Lender and Servicer Due Diligence Measures Required by LOSFA Regarding the Office of the Ombudsman

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.

LOSFA wishes to insure that lenders and schools have complete guidance concerning the relief provided by the U.S. Department of Education in connection with the recent terrorist attack. The Department has provided GEN-01-11 to address relief for Borrowers in the Title IV Loan Programs and GEN 01-12 to address school reporting deadlines. In addition, members of the National Council of Higher Education Loan Programs has compiled a list of the zip codes and area codes for the affected areas. The zip code list is in two forms, a list of active zip codes that were verified through the U.S. Postal Service website and a range of zip codes for these areas, which will include inactive or invalid zip codes.

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GEN-01-11
September 2001

Subject: Recent Terrorist Attacks - Relief for Borrowers in the Title IV Loan Programs

Summary: This letter is the first of a series that will provide guidance regarding the administration of the federal student aid programs authorized under Title IV of the Higher Education Act as a result of the terrorist attacks on the United States. The first three letters (this letter and ones that will address institutional reporting deadlines and the treatment of students and borrowers who are affected by their call to active military duty) should be available by the end of this week. We will also publish a letter that will comprehensively address other issues that relate to regulatory and administrative relief for those affected by the terrorist attacks.

This letter specifically addresses the immediate needs of borrowers who are in repayment on a loan under the Federal Family Education Loan (FFEL), the William D. Ford Federal Direct Loan (Direct Loan), and Federal Perkins Loan programs.

Dear Colleague:

On September 11, 2001, President Bush designated all five boroughs of New York City (The Bronx, Brooklyn, Manhattan, Queens and Staten Island) as eligible for national disaster assistance. There may be borrowers affected by the attacks who will need assistance with their loan obligation.

The following provides guidance to Title IV loan holders on the granting of forbearances and discharges to affected borrowers. It also provides guidance on the treatment of defaulted borrowers who have been affected by the disaster.

Forbearance in the FFEL and Direct Loan Programs

Forbearance for borrowers who reside or work in the designated disaster area

Until it can be determined whether a borrower qualifies for a deferment or discharge because of disruptions caused by the terrorist attacks, the Secretary is authorizing FFEL lenders to grant mandatory administrative forbearance to certain borrowers (or endorsers, if applicable) who either reside in or, to the extent the lender has knowledge, work in the designated disaster area (New York City). Mandatory administrative forbearance does not require either a request or documentation from the borrower. This period of mandatory administrative forbearance is effective from September 11, 2001 through January 31, 2002. The Secretary is granting administrative forbearance to similarly situated Direct Loan borrowers for the same period. See 34 CFR 682.211(i)(2)(i) and 34 CFR 685.205(b)(8).

Borrowers must be notified that an administrative forbearance has been granted to allow them to pursue other potential program benefits that may be available to them or to ask for resumption of normal billing and payment schedules. Forbearance beyond January 31, 2002 may be granted only based on supporting documentation and with a written forbearance agreement with the borrower.

Forbearance for other borrowers

Based upon the request of the affected borrower, the borrower's family or another reliable source, borrowers who have been impacted by the terrorist attacks (other than those who reside or work in New York City) should be granted forbearance for a period that ends no later than January 31, 2002 without supporting documentation and without a written forbearance agreement. The reasons for granting the forbearance should be documented in the borrower's loan records. Forbearance beyond the initial period will require supporting documentation and a written agreement with the borrower.

During the initial forbearance process, lenders are encouraged to examine the borrower's eligibility for available deferment or discharge benefits.

Defaulted Borrowers in the FFEL and Direct Loan Programs

The Secretary will, without a request from the borrower, curtail collection activities from September 11, 2001 through January 31, 2002 for defaulted borrowers who reside or work in the designated disaster area (New York City) and authorizes guaranty agencies in the FFEL Program to do the same for their defaulted borrowers. For other defaulted borrowers who have been impacted by the disaster the Secretary will and guaranty agencies may, upon request of the borrower, curtail collection activities for a period that ends no later than January 31, 2002.

Forbearance in the Federal Perkins Loan Program

Perkins Loan borrowers who reside or work in the designated disaster area (New York City) should be granted a forbearance without a borrower request or written forbearance agreement from September 11, 2001 through January 31, 2002. Borrowers must be notified that a forbearance has been granted to allow them to pursue other potential program benefits that may be available to them. Forbearance beyond this period may be granted only based on a written request of the borrower, supporting documentation and with a written forbearance agreement with the borrower.

