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Loan Discharge Due to Death or Total and Permanent Disability |
LOUISIANA
STUDENT FINANCIAL ASSISTANCE COMMISSION
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TO: |
Lenders and Schools |
DATE: |
March 29, 2000 |
TOPIC: |
Loan Discharge Due to Death or Total and Permanent Disability |
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.
Dear Colleague Letter
GEN-99-36, issued by the U.S. Department of Education in November 1999
implemented more stringent controls of the process for granting discharge of
loans due to death and disability. The Department indicated that a death
cancellation may only be granted based on an original or certified copy of the
death certificate. Current regulations in Section 682.402(b)(3) require the loan
holder to suspend collection activities on a loan for 60 days after receiving a
request for a death discharge while attempting to obtain documentation needed to
grant the discharge. To be sensitive to the needs of the bereaved family, the
Department has authorized guaranty agencies to extend the suspension of
collection activities an additional 60 days if extra time is needed to obtain
the necessary documents.
LOSFA will allow lenders the additional 60 day extension. The reason for needing this extension should be documented in the lenders servicing history