Oklahoma Guaranteed Student Loan Program
Common Manual Update - 111
Unified Student
Loan Policy
(Click
here to download PDF version.)
The Common Manual Governing Board recently approved changes that modify policies in the Common Manual.
The items outlined in this publication provide you with interim updates regarding the policy changes that will be incorporated in the Common Manual when the next annual update is published.
If you have questions regarding information contained in this bulletin, please contact OGSLP’s Policy, Compliance and Training department at (405) 234-4432 or 1-800-247-0420.
Chapter 5: Borrower
Eligibility &
Chapter 9: School Reporting
Responsibilities and the Return of Title IV Funds
Return of Title IV Funds
The Common Manual has been revised to incorporate regulatory clarifications
to the return of Title IV funds requirements provided in an electronic announcement
posted by the Department on June 30, 2006, and the Federal Registers published
August 9, 2006, and November 1, 2006.
Revised policy clarifies that, if there are unearned grant funds that
must be repaid as a result of the return of Title IV funds calculation, the
student is not required to return a grant overpayment for which the original
amount was $50 or less on a program-by-program basis. Furthermore, a student who owes a grant
overpayment for which the original balance was $50 or less as a result of a
return of Title IV funds calculation remains eligible to receive Title IV
program assistance.
Revised policy also states that a school's return of FFELP
funds is considered timely if performed within 45 days of the date the school
determined that the student withdrew. If
the funds are returned by check, the check must be endorsed by the lender's
bank within 60 days of the date the school determined that the student
withdrew.
In addition, revised policy includes the ACG, SMART Grant,
and Grad PLUS programs in the order in which unearned funds must be returned to
the Title IV programs.
AFFECTED SECTIONS: 5.2.D Prior
Overpayment
9.5.A Return Amounts for Title IV Grant and Loan
Programs
9.5.B Processing Returned Funds
EFFECTIVE DATE: Withdrawals
that occur on or after July 1, 2006.
BASIS: Higher
Education Act of 1965, Sections 484B(b)(3)(B), 484B(b)(1), and 484B(b)(2)(C),
as amended by the Higher Education Reconciliation Act (HERA) of 2005;
electronic announcement Return to Title IV Funds Worksheets posted by the
Department on June 30, 2006; Federal Register dated August 9, 2006, pages
45671-45672 and 45694-45696, §668.22(i)(2), §668.35(e), §668.173(b); Federal
Register dated November 1, 2006, pages 64380-64381 and 64397,
§668.22(h)(3)(ii)(B); Dear Colleague Letter GEN-06-09.
Chapter 6: School Certification
PLUS Loans for Graduate and Professional Students
The Common Manual
has been updated to provide additional clarification that in the case of a
school that participates in both the FFELP and the Direct Loan Program, the
school must determine the student’s maximum Stafford Loan eligibility under the
program in which the school is participating for Stafford loan purposes before
the student may apply for a Grad PLUS loan.
AFFECTED SECTIONS: 6.15.C PLUS
Loan Certification
EFFECTIVE DATE: Loans
certified by the school on or after December 1, 2006.
BASIS: Preamble
to the Federal Register dated November 1, 2006, page 64383; §682.201(b)(3).
Chapter 8: Loan
Delivery
Late Delivery Requirements Clarified
The Common Manual
has been revised to clarify that a school must offer a late delivery of
Stafford or PLUS loan funds the student or parent borrower was eligible to
receive while the student was still enrolled during a payment period or period
of enrollment that the student successfully completed. If a student ceases to be enrolled half time
but does not withdraw, the school may, but is not required to, offer a late
delivery of
Revised policy also deletes the HERA-related requirement
for a school to contact the borrower, obtain confirmation that the borrower
still requires the loan funds, and explain the borrower’s repayment obligation
before making a late delivery of loan funds.
In the preamble to the Federal Register dated November 1, 2006, the
Department clarified that this requirement applies only to post-withdrawal
disbursements for withdrawn students, and not to late deliveries for students
who dropped to less-than-half-time enrollment but did not withdraw, or students
who successfully completed a payment period or period of enrollment, as
applicable.
