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Cash
Management Regulation Effective Date /
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LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
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| LPM NO.: | L97-8 | Effective Date: | As Indicated |
| Pub. Date: | June 24, 1997 | Distribution: | Lenders and Schools |
| Topic: | Cash Management Regulation Effective Date / Trigger Event Changes |
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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.
Department of Education Provides Clarification of School Cash Management Requirements
On June 2, 1997, the Department of Education provided clarification of the cash management regulations that are effective July 1, 1997. This guidance from the Department modifies how the cash management regulations are to be implemented.
The effective dates for Common Manual policy changes to Chapters 5 and 6 have been modified to conform to this Department guidance. The enclosed "Changes to Effective Date/Trigger Events" shows the Common Manual policies that are affected by the Department’s guidance, along with the previous effective date/trigger event and the new effective date/trigger event for July 1, 1997.
The Department also provided clarification of the regulatory requirements for delivering and returning Federal Family Education Loan Program proceeds to a lender. The Common Manual will be revised to reflect these changes in the near future, and you will be notified of any policy changes that may be required.
Changes to Effective Date/Trigger Events
SOURCE: Department of Education "Policy Bulletin: Cash Management/EASI Regulations"
dated June 2, 1997.
SUBJECT: Effective Dates for the Cash Management/EASI Regulations published on November 29, 1996
(Subpart K of the General Provisions Regulations)
Includes changes to:
34 CFR 668.4, 668.164(a), 668.164(f)(2), 668.164(g),
668.165(a), 668.165(b)(3), 668.165(b)(5)(iii), and 668.167(b), (d) and (e).
LOSFA LPM L97-8 - Changes to Effective Date/Trigger Events June 24, 1997
Changes to Effective
Date/Trigger Events
for Common Manual Policies in Chapters 5 & 6
SOURCE: Department of Education "Policy Bulletin: Cash Management/EASI Regulations" dated June 2, 1997.
Includes changes effective July 1, 1997, to:
34 CFR 668.4, 668.164(a), 668.164(f)(2), 668.164(g), 668.165(a), 668.165(b)(3), 668.165(b)(5)(iii) and 668.167(b), (d) and (e).
| Common Manual Section, Page Number and Policy (July 1997) | Previous Effective Date/Trigger Event | New Effective Date/Trigger Event | |
Chapter 5: Borrower Eligibility and Loan Certification |
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| 1 | 5.8 School
Certification of the Application and Promissory Note (pages 22-23) Schools on the Reimbursement Payment Method Requires school on reimbursement payment method to obtain Department’s approval to certify loan or deliver loan proceeds. |
Loan periods beginning on or after July 1, 1997. | Applies to schools that receive loan proceeds under the reimbursement payment method on or after July 1, 1997. The delivery restrictions apply to any loan proceeds received by a school on or after July 1, 1997. The certification restrictions apply on the date (on or after July 1, 1997) that the Department notifies a school that it must obtain approval from the Department to certify loan applications. 34 CFR 668.167(d) and (e) |
Chapter 6: Guarantee, Disbursement and Delivery |
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| 2 | 6.3.C.
Notices and Authorizations 6.3.C. FFELP Written Notification/Authorization Requirements (Chart) (pages 14-15) Authorizations Requires school to obtain written authorization from student or parent borrower to perform certain activities. |
Authorization provisions are effective for loan periods beginning on or after July 1, 1997. | Authorizations
obtained by a school to carry out the activities described under 668.165(b)(1) beginning
on or after July 1, 1997. 34 CFR 668.165(b)(3) |
| 3 | 6.3.E.
Delivery Requirements (pages 17-18) Requires school to deliver loan proceeds within specific time frames after receipt. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds
received by a school on or after July 1, 1997. 34 CFR 668.167(b) |
| 4 | 6.3.E.
Examples of Time Frames for Returning Loan Proceeds (page 18) Provides examples of latest delivery date and deadline for returning proceeds. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds
received by a school on or after July 1, 1997. 34 CFR 668.167(b) |
| 5 | 6.3.E.
Delivery of Proceeds page 20) Early Delivery Defines earliest date school may directly pay borrower or credit student’s account if student is in clock-hour program or credit-hour program that is not offered in semester, trimester, or quarter academic terms. |
Loan periods beginning on or after July 1, 1997. | Payment
periods beginning on or after July 1, 1997. Note: These provisions
generally apply only to the first disbursement of an FFEL for nonstandard credit- or
clock-hour programs. 34 CFR 668.164(f)(2) |
| 6 | 6.3.E. Delivery of Proceeds (page 20) Early Delivery Defines delivery date when school is applying school funds in advance of receipt of FFELP proceeds. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds that are either credited to the student’s account or paid
directly to a student or parent borrower on or after July 1, 1997. 34 CFR 668.164(a) |
| 7 | 6.3.E. Delivery of Proceeds (page 20) Delayed Delivery Defines delivery date when school is applying school funds in advance of receipt of FFELP proceeds. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds that are either credited to the student’s account or paid
directly to a student or parent borrower on or after July 1, 1997. 34 CFR 668.164(a) |
| 8 | 6.3.E. Delivery of Proceeds (page 20) Delivery of Late Disbursement Requires school to deliver late disbursement no later than 90 days after earlier of end of loan period or date student ceased to enrolled at least half-time. |
Loan periods beginning on or after July 1, 1997. | Students who become ineligible under 668.164(g)(1) (i.e., student is no longer
enrolled as at least half-time student for the loan period) on or after July 1, 1997. 34 CFR 668.164(g) |
| 9 | 6.3.E. Delivery of Proceeds (page 21) Delivery Restrictions Defines delivery date for student who returns from a leave of absence. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds received by a school on or after July 1, 1997. 34 CFR 668.167(b) |
| 10 | 6.3.E. Delivery of Proceeds (page 21) Delivery Restrictions Requires school on reimbursement payment method to receive approval from Department before delivering loan proceeds. |
Loan periods beginning on or after July 1, 1997. | Applies to schools that receive loan proceeds under the reimbursement payment
method on or after July 1, 1997. The delivery restrictions apply to any loan proceeds
received by the school on or after July 1, 1997. 34 CFR 668.167(d) and (e) |
| 11 | 6.3.F. Credit Balances (page 22) Holding Credit Balances Requires school to pay any remaining loan balance to student or parent borrower no later than the end of the loan period. |
Loan periods beginning on or after July 1, 1997. | Effective on July 1, 1997, for any balances of loan proceeds. 34 CFR 668.165(b)(5)(iii) |
| 12 | 6.3.G. Return or Refund of Loan Proceeds (page 22) Return of Proceeds Requires school to return loan proceeds to lender no later than 10 business days after last day on which school may deliver proceeds. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds received by a school on or after July 1, 1997. 34 CFR 668.167(b) |
| 13 | 6.3.H. Late Delivery by a School (page 23) Permits school to deliver loan proceeds after end of loan period or date on which student ceased to enrolled at least half-time. |
Late disbursements identified by the school on or after July 1, 1997. | Students who become ineligible under 668.164(g)(1) (i.e., student is no longer
enrolled as at least half-time student for the loan period) on or after July 1, 1997. 34 CFR 668.164(g) |
| 14 | 6.3.I. Delivery or Return of Loan Proceeds (page 26) Defines latest delivery date and time frame for returning undelivered proceeds to lender. |
Loan periods beginning on or after July 1, 1997. | Loan proceeds received by a school on or after July 1, 1997. 34 CFR 668.167(b) |
Appendix G: Glossary |
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| 15 | Appendix G: Glossary (page 427) Late Disbursement or Delivery Defines late disbursement by lender, late delivery by school. |
Late disbursements identified by the school on or after July 1, 1997. | For late delivery by school: Students who become ineligible under 668.164(g)(1) (i.e., student is no longer enrolled as at least half time student for the loan period) on or after July 1, 1997. 34 CFR 668.164(g) |