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.

Summer Bridge Extension

The Common Manual has been revised to add that a PLUS borrower may be eligible for a summer bridge extension and removes the unnecessary assertion that a Stafford loan borrower is not required to request the summer bridge extension if the borrower has not used the grace period.

Reduced Interest Rates

The Common Manual has been revised to include information in Chapter 7 regarding the servicing of loans with interest rates that are less than the statutory maximum interest rate (statutory rate). If the lender chooses to offer the borrower an interest rate that is less than the statutory rate, the lender must disclose to the borrower that the rate will end on the date the loan is purchased by the guarantor as a default or ineligible borrower claim. After the defaulted loan or an ineligible borrower claim is purchased by the guarantor, the loan reverts to the statutory rate. Also, minor revisions are made to subsection A.1.A. to more closely reflect regulatory guidance.

Penalties for Due Diligence Violations

The Common Manual has been revised to ensure consistency between subsections that address the cure of a loss of guarantee. The policy revises subsections 8.8.C. and ^CCI8.8.C., adding a statement that the earliest unexcused violation date is the day after the date of default if there are three or more due diligence violations of 6 days or more each (21 days or more in the case of a transfer) and no gap of 46 days or more (61 days or more in the case of a transfer). It also clarifies that the references to subsections 8.8.H. and ^CCI8.8.H. are for cure procedures.

Cure Procedures for Due Diligence Violations and Gaps

Subsections 8.8.H. and ^CCI8.8.H. of the Common Manual have been restructured and reworded to clarify the reasons for a loss of guarantee and the cure procedures that must be performed to reinstate the guarantee on a loan after the guarantee has been canceled as a result of due diligence violations or gaps. Previously, the reasons for a loss of guarantee were incorrectly identified as options available for curing the loan.

Common Findings for Program Reviews

The Common Manual has been revised to remove outdated examples of common program review findings, e.g., late refunds, incorrect refund calculation, and noncompliance with Appendix D from 34 CFR 682. The Common Manual has also been revised to add current examples of common program review findings, e.g., improper performance of return of Title IV funds procedures, including incorrect calculations, late returns to lenders, funds returned to the wrong Title IV account, and errors on ED Form 799.

Delete Glossary Definition of Multiple Data Entry Processor

The Common Manual has been revised to delete the definition of "Multiple Data Entry (MDE) Processor" from appendix G. This term is not used within the text of the manual.