FINANCIAL ASSISTANCE COMMISSION
|LPM NO.:||L2004-4||Effective Date:||As Indicated|
|Pub. Date:||April 8 , 2004||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 nation’s guarantors provide 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 July 2004. These changes will also be incorporated into the February 2004 Integrated Common Manual. The Integrated Common Manual is available on several guarantor websites, and it is also available on NCHELP’s website at www.NCHELP.org in the e-library. Please carefully note the effective date of each policy change.
of a Loan and the Claim Form
The Common Manual has been updated to acknowledge that the Claim Form contains the loan assignment language that meets the requirement that the claim file contain the holder’s original assignment of a loan to the guarantor. A lender that files its claims using the paper Claim Form is not required to provide any other information or certifications. Other assignment options previously provided in the manual have been removed.
A lender using an electronic claim filing process should continue to work directly with the guarantor to develop an accurate, timely assignment process that corresponds with the claim filed
|Affected Sections:||12.1.D Claim File Documentation|
|Effective Date:||Claims filed by the lender on or after July 1, 2003.|
|Policy Information:||761/Batch 112|
Deferment Eligibility Criteria
The Common Manual has been revised to provide additional policy information for determining an unemployment deferment period, as follows:
|Affected Sections:||10.16 Unemployment
10.16.C Length of Deferment—Unemployment
|Effective Date:||Unemployment deferment requests processed by a lender on or after March 14, 2003.|
|Basis:||§682.210(a)(6)(i); §682.210(b)(1)(v); §682.210(h); DCL GEN-03-04.|
|Policy Information:||763/Batch 112|
Convictions for Drug Possession or Distribution and Their Effect on
Title IV Aid Eligibility
The Common Manual has been revised to update information regarding drug convictions to differentiate between a student who has his or her eligibility for Title IV aid denied when sentenced by a court due to conviction of possession or distribution of a controlled substance and a student who has his or her eligibility for Title IV aid denied due to drug conviction information that he or she reports on the Free Application for Federal Student Aid (FAFSA). In addition, language quoted directly from the Student Aid Report (SAR) has been replaced with a general statement that advises schools and lenders that the SAR provides a warning regarding a student’s potential loss of Title IV aid eligibility if he or she is convicted of possession or distribution of a controlled substance.
|Affected Sections:||5.1.B Student Eligibility Requirements|
|Policy Information:||764/Batch 112|
Delinquency Existing before an Out-of-School Date Change
The Common Manual has been revised to state consistently that when a lender processes an earlier out-of-school date on a loan that is delinquent, the lender may not resolve that delinquency with an administrative forbearance. The lender may apply an administrative forbearance for the period from the adjusted (correct) repayment start date to the previous repayment start date.
|Affected Sections:||9.5.E Revised Out-of-School Dates after Conversion to Repayment|
|Effective Date:||Retroactive to the implementation of the Common Manual.|
|Basis:||§682, Appendix D.|
|Policy Information:||765/Batch 112|
Claim Form Data Requirements
The Common Manual has been updated to align the claim filing policy with the Claim Form instructions. Revised policy clarifies that all loans included on the Claim Form must have the same lender ID and, if available, the same claim review status, in addition to the same loan type, due date, and interest-paid-through date.
|Affected Sections:||12.1.A Claim Filing Requirements|
same “lender ID” requirement is effective for claims filed by
a lender using the Claim Form on or after July 1, 2002.
The same “claim review status, if available” requirement is effective for claims filed by a lender using the Claim Form on or after July 1, 1998.
|Policy Information:||766/Batch 112|
Timely Filing for Default Claims
The Common Manual has been revised to provide consistency in the explanation of filing time frames for default claims by aligning the text in subsection 12.6.A with text in subsections 11.4.A and 11.4.B. Revised policy states that a lender is strongly encouraged to file a default claim on or after the 300th day of delinquency and may not file a default claim before the 271st day of delinquency for loans with monthly installments. For loans with installments due less frequently than monthly (e.g., quarterly), a lender is strongly encouraged to file a default claim on or after the 360th day of delinquency and may not file a default claim before the 331st day of delinquency.
|Affected Sections:||12.6.A Default Claims|
|Effective Date:||Effective for loans for which the first day of delinquency on the oldest outstanding due date is on or after July 1, 2000.|
|Policy Information:||767/Batch 112|
Glossary Definitions for Application and Promissory Note Processes
Several glossary definitions have been added, updated, or deleted to reflect the current application and promissory note processes used in the FFELP. The definition of “common application” is being deleted from the glossary and the following definitions of “common form” and “Federal Consolidation Loan Application and Promissory Note” are being added:
In addition, the definition of “Master Promissory Note” has been updated and definitions of “Federal PLUS Loan Application and Master Promissory Note (PLUS MPN),” “PLUS MPN,” “Federal Stafford Loan Master Promissory Note (Stafford MPN),” and “Stafford MPN” have been added, as follows:
|Affected Sections:||appendix G|
|Policy Information:||768/Batch 112|