Common Manual Update



LPM NO.: L2000-7 Effective Date: As Indicated
Pub. Date: September 1, 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 in 2001. However, these changes are effective before the next update is scheduled to be delivered.

Voluntary Flexible Agreements

The Common Manual has been updated to include an explanation of Voluntary Flexible Agreements (VFAs). VFAs are individual agreements between the Department and some guarantors that may create unique servicing requirements for loans made under such agreements. Guarantors participating under VFAs will work with their school and lender partners to explain any unique requirements. As of August 16, 2000, no VFAs have been approved by the Department.

Affected Sections: 2.1.A.
Effective Date: Any VFA approved by the Department of Education for implementation on or after October 7, 1998
Basis: Sections 428(b) and (c); and 428A of the Higher Education Act of 1965 as amended; Federal Register dated July 28, 1999.
Policy Information: Reference #454
Guarantor Comments: None

PLUS Student Death Requirements

The Common Manual has been updated to delete the references to the July 23, 1992 date as it relates to the death of a student for whom a parent obtained a PLUS loan. PLUS loan borrowers who were not eligible for discharge due to the fact that the student for whom they obtained the PLUS loan died prior to July 23, 1992, may now be eligible for discharge of their loan. Lenders and guarantors will not be required, but may want to, research their records for PLUS loan borrowers that may now qualify for discharge under this revised provision.

Affected Sections: 8.1.E., CCI8.1.E., 8.2.B., CCI8.2.B.
Effective Date: PLUS loan death claims based on the student’s death occurring prior to July 23, 1992 and filed by the lender within 60 days of re-determining eligibility on or after January 1, 2001, unless implemented earlier by the guarantor. For PLUS loan death claims based on the student's death occurring on or after July 23, 1992, a lender must file this type of claim within 60 days of determining a borrower is eligible for discharge.
Basis: §682.402(b)(1)—as updated in the Federal Register dated April 16, 1999 – Final Rule – Corrections and other Technical Changes.

GEN-92-21, October 1992, page 23.


Policy Information: Reference #356
Guarantor Comments: None

Blanket Certificate of Loan Guarantee Program

A blanket certificate of loan guarantee (blanket guarantee) permits a lender to make Stafford and PLUS loans to eligible borrowers without receiving prior approval from the guarantor.

Lenders may contact individual guarantors for information on the availability of, and participation in, a blanket guarantee program.

See subsection 9.1.B. for information regarding the use of a blanket guarantee for Federal Consolidation loans.

Affected Sections: 3.3.B.
Effective Date: Loans originated under a Blanket Certificate of Loan Guarantee approved by the Department on or after October 1, 1998.
Basis: HEA 428(n); GEN-99-22.
Policy Information: Reference #456
Guarantor Comments: None