LOUISIANA STUDENT
FINANCIAL ASSISTANCE COMMISSION
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LPM NO.: | L2003-9 | Effective Date: | As Indicated |
Pub. Date: | November 3 , 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 nation’s guarantors provide the following summaries to inform schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manual’s next annual update in July 2004. These changes will also be incorporated into the October 2003 Integrated Common Manual. The Integrated Common Manual is available on several guarantor websites, and it is also available on NCHELP’s website at www.NCHELP.org in the e-library. Please carefully note the effective date of each policy change.
Resolution
of an Overpayment
The Common
Manual states that a borrower who has an overpayment of $25 or more must
resolve that overpayment to be considered eligible for additional Title IV funds.
Previous policy in subsection 5.2.D indicated that the borrower could, among
other options, make satisfactory arrangements with the school to repay an overpayment.
This policy has been updated to acknowledge that the borrower has the additional
option of making satisfactory repayment arrangements with the Department to
resolve the overpayment.
Affected Sections: | 5.2.D Prior Overpayment |
Effective Date: | Return of Title IV funds regulations are effective for any student who withdrew on or after October 7, 2000, unless implemented earlier by the school on or after November 1, 1999. |
Basis: | §668.22(h). |
Policy Information: | 705/Batch 107 |
Guarantor Comments: | None. |
Total
and Permanent Disability Discharge Application References
The Common Manual has been revised to delete references to a total
and permanent disability discharge application that is no longer acceptable.
The revised policy confirms that the lender must send borrowers
requesting discharge due to a total and permanent disability the Loan Discharge
Application: Total and Permanent Disability or other form(s) approved by the
Department, as specified in Dear Colleague Letter
GEN-02-12.
Affected Sections: | 12.1.D
Claim File Documentation 12.8.E Total and Permanent Disability |
Effective Date: | Total and permanent disability discharge applications provided to borrowers by the lender on or after March 31, 2003. |
Basis: | DCL GEN-02-12. |
Policy Information: | 706/Batch 107 |
Guarantor Comments: | None. |
Borrower
Payments after Total and Permanent Disability (TPD) Claim
The Common Manual policy regarding a payment received after the
date a TPD claim is paid has been revised. The new policy eliminates the requirement
that, at the time the lender forwards the borrower
payment to the guarantor, the lender notify the borrower or other party who
sent the payment that there is no obligation to make further payments, unless
directed otherwise.
Revising prior guidance from Dear Colleague Letter GEN-02-03, the Responses to Total and Permanent Disability Outstanding Issues letter received on March 3, 2003, from Jeff Baker, Program Development, U.S. Department of Education, clarifies in Q&A #2 that the lender is required only to forward to the guarantor a payment received from or on behalf of the borrower after it has filed a total and permanent disability claim and received the claim payment. The Department acknowledges in this letter that requiring both the lender and guarantor to provide a notice to the party who submitted the payment is duplicative.
Affected Sections: | 12.8.E Total and Permanent Disability |
Effective Date: | Borrower payments received on or after April 1, 2003, after a total and permanent disability claim payment has been received by the lender. |
Basis: | Responses to Total and Permanent Disability Outstanding Issues letter from Jeff Baker, Program Development, U.S. Department of Education, received March 3, 2003, Q&A #2. |
Policy Information: | 707/Batch 107 |
Guarantor Comments: | None. |
Waiver
of Uninterrupted Service Requirement for Teacher Loan Forgiveness
The Common Manual has been revised to state that lender should
not consider the time that a borrower is on active duty as a result of a military
mobilization as an interruption in the 5 consecutive, complete
academic years that a borrower must serve as a full-time teacher at a qualifying
school to be eligible for teacher loan forgiveness. This applies to a borrower
who is a member of a reserve component of the Armed Forces and is called or
ordered to active duty for more than 30 days, and to a borrower who is a regular
active duty member of the Armed Forces and is reassigned to a different duty
station for more than 30 days.
Affected Sections: | 12.9.B Teacher Loan Forgiveness Program |
Effective Date: | Teacher Loan Forgiveness Program applications submitted by the lender to the guarantor on or after May 14, 2003. |
Basis: | Federal Register, Vol. 68, No. 93, dated May 14, 2003, pages 25821-25822. |
Policy Information: | 708/Batch 107 |
Guarantor Comments: | None. |
Due
Diligence in Default Claim Filing
The Common Manual has been revised to align text in subsections
11.4.A and 11.4.B with text in subsection 12.6.A. This change adds explicit
language in chapter 11 to state that for loans with monthly
repayment obligations, a lender must file default claims by the 360th day of
delinquency. For loans with repayment obligations less frequent than monthly,
a lender must file default claims by the 420th day of
delinquency.
Affected Sections: | 11.4.A
Due Diligence Requirements for Loans with Monthly Repayment Obligations
11.4.B Due Diligence Requirements for Loans with Repayment Obligations Less Frequent Than Monthly |
Effective Date: | Loans for which the first day of delinquency on the oldest outstanding due date is on or after July 1, 2000. |
Basis: | §682.411(e)(f)(h) and (I), as updated in the Federal Register dated October 29, 1999. |
Policy Information: | 710/Batch 107 |
Guarantor Comments: | None. |
Due
Diligence and Ineligible Borrower Claims
The Common Manual has been revised to clarify that for ineligible
borrower claims, due diligence is monitored from the date the lender receives
notification that a borrower is ineligible. A cross-reference to subsection
11.4.F has been added for information on required due diligence activities as
well as a cross-reference to subsection 13.4.A for information on timely filing
violations.
Affected Sections: | 13.3.B Non-Default Claims |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | §682.305; §682.406(a)(5); §682.412. |
Policy Information: | 711/Batch 107 |
Guarantor Comments: | None. |
Due
Diligence Requirements for Loans with Repayment Obligations Less Frequently
Than Monthly
The Common Manual has been revised by deleting the note in subsection
11.4.B regarding the chapter’s overarching reference to due diligence
time frames for loans with monthly repayment obligations, except where noted.
Similar language has been moved to the introductory text in chapter 11. The
relocated language also provides a cross-reference to section 1.6 for guarantor
contact information.
Affected Sections: | 11.4.B Due Diligence Requirements for Loans with Repayment Obligations Less Frequent Than Monthly |
Effective Date: | Retroactive to the implementation of the Common Manual. |
Basis: | None. |
Policy Information: | 712/Batch 107 |
Guarantor Comments: | None. |