Discontinuation of Disasters Letters

The U.S. Department of Education (ED) recently issued a Dear Guaranty Agency Director Letter (DGAD) 99-28 announcing a new policy for borrowers adversely affect by natural disasters.  Effective immediately, "Disaster Letter" notifications will no longer be needed or issued.  Loan holders will decide what constitutes a natural disaster for purposes of an administrative forbearance and may grant an administrative forbearance to borrowers who contact them asking for temporary relief from their loan obligations.

The holder may grant a forbearance for up to three months based on the borrower's oral or written request for assistance, and must document the reasons why it granted the forbearance, but does not need to obtain supporting documentation or a signed written agreement from the borrower to justify a forbearance for the initial three-month period. However, if the borrower requests to continue the forbearance past the initial period, the holder must obtain supporting documentation and a written agreement from the borrower.

A copy of the DGAD letter can be found on ED's web site at http://ifap.ed.gov  . If you are unable to access this web site and would like a copy of the DGAD letter, please contact Lynda Reid at (801) 321-7211. Any questions regarding this bulletin can be directed to the UHEAA Policy and Training Department at (801) 321-7166 or by e-mail at cjudd@utahsbr.edu.