AFFECTED SECTIONS: 8.7.E
Late Delivery
EFFECTIVE DATE: Late delivery of FFELP loan proceeds by the school on
or after July 1, 2003, unless implemented earlier by the school. Schools may have implemented these provisions
no earlier than November 1, 2002.
BASIS: §668.164(g)(3)(ii)
and (iii); preamble to the Federal Register dated November 1, 2006, page 64380.
Chapter 8: Loan
Delivery &
Chapter 9: School Reporting
Responsibilities and the Return of Title IV Funds
Return of Title IV Funds
The Common Manual
has been revised to incorporate regulatory changes and clarifications to the
post-withdrawal disbursement requirements provided in the Federal Register published
August 9, 2006 and November 1, 2006.
Revised policy specifies that, in order to credit loan funds to
outstanding school charges or to deliver a credit balance of funds directly to
the student, or borrower in the case of a parent PLUS loan, the school must
provide a written notice within 30 days of determining that the student has
withdrawn. In this notice, the school
must request confirmation of the borrower's consent for the credit of a
post-withdrawal disbursement of loan funds to the student's account, or for the
direct delivery of loan funds to the student or parent, in the case of a parent
PLUS loan. For a post-withdrawal
disbursement of loan funds, the school must explain that a borrower who does
not confirm that a post-withdrawal disbursement of loan funds may be credited
to outstanding school charges may not receive the direct delivery of any of
those loan funds unless the school concurs.
The school must explain that the student, or parent in the case of a
parent PLUS loan, may accept or decline some or all of the funds, and must
explain the obligation of the borrower to repay any loan funds he or she
chooses to have delivered.
The notice must inform the loan recipient of the deadline
to respond and that the school will not deliver the funds if the school does
not receive a timely response to the notice, unless the school opts to deliver
a post-withdrawal disbursement based on a late response. The deadline may be set by school policy, but
may not be less than 14 days after the date the school sent the
notification. The deadline must be the
same for funds to be applied to outstanding school charges and for funds to be
directly delivered to the borrower.
If the school receives no response to the post-withdrawal
disbursement notice, the school may not deliver any of those funds. If the school receives a timely response to
the post-withdrawal disbursement notice, the school must deliver the funds in
the manner specified by the student, or parent in the case of a parent PLUS
loan. If the school receives a late
response to the notice, the school may deliver the disbursement, provided that
the school delivers all of the funds accepted, or the school may decline to
deliver any funds. A post-withdrawal
disbursement may not be delivered later than 120 days after the date of the
school's determination that the student withdrew, unless an exception is
granted by the Department. If the school
decides not to deliver a post-withdrawal disbursement due to the untimely
response of the borrower, the school must provide written notification to the
borrower of the denial of the post-withdrawal disbursement.
The school must document in the student's file the result
of any notification made of the student's right to cancel or accept all or a
portion of the funds, and the final determination made concerning the
post-withdrawal disbursement.
Revised policy clarifies that the school is not required to
provide additional notice to the student or parent borrower of the credit of a
post-withdrawal loan disbursement to outstanding school charges.
AFFECTED SECTIONS: 8.2.B School Notice of
Credit to Student Account
9.5.A Return Amounts For Title IV Grant
and Loan Programs
EFFECTIVE DATE: For post-withdrawal disbursement confirmations, withdrawals that occur on or after September 8, 2006.
For aid types to be included in
the return of Title IV funds calculation, withdrawals that occur on or after
July 1, 2006.
BASIS: Higher Education Act of 1965, Sections 484B(a)(3)(C)(i) and 484B(a)(4), as amended by the Higher Education Reconciliation Act (HERA) of 2005; Federal Register dated August 9, 2006, pages 45669-45670, 45694-45695; Federal Register dated November 1, 2006, pages 64379-64380, 64397; §668.164(g)(4)(i); Dear Colleague Letter GEN-06-05; electronic announcement Return to Title IV Funds Worksheets posted by the Department on June 30, 2006.
Chapter 11: Deferment and Forbearance
Forbearance
The Common Manual
has been revised to include the requirement that when a lender and borrower
verbally agree to the terms of a forbearance, the lender must send a notice
confirming the terms of the forbearance agreement to the borrower within 30
days of the date that agreement was made with the borrower.
