Common Manual Update
STUDENT FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L2001-1||Effective Date:||As Indicated|
|Pub. Date:||January 4, 2001||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.
Default Aversion Assistance (DAA) Delinquency Status
In April, 2000, a DAA work group was formed at the request of the Governing Board to address DAA time frame issues and to determine if consensus could be reached. The work group included representatives of several guarantors and community organizations, including SLSA and NCHELP. The work group developed a survey that was sent to all guarantors in May, 2000. From the results of the survey, it was determined that although it was not possible to obtain consensus on all DAA time frames, guarantors were in virtual consensus on the DAA time frame for lender notification to guarantors of changes in delinquency status of the loan. Survey responses indicated that all guarantors, except one, would agree to require lenders to notify the guarantor of any changes in delinquency status on a loan that result in a change to the payment due date, even if the delinquency is not reduced below the point at which the guarantor requires the lender to cancel the DAA request. Based on these survey results, a policy proposal was developed and the Common Manual has now been revised to incorporate this requirement.
|Affected Sections:||8.1.J., CCI 8.1.J.|
|Effective Date:||LOSFA has always had this policy. Retroactive to the implementation of the Common Manual.|
|Policy Information:||Reference 470|
The Common Manual has been revised to align subsections of chapter 8 and CCI chapter 8 to clarify that the completion of intensive collection activities (ICA)/location cure activities alone does not necessarily result in the reinstatement of insurance or reinsurance of a loan that has lost its guarantee.
|Affected Sections:||8.8.G., 8.8.H., 8.8.K., CCI8.8.G., CCI8.8.H., CCI8.8.K.|
|Effective Date:||Retroactive to the implementation of the Common Manual.|
|Basis:||34 CFR Section 682, Appendix D.|
|Policy Information:||Reference 472|
Revised policy adds information concerning the common Consolidation loan forms approved by the Department in October 2000. For Consolidation loans made using the common Consolidation loan forms:
1. Married couples applying for a spousal consolidation loan no longer need to complete a separate form, but must complete all applicable sections of the common Consolidation loan forms, including those that apply to spousal consolidation.
2. The borrower's authorization for the release of information is now included on the application and promissory note. Holders must verify or complete the information on the new verification certificate and certify such information in accordance with the instructions on the form.
3. A borrower must certify that he or she does not owe a refund on a Pell, SEOG or LEAP grant and that all loans being consolidated were used to finance the education of the borrower, the borrower's spouse, or the borrower's child.
4. Borrowers who wish to add eligible loans to a Consolidation loan must complete and return the Request to Add Loans form to the lender so that it is received by the lender within 180 days of the date the original Consolidation loan was made. In addition, the lender must disclose new repayment terms to the borrower, if the terms of the borrower's Consolidation loan change due to the addition of loans within the 180-day add-on period.
|Affected Sections:||9.2, 9.3.B., 9.3.C., 9.5.A.|
|Effective Date:||For all Consolidation loans made using the common Consolidation loan forms that were approved for use by the Department in October 2000, and must be used for all Consolidation loan applications signed on or after January 1, 2002.|
|Basis:||DCL GEN-00-16/G-00-330/L-00-224, dated October 2000.|
|Policy Information:||Reference 473, 474, 475, and 476|