Common Manual Interim Policy Updates

As you are aware, the Common Manual Governing Board periodically approves modifications to the Common Manual.  Recently, several policies were approved to modify the Common Manual.  These changes will be incorporated into the Common Manual when the next annual update is published in July 2001.

Attached are interim updates to the Common Manual which address policy revisions approved on June 15, 2000.  Pay particular attention to the effective dates for these interim policy updates.

Any questions related to the attached Common Manual interim policy update should be directed to the UHEAA Policy and