Collection efforts on the accounts of defaulted borrowers in the designated areas may be discontinued from September 11, 2001 through January 31, 2002. For other affected borrowers, forbearance should be granted for a period that ends no later than January 31, 2002 based on the request of the borrower, the borrower's family or another reliable source (which need not be in writing) and without supporting documentation and without a written forbearance agreement. Forbearance beyond the initial period will require supporting documentation and a written forbearance agreement with the borrower.

For defaulted borrowers, upon request of the borrower, the school may discontinue collection efforts for a period that ends no later than January 31, 2002.

Discharges

The Secretary encourages FFEL lenders (without approval from the Secretary or from the guaranty agency), guaranty agencies, and Perkins schools to use "reliable information" of a borrower's (or the dependent student in the case of a PLUS loan) death due to the terrorist attacks, as the information becomes available, to immediately suspend collection activities without contacting the borrower's family for whatever period is necessary in order to process a death discharge. The Secretary reminds guaranty agencies and schools that they may grant a death discharge on the basis of exceptional circumstances using reliable documentation other than an original or certified copy of a death certificate.

"Other reliable documentation" may include, but is not limited to, obituary notices and published listings of the dead provided by a Federal, State, or local government entity, or by one of the affected airlines. The Secretary will implement these same guidelines for the Direct Loan Program and for other loans held by the Department.

Guaranty agencies and schools are encouraged, at a later date, to obtain a certified copy of the death certificate if one is available through alternative sources without contacting the borrower's family.

Due Diligence Timelines

Due to disruptions in mail and other communications throughout the country, the Secretary will, for the period of September 11, 2001 through October 31, 2001 or later if the Secretary determines that these disruptions still exist, not enforce time sensitive deadlines that lenders and guaranty agencies in the FFEL Program and institutions in the Perkins Loan Program normally are required to comply with in their loan due diligence activities.

I want to thank you in advance for serving those borrowers who have been impacted by these terrible tragedies.

Sincerely,
William D. Hansen Deputy Secretary

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GEN-01-12
September 2001

Subject: Recent Terrorist Attacks – Institutional Reporting Deadlines

Summary: This letter is the second of a series providing guidance regarding the administration of the federal student aid programs authorized under Title IV of the Higher Education Act as a result of the terrorist attacks on the United States. The first letter (GEN-01-11), published yesterday, addressed the immediate needs of borrowers who are in repayment on federal student loans. This letter concerns upcoming institutional deadlines that may impact certain schools. Later this week we will publish a third letter that deals with the treatment of students and borrowers who are affected by the recent military mobilization. We will publish a fourth letter that will comprehensively address other issues that relate to regulatory and administrative relief for those affected by the terrorist attacks.

Dear Colleague:

On September 11, 2001, President Bush designated all five boroughs of New York City (The Bronx, Brooklyn, Manhattan, Queens and Staten Island) as eligible for national disaster assistance. We expect that there are institutions that, because of the attacks, may be unable to comply with one or more Title IV reporting requirements.

This letter addresses three issues of immediate concern involving institutional reporting as discussed below. A subsequent Dear Colleague Letter will address other reporting requirements.

Filing Deadline for FISAP – Upon a school's request, we will grant an extension to the submission deadline for the upcoming FISAP if a school is unable to meet the published deadline of October 1, 2001 because of the disaster. Affected schools should make such a request, as soon as they are able, by contacting Richard Coppage in Campus-Based Operations by e-mail at Richard.Coppage@ed.gov or by phone at (202) 708-4694. After October 11, 2001, Richard's phone number will be (202) 377-3174.

Final 2000-2001 Federal Pell Grant Reporting Deadline – Upon a school's request, we will grant an extension to the reporting deadline of final 2000-2001 Federal Pell Grant payments if the school is unable to meet the published deadline of October 1, 2001 because of the disaster. Affected schools should make such a request, as soon as they are able, by contacting Barbara Maddox in Pell Grant Operations by e-mail at Barbara.Maddox@ed.gov or by phone at (202) 708-8825. After October 11, 2001, Barbara's phone number will be (202) 377-3116.

Deadline for Reporting Federal Pell Grant Disbursement Records – For schools impacted by these disasters, we will not enforce the deadline that a school submit a Pell Grant disbursement record within 30 days after the school makes a payment to the student or changes a previously-reported payment, but instead will require submission within 90 days. If a school finds it impossible to meet this 90-day requirement, we will consider a request for a further extension on a case-by-case basis. Requests for such an extension should be made by contacting Barbara Maddox in Pell Grant Operations by e-mail at Barbara.Maddox@ed.gov or by phone at (202) 708-8825. After October 11, 2001, Barbara's phone number will be (202) 377-3116.

Submission of Federal Direct Loan Records – For schools impacted by these disasters, we will not enforce the deadline that a school submit Direct Loan promissory notes, loan origination records, and initial and subsequent disbursement records no later than 30 days following the date of disbursement, but instead we will require schools to submit these records within 90 days of the date of disbursement. If a school finds it impossible to meet this 90-day requirement, we will consider a request for a further extension on a case-by-case basis. Requests for such an extension should be made by contacting Sarah Utz in Direct Loan Operations by e-mail at Sarah.Utz@ed.gov or by phone at (202) 260-5032. After October 11, 2001, Sarah's phone number will be (202) 377-3140.

As indicated above, we expect to provide more comprehensive guidance within the next few days. In the meantime, if you have any questions or suggestions, please contact the SFA Customer Service Call Center through any of the following means:

Via phone, Call Center staff members are available Monday through Friday between the hours of 9:00 AM and 5:00 PM (Eastern Time) at 1-800-433-7327. After hours calls will be accepted by an automated voice response system. Callers leaving their name and phone number will receive a return call the next business day.

Via FAX, inquiries should be sent to the Call Center at (202) 260-4199.

Via e-mail, inquiries should be directed to the Call Center staff at SFA.Customer.Support@ed.gov.

Via the Schools Portal on the Internet, by going to www.SFA4Schools.sfa.ed.gov then clicking on the "Got a Question?" button.

I want to thank you in advance for serving those who have been impacted by these terrible tragedies.

Sincerely,
William D. Hansen Deputy Secretary

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New York Area and Zip Codes

New York Borough Area Codes
212 347 646 718 917

Active Zip Codes

New York City
10015 10043 10045 10046 10047 10060 10069 10072 10079 10080 10081 10082 10087 10090 10094 10095 10096 10098 10099 10102 10109 10114 10115 10117 10124 10125 10126 10129 10130 10131 10132 10133 10138 10149 10156 10157 10160 10161 10163 10164 10179 10184 10185 10196 10197 10199 10203 10211 10212 10213 10242 10257 10258 10259 10260 10261 10265 10269 10272 10273 10274 10275 10277 10285 10292

Manhattan
10001 10002 10003 10004 10005 10006 10007 10008 10009 10010 10011 10012 10013 10014 10016 10017 10018 10019 10020 10021 10022 10023 10024 10025 10026 10027 10028 10029 10030 10031 10032 10033 10034 10035 10036 10037 10038 10039 10040 10041 10044 10048 10055 10101 10103 10104 10105 10106 10107 10108 10110 10111 10112 10113 10116 10118 10119 10120 10121 10122 10123 10128 10150 10151 10152 10153 10154 10155 10158 10159 10162 10165 10166 10167 10168 10169 10170 10171 10172 10173 10174 10175 10176 10177 10178 10249 10256 10268 10270 10271 10276 10278 10279 10280 10281 10282 10286

Queens
11001 11002 11003 11004 11005 11096 11099 11101 11102 11103 11104 11105 11106 11109 11120 11351 11352 11354 11355 11356 11357 11358 11359 11360 11361 11362 11363 11364 11365 11366 11367 11368 11369 11370 11371 11372 11373 11374 11375 11377 11378 11379 11380 11381 11385 11386 11390 11405 11411 11412 11413 11414 11415 11416 11417 11418 11419 11420 11421 11422 11423 11424 11425 11426 11427 11428 11429 11430 11431 11432 11433 11434 11435 11436 11439 11451 11484 11499 11690 11691 11692 11693 11694 11695 11697

Staten Island
10301 10302 10303 10304 10305 10306 10307 10308 10309 10310 10311 10312 10313 10314

The Bronx
10451 10452 10453 10454 10455 10456 10457 10458 10459 10460 10461 10462 10463 10464 10465 10466 10467 10468 10469 10470 10471 10472 10473 10474 10475 10499

Brooklyn
11201 11202 11203 11204 11205 11206 11207 11208 11209 11210 11211 11212 11213 11214 11215 11216 11217 11218 11219 11220 11221 11222 11223 11224 11225 11226 11228 11229 11230 11231 11232 11233 11234 11235 11236 11237 11238 11239 11240 11241 11242 11243 11244 11245 11247 11248 11249 11251 11252 11254 11255 11256

Zip Code Ranges

New York City and Manhattan
10001– 10292

Staten Island
10301—10314

The Bronx
10401—10499

Brooklyn
11201—11256

Queens
11001—11006
11096—11120
11301—11390
11401—11499
11601—11697