AFFECTED SECTIONS: 11.19.B Documentation Required for
Authorized Forbearance
EFFECTIVE DATE: Borrower requests processed by the lender on or after
July 1, 2003, unless implemented earlier by the lender. Lenders may have
implemented this provision no earlier than November 1, 2002.
BASIS: §682.211(b)(1).
Deferment Eligibility Chart
The Deferment Eligibility Chart, Figure 11-1, has been
revised to include the military deferment for Stafford and PLUS loans first
disbursed on or after July 1, 2001, and for Consolidation loans in which all
underlying Title IV loan balances were first disbursed on or after July 1,
2001. In addition, the chart has been
revised to indicate that all deferments are borrower-based, except for the
military deferment which is loan-based.
AFFECTED SECTIONS: Figure 11-1 Deferment Eligibility Chart
EFFECTIVE DATE: Military deferments granted on or after July 1, 2006,
for loans for which the first disbursement is made on or after July 1, 2001.
BASIS:
Interim
Final Rules published in the Federal Register dated August 9, 2006, pages 45701
- 45702.
Chapter 11: Deferment and Forbearance,
Chapter 12: Due Diligence in Collecting
Loans,
Chapter 13: Claim Filing, Discharge, and
Forgiveness &
Appendix G: Glossary
Comaker Definition Revised
The Common Manual
has been revised to clarify that, in the context of a Federal Consolidation
loan, the term comaker refers to one of two spouses who jointly borrowed a
Federal Consolidation made from an application received by the consolidating
lender prior to July 1, 2006. These
borrowers are jointly and severally liable for the loan’s repayment regardless
of future marital status.
AFFECTED SECTIONS: 11.1.A General
Deferment Eligibility Criteria
Chapter 12 Introduction
13.8 Discharge
appendix G
EFFECTIVE DATE: Consolidation
loan applications received by the lender on or after July 1, 2006.
BASIS: Higher
Education Act of 1965, Section 428C(a)(3)(C), as amended by the Higher
Education Reconciliation Act (HERA) of 2005; Dear Colleague Letter GEN-06-02.
Chapter 13: Claim Filing, Discharge, and Forgiveness
Combining Teaching Service for Teacher Loan
Forgiveness
The Common Manual
has been revised to include language to state explicitly that an otherwise
eligible borrower may qualify for teacher loan forgiveness by completing the
5-year teaching service requirement by combining years of full-time service at
qualifying elementary and secondary schools.
AFFECTED SECTIONS: 13.9.B
Teacher Loan Forgiveness Program
EFFECTIVE DATE: Teacher loan forgiveness applications received by the
lender on or after October 30, 2004.
BASIS: Preamble
to the Federal Register dated November 1, 2006, page 64386.
Chapter 15: Federal
Consolidation Loans
Loans Eligible for Consolidation
The Common Manual
has been updated to clarify that a borrower who has either a Federal or a
Direct Consolidation loan may obtain a subsequent Federal or Direct
Consolidation loan if the borrower is consolidating an existing Consolidation
loan with at least one other eligible loan.
An eligible loan includes another eligible Consolidation loan,
regardless of whether that eligible loan was made before or after the date the
most recent Consolidation loan was made.
AFFECTED SECTIONS: 15.2 Borrower Eligibility and Underlying
Loan Holder Requirements
EFFECTIVE DATE: Consolidation
applications received on or after December 1, 2006,
unless implemented earlier by the
guarantor.
BASIS: Dear Colleague Letter GEN-06-20/FP-06-16.
Chapter 16:
Cohort Default Rates and Appeals &
Appendix G: Glossary
Clarification to Cohort Default Rate Calculation
The Common Manual
has been revised to clarify that the cohort for a fiscal year for the purpose
of calculating a cohort default rate consists of all former students who,
during that fiscal year, entered repayment on any Federal Stafford loan,
Federal SLS loan, or Direct Stafford loan that they received, or on the portion
of a Federal Consolidation loan or the Federal Direct Consolidation loan that
repays those loans.
AFFECTED SECTIONS: 16.2 Calculation of Cohort Default Rates
appendix G
EFFECTIVE DATE: Retroactive
to the implementation of the Common
Manual.
BASIS: §668.183(b).