LOUISIANA STUDENT
FINANCIAL ASSISTANCE COMMISSION
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LPM NO.: | L2003-1 | Effective Date: | As Indicated |
Pub. Date: | January 10 , 2003 | Distribution: | Lenders and Schools |
Topic: | Common Manual Update |
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 following summary informs schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manual's next annual update in 2002. These changes will also be incorporated into the November 2002 Integrated Common Manual. The Integrated Common Manual is available on the NCHELP website at www.NCHELP.ORG in the e-library. However, all of the following changes are effective before the next paper manual update is scheduled to be delivered.
Standards
for Electronic Signatures
The Common Manual
has been updated to include a reference to Dear Partner Letter GEN-01-06, which
provides voluntary standards for lenders to use for electronic signatures in
electronic student loan transactions. The voluntary standards protect lenders
from loss of guarantee, federal interest benefits, and special allowance payments
if a loan is determined to be legally unenforceable based solely on the processes
used for the electronic signature or related records. If a lender's processes
for electronic signatures and related records do not satisfy these standards
and a loan is held by a court to be unenforceable based solely on these processes,
the Department will determine on a case-by-case basis whether federal benefits
will be denied or paid. A lender is not protected from these losses on loans
made using electronic signatures in electronic student loan transactions to
students attending foreign schools even if the lender complies with these standards.
In addition, the term "electronic signature" has been added to the manual's glossary and defined as information in electronic format that is attached to or logically associated with an electronic record, and used by a person with the intent to sign the electronic record.
Affected Sections: | 3.4, Appendix G |
Effective Date: | FFELP documents signed electronically by the borrower on or after October 1, 2000. |
Basis: | Public Law 106-229, Electronic Signatures in Global and National Commerce Act (E-Sign Act); DCL GEN-01-06. |
Policy Information: | 620/Batch 97 |
Guarantor Comments: | None. |
Loan Disbursement
The Common
Manual has been updated to recognize that some guarantors may have individual
agreements with lenders, as described in subsection 3.3.B of the manual, that
allow the lender to disburse Stafford and PLUS loan funds prior to the receipt
of a notice of loan guarantee from the guarantor. The amended policy also reminds
lenders that if funds are disbursed under an individual agreement with the guarantor
prior to the receipt of the notice of loan guarantee, any amount disbursed that
exceeds the amount for which the borrower is eligible will not be insured by
the guarantor, if the lender knew or had reason to know that the borrower did
not qualify for the excess amount. (See subsection 7.12.C for information regarding
ineligibility due to lender error.)
Affected Sections: | 6.2 |
Effective Date: | Retroactive to the effective date of any individual agreement between a guarantor and a lender. |
Basis: | HEA 428(n); §682.207(b)(1)(i)(A); DCL GEN-99-22. |
Policy Information: | 614/Batch 99 |
Guarantor Comments: | None. |
False
Certification Loan Discharges
The Common
Manual has been revised to clarify that, upon receipt of reliable information
that a borrower may be eligible for a false certification loan discharge, a
lender must suspend all collection activities on each affected loan and may
grant the borrower an administrative forbearance for a period needed by the
guarantor or the Department to determine the borrower's eligibility for a false
certification loan discharge. Text has been clarified by creating separate subheadings
for language regarding suspension of collection and notification to the borrower
during the false certification loan discharge process. Text has also been added
to clarify that the lender is not required to return payments received from
the borrower during the forbearance period. Formatting changes have also occurred
in subsections 8.2.H and CCI8.2.H to align text with subsections
8.2.B, 8.2.C, and 8.2.D and their CCI counterparts.
Affected Sections: | 8.2., CCI8.2.H |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | §682.211(f)(7); §682.402(e)(12)(i) and (ii). |
Policy Information: | 633/Batch 99 |
Guarantor Comments: | None. |
Repayment
Start Date Definition Revised to Include Consolidation
The glossary definition
of "Repayment Start Date" has been revised to include a reference to Consolidation
loans. The revised Common Manual glossary definition reads as follows:
Repayment Start Date: The date the repayment period begins. For Stafford loans, repayment begins on the day following the last day of the grace period. For PLUS and SLS loans, repayment begins on the date the loan is fully disbursed. For Consolidation loans, repayment begins on the date the loan is disbursed. See sections 7.4 and 9.5.
Affected Sections: | Appendix G |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | §682.102(e)(5). |
Policy Information: | 634/Batch 99 |
Guarantor Comments: | None. |
In-School
Deferments
The Common
Manual has been revised to align the text of subsection 7.3.A with current
policy reflected in subsection 7.10.A. Subsection 7.3.A has been corrected to
state that if a lender receives reliable information that indicates that the
borrower may be eligible for an in-school deferment, the lender must determine
the borrower's eligibility and, if the borrower is eligible, grant the in-school
deferment.
Affected Sections: | 7.3.A |
Effective Date: | In-school deferments granted by the lender on or after October 1, 1998. |
Basis: | §682.210(c)(1). |
Policy Information: | 635/Batch 99 |
Guarantor Comments: | None. |