalize accrued interest on all the borrower’s FFELP loans, including those made under the 
  MPN.
  
• The MPN authorizes the lender to align repayment of the borrower’s Stafford and SLS loans.

These provisions have been in effect since the implementation of the first MPN.

The definition for Default Aversion Request Period is being updated as follows:

Default Aversion Request Period: The period during which a lender must submit a request for default aversion assistance from a guarantor. This period begins no earlier than the 60^th day and ends no later than the 120^th day of the borrower's delinquency.