FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L2002-5||Effective Date:||As Indicated|
|Pub. Date:||April 10, 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 summary informs schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manuals next annual update in 2002. However, these changes are effective before the next update is scheduled to be delivered.
Assignment of a Loan
Subsections 8.3.B. and CCI8.3.B of the Common Manual have been updated to clarify that the assignment of a loan may be incorporated into the text of the claim form and if it is, the lender is not required to provide any other type of information or certifications regarding the assignment of the loan. In addition, lenders that are filing claims using an electronic claim process should work directly with the guarantor to develop an accurate, timely assignment for the loan.
|Effective Date:||For provisions related
to subsection 8.3.B., retroactive to the implementation of the Common
For provisions related to subsection CCI8.3.B., effective for claims filed on and after the guarantor's implementation of the claim portions of chapter CCI8.
|Policy Information:||Reference 566|
Consolidation Loan Eligibility Criteria
The Common Manual has been revised to state that by signing the common Consolidation Loan Application and Promissory Note, the borrower certifies that he or she meets those eligibility criteria that are specifically required, by statute and regulations, to be certified. Separate certifications are not necessary.
|Effective Date:||Consolidation loans made using the common Consolidation Loan Application and Promissory Note.|
|Policy Information:||Reference 567|
Forbearance for Teacher Loan Forgiveness
The Common Manual Forbearance Eligibility Chart has been updated to show the new requirements for two types of teacher loan forgiveness forbearance.
The Common Manual has also been updated to clarify that a lender must grant a mandatory administrative forbearance for payments of principal and interest that are delinquent or that would be due during the period not to exceed 60 days while the lender is awaiting a completed Teacher Loan Forgiveness Application from the borrower. The lender must also grant a mandatory administrative forbearance for the period beginning on the date the lender receives the completed Teacher Loan Forgiveness Application from the borrower to the date the lender receives a denial of the request or the forgiveness amount from the guarantor. The borrower is no longer required to request a forbearance in either case.
|Affected Sections:||7.11, 7.11.C., 7.11.D.|
|Effective Date:||Teacher loan forgiveness requests received by the lender on or after July 1, 2001.|
|Basis:||Final Rules published in Part III of the Federal Register, pages 34761-34766, dated June 29, 2001; §682.215(e)(1)(ii) and (iii).|
|Policy Information:||Reference 568|
The Common Manual has been revised to clarify that for loans made using a Master Promissory Note (MPN), the authorization for disbursement by electronic funds transfer (EFT) or master check on the initial or any subsequent loan is included on the MPN. Also, wording changes were made to facilitate electronic records.
|Affected Sections:||4.10, 6.2.D|
|Effective Date:||Disbursements made by electronic funds transfer (EFT) or master check on loans made using a Master Promissory Note (MPN).|
|Basis:||Final Rules published in Part III of the Federal Register, pages 34762-34766, dated June 29, 2001.|
|Policy Information:||Reference 569|
Consolidation Loan Applications
The Common Manual has been revised to delete the reference to a 10-year maximum repayment period from the income-sensitive repayment information to allow for other maximum repayment periods.
|Effective Date:||Retroactive to the implementation of the Common Manual.|
|Basis:||Final Rules published in Part III of the Federal Register, pages 34762-34766, dated June 29, 2001; §682.209(a)(7)(viii)(C)|
|Policy Information:||Reference 570|