Common Manual Update



LPM NO.: L2000-6 Effective Date: As Indicated
Pub. Date: August 9, 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.

Delivery or Return of Loan Proceeds

The Common Manual has been updated to clarify that in overaward situations schools must indicate in writing the reason for returning loan proceeds and, if applicable, provide the student’s withdrawal date. In all other cases, schools are encouraged to provide the reason for returning loan proceeds and, if applicable, provide the student’s withdrawal date.

Affected Sections: 6.3.I. (Delivery or Return of Loan Proceeds Chart, Footnote 2)
Effective Date: Effective retroactively to the implementation of the Common Manual.
Basis: §668.19(a)(4); §668.22(j); §668.58(c); §668.60(b)(3); §668.167(b); §682.604(h); §682.607(c); Department of Education Policy Bulletin dated June 2, 1997.
Policy Information: Reference #455
Guarantor Comments: None


NOTE: The Policy Committee has identified two important changes relating to the new 270-day delinquency period that should have appeared in the 2000 update but were overlooked in this recent revision. Each of these changes is applicable to CCI Chapter 8 of the 2000 update of the Common Manual and will be corrected in the 2001 update as technical edits. However, due to the significance of the errors, the Policy Committee believes that the community should be aware of the changes in the interim.
The first change is to subsection CCI8.3.B., page 36, column 2, carot under "Claim Form". The change is as follows:

• Contact your guarantor for more information regarding procedures for documenting the requisite 180 270-day delinquency period. See section 1.5 for contact information.

The second change is to subsection CCI8.8.D., page 48, column 2, bullet 1. The change is as follows:

* A default claim by the 270 360th day of delinquency.

LOSFA’s Default Aversion Assistance (DAA) Time Frames

LOSFA’s default aversion assistance time frames follow:

DAA Cancellation Date (1)                                              30
Skip DAA Available (2)                                                   All
Deadline for Refiling Rejected DAA Request (3)        150

(1)  If the delinquency date falls on or below this number of days delinquent, the lender must notify LOSFA to cancel the request for DAA.

(2)  The period of time, expressed in number of days delinquent, established by LOSFA in which a lender may request skip tracing from LOSFA. An entry of "all" specifies that skip DAA is available throughout the life of the loan.

(3)  The deadline, expressed in number of days delinquent, for the lender to refile the request for DAA that was originally filed timely (within the 60-120 day period), but was rejected by LOSFA.. Resubmissions which occur by the deadline are considered to be timely submitted DAA requests, for which a subsequent claim would be paid without a DAA penalty. Resubmissions that occur later than these deadlines are subject to the interest penalties described in Appendix D of 34 CFR 682.

LOSFA’s time frame is 150, "as long as the original request was filed during the 60-120 day DAA request period.

Lenders must notify LOSFA of any change in the delinquency status of a loan, even if the delinquency is not reduced below the point at which the DAA request would be canceled.