Loan Discharge Due to Death or Total and Permanent Disability

LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
OFFICE OF STUDENT FINANCIAL ASSISTANCE

LOAN PROGRAM BULLETIN

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

 

 

 

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