LOUISIANA STUDENT
FINANCIAL ASSISTANCE COMMISSION
|
|||
LPM NO.: | L2006-2 | Effective Date: | As Indicated |
Pub. Date: | March 28, 2006 | Distribution: | Lenders; College, University and LAICU Financial Aid and Business Offices and Registrars; Tech School Personnel and Campus Deans; and Proprietary 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 2006. These changes will also be incorporated into the February 2006Integrated Common Manual. The Integrated Common Manual is available on several guarantor Web sites, and it is also available on NCHELP’s Web site at www.NCHELP.org in the e-library. Please carefully note the effective date of each policy change.
Taxpayer
Relief Act Reporting Requirements
The Common Manual has been updated to align figure 13-1 with the revised
Claim Form that is being distributed by the Default Aversion and Claims Standardization
(DACS) Subcommittee of NCHELP’s Program Operations Committee. A new field
has been added to the Claim Form to capture the amount of unpaid origination
fee and unpaid capitalized interest that are included in the principal balance
on the date the claim is filed. These amounts will be reported separately in
field 20b of the Claim Form. This information is required for loans first disbursed
on or after September 1, 2004, to fulfill reporting requirements in Internal
Revenue Service regulations.
Affected Sections: | Figure 13-1 |
Effective Date: | Claims filed by the lender on or after January 1, 2006, for loans first disbursed on or after September 1, 2004. |
Basis: | Final rules published under Section 221 of Internal Revenue Code and amendments to the final regulations under section 6050S of the Code relating to the information requirements for interest payments received on qualified education loans, published in the May 7, 2004, Federal Register, Volume 69, No. 89, pages 25489-25499. |
Policy Information: | 850/Batch 127 |
Guarantor Comments: | None. |
Required Information on Common Claim Form
Figure 13-1 is revised to add a new required field for disability claims
to capture the total amount of payments made on behalf of the borrower after
the date the borrower became unable to work or earn money. New fields have been
added for the PLUS student's last-known complete address and the PLUS student's
home telephone number. Several new fields have been added for the validity of
information being requested. Also, some of the "If Available" fields
have been changed to "Required" fields. Further, technical edits have
been made to correct the terms "reinsured" and "unreinsured"
to "insured" and "uninsured" respectively. Finally, several
item descriptions were changed slightly for clarity and consistency.
Affected Sections: | Figure 13-1 |
Effective Date: | Claims first filed by the lender on or after January 1, 2006. |
Basis: | None |
Policy Information: | 851/Batch 127 |
Guarantor Comments: | None. |
Processing Closed School and False Certification Loan Discharge Applications
Subsections 13.8.B and 13.8.D of the Common Manual have been revised
to align more closely similar processing requirements for closed school and
false certification loan discharge applications. Language has been added to
the closed school subsection that states that the lender may capitalize unpaid
interest that accrues during the forbearance period and that a borrower’s
request for discharge may not be denied solely due to the borrower’s failure
to return the completed loan discharge application within 60 days. In addition,
language has been added to clarify that if the lender receives a completed loan
discharge application from the borrower at a later date, the lender must process
the loan discharge application and, if the borrower appears to qualify for the
loan discharge, file a claim with the guarantor.
Language has been added
to the false certification subsection to clarify that the lender is deemed to
have exercised forbearance on the loan(s) beginning on the date on which the
lender suspended collection activity, if a borrower fails to submit a completed
loan discharge application within 60 days of being notified of that option.
Affected Sections: | 13.8.B
Closed School |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | ยง682.402(d) and (e) |
Policy Information: | 853/Batch 127 |
Guarantor Comments: | None. |
Processing Closed School Loan Discharge Applications
The Common Manual has been revised to reinsert language in subsection 13.8.B
that was inadvertently omitted during the restructuring of this subsection.
The reinserted language states that on the same date that the guarantor pays
a claim due to a closed school loan discharge, it will refund to the borrower
all borrower payments made on the loan, minus any funds received from a third-party
source. For an eligible loan that was previously paid in full by or on behalf
of the borrower, the guarantor will notify the lender that the loan obligation
is discharged and will refund to the borrower payments made on the loan, minus
any funds received from a third-party source.
If borrower payment records
are unavailable or incomplete at the time the lender files the claim, the guarantor
will refund to the borrower the difference between the original loan principal
and the principal balance outstanding with the lender. Any additional amounts
not included in the claim payment may be paid later through a supplemental claim
based on proof of borrower payments or supplemental documentation provided by
the lender.
Affected Sections: | 13.8.B
Closed School |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | None. |
Policy Information: | 854/Batch 127 |
Guarantor Comments: | None. |