Audit Requirement Delay Contiues for Low Volume Lenders

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 U.S. Department of Education has released Dear Colleague (DCL) 98-L-204 dated March, 1998, which states that the Departments of Labor, Health and Human Services and Education, and Related Agencies Appropriations Act of 1998 (P.L. 105-78) extends the deadline for submission of the audit by lenders with loan portfolios equal to or less than $5 million from October 1, 1997 to October 1, 1998. This provision of the act does not eliminate the requirement that lenders with this volume of FFEL program loans complete an annual compliance for all the fiscal years subject to the audit requirement. Rather it simply delays the date by which the audits must be submitted.

The DCL advises that in light of possible further legislative action by Congress, the Department has decided to again postpone the deadline for completion and, if necessary, submission of the audit until June 30, 1999, for any audit period in which the lender originated and/or held FFEL Program loans totaling $5 million or less.