FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L2002-1||Effective Date:||As Indicated|
|Pub. Date:||January 2, 2002||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.
The following summaries inform schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manual's next annual update in 2002. However, these changes are effective before the next update is scheduled to be delivered.
Glossary Definition of "Week"
The Common Manual has been updated to align the glossary definition of "Week" with language pertaining to a "week of instruction" included in subsection 4.1.C. of the manual.
|Affected Sections:||appendix G|
|Effective Date:||A "week of instruction" as determined by the school on or after July 1, 2001.|
|Basis:||§668.8(b)(2) and (3).|
|Policy Information:||Reference 549|
Penalties for Due Diligence Violations and Gaps
The Common Manual has been revised to ensure consistency between subsections that address the cure of a loss of guarantee. Some Common Manual cites already correctly identify that a loss of a loan's guarantee occurs if there is a gap of 46 days or more. Subsections 8.8.C. and CCI8.8.C., however, incorrectly state that the loss of guarantee occurs if there is a gap of 46 days or more and one or more violations. The revised policy amends these two subsections, and states that the earliest unexcused violation date is the 46th day (or 61st day in the case of a transfer) following the date of the last collection activity that started the gap.
|Affected Sections:||8.8.C., CCI8.8.C|
|Effective Date:||Retroactive to loans on which the first day of delinquency on the oldest outstanding due date is after July 1, 1996|
|Basis:||§682 Appendix D; DCL 96-L-186/96-G-287, Q&A #68 and #69|
|Policy Information:||Reference 551|
Applying for a Stafford Loan
The Common Manual has been updated to state that the Free Application for Federal Student Aid (FAFSA) is the only application a student may use to apply for a Stafford loan.
|Affected Sections:||8.8.C., CCI8.8.C|
|Effective Date:||Retroactive to the implementation of the Master Promissory Note (MPN)|
|Basis:||HEA 432(m)(1)(c); §682.102(a)—as updated in the Federal Register dated November 1, 1999|
|Policy Information:||Reference 552|
Consolidation Loan Applications
The Common Manual is being revised to delete all references to Consolidation loan forms other than the common Consolidation loan forms and to delete references to the differences between using the common Consolidation loan forms and other Consolidation loan forms. The new common Consolidation forms were issued by the Department in October 2000 in GEN-00-16 which allowed immediate use of the forms, but did not require the use of the forms for all Consolidation loan applications until January 1, 2002.
|Affected Sections:||9.2, 9.3.B., 9.3.C|
|Effective Date:||Consolidation loan applications signed by borrowers on or after January 1, 2002|
|Policy Information:||Reference 553|
Common Supplemental Claim Policies Implemented
Guarantors developed a common Supplemental Claim Form and related policies some time ago. While other aspects of the Common Claim Initiative (CCI) have been deferred to permit the development and implementation of electronic formats, the supplemental claim filing process is not currently being developed in the electronic arena. Guarantors believe significant efficiencies can be achieved by implementing the revised minimum supplemental claim amount and the common form. Common policy already permits the lender a 90-day period in which to file the supplemental claim, measured from the date the lender receives the claim payment. The Common Manual guarantors are implementing two new common policies related to supplemental claims, as follows:
• The lender may not file a supplemental claim for less than $50. This amount may include principal, interest, or both.
• Lenders must submit the common Supplemental Claim Form to request claim payment increases.
|Effective Date:||Supplemental claim requests filed by the lender on or after July 1, 2002|
|Policy Information:||Reference 554|