Common Manual Update |
LOUISIANA STUDENT
FINANCIAL ASSISTANCE COMMISSION
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| LPM NO.: | L2001-2 | Effective Date: | As Indicated |
| Pub. Date: | February 5 , 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.
Updates
to The Life of a Stafford Loan Flow Chart
"The Life of a Stafford
Loan" flow chart in the Common Manual has been revised to include a reference
to the Loan Forgiveness Program for Teachers.
| Affected Sections: | 2.2.A. |
| Effective Date: | New borrowers on or after October 1, 1998. |
| Basis: | HEA 428J; §682.215. |
| Policy Information: | Reference 478 |
| Guarantor Comments: | None. |
Updates
to The Life of a Stafford Loan and The Life of a PLUS Loan Flow Charts
"The Life of a Stafford Loan" and "The Life of a PLUS Loan" flow charts in the
Common Manual have been revised to indicate that a borrower may be determined
eligible for a closed school loan discharge with or without submitting an application.
| Affected Sections: | 2.2.A. |
| Effective Date: | Closed school loan discharge determinations, made without the borrower's submission of a request form on or after July 1, 2000. |
| Basis: | Dear Guaranty Agency Letter GEN-99-37/99-L-218/99-G-325, dated April 1999, and Final Rules published in the Federal Register on October 29, 1999. |
| Policy Information: | Reference 479 |
| Guarantor Comments: | None. |
Updates
to The Life of a Stafford Loan and The Life of a PLUS Loan Flow Charts
"The Life of a Stafford Loan" and "The Life of a PLUS Loan" flow charts in the
Common Manual have been revised to indicate the availability of an unpaid refund
discharge for an eligible borrower. In addition, language has been added to
clarify that an outstanding loan balance may remain after the processing of
a discharge.
| Affected Sections: | 2.2.A. |
| Effective Date: | Completed unpaid refund discharge requests received, or eligibility determinations made, on or after July 1, 2000. |
| Basis: | §682.402(l). |
| Policy Information: | Reference 480 |
| Guarantor Comments: | None. |
Updates
to The Life of a PLUS Loan Flow Chart
"The Life of a PLUS
Loan" flow chart in the Common Manual has been revised to indicate that the
lender will file a bankruptcy claim with the guarantor only when the borrower
files a Chapter 12 or 13 bankruptcy or hardship petition.
| Affected Sections: | 2.2.A. |
| Effective Date: | Loans on which a borrower files a petition for bankruptcy on or after October 8, 1998. |
| Basis: | §682.402(f)(5)(i)(A). |
| Policy Information: | Reference 481 |
| Guarantor Comments: | None. |
Loan
Sales Involving the MPN
The Common Manual has been revised to clarify that in the case of loans originated
using a Master Promissory Note (MPN), each loan may be separately enforced based
on the original MPN or a true and exact copy of the MPN. If a lender sells a
loan but retains some loans under the existing MPN, then each lender may own
separate loans under the same MPN. Also, if the original lender assigns the
right to offer new loans under that MPN, then the original lender may not make
new loans under the MPN. The new lender may use the original MPN or a true and
exact copy of the MPN to enforce any loans it acquires and any future loans
it makes using that MPN.
| Affected Sections: | 3.4.B., 6.1.A. |
| Effective Date: | Retroactive to the implementation of the Master Promissory Note (MPN). |
| Basis: | DCL GEN-98-25; NCHELP's Master Promissory Note Q & A document dated May 2000. |
| Policy Information: | Reference 482 |
| Guarantor Comments: | None. |
Dependent Students Not Eligible for Additional Unsubsidized Stafford Funds at Nonparticipating PLUS Loan Schools
Based upon the 1998 Amendments to the Higher Education Act of 1965, the Department of Education stated that granting automatic eligibility for additional unsubsidized Stafford loans based on a school's decision not to participate in the PLUS loan program is beyond the scope of the intent of the law. The Department clarified its position on this issue in the preamble to the Notice of Proposed Rulemaking published in the Federal Register on August 10, 1999. The manual has been revised to clarify that a school is not able to certify additional unsubsidized Stafford loan funds for a dependent student based on the school's decision not to participate in the PLUS Loan Program. If a dependent student's parent is unable to obtain a PLUS loan at a school that participates in the PLUS loan program, the school may certify additional unsubsidized Stafford loan funds for the student to the full extent of the loan limit—provided that the loan funds do not exceed the student's need.
| Affected Sections: | 5.3, 5.7.H. |
| Effective Date: | Unsubsidized Stafford loan funds certified by the school beginning no later than July 1, 2000. |
| Basis: | NPRM published in the Federal Register on August 10, 1999, page 43438. |
| Policy Information: | Reference 483 |
| Guarantor Comments: | None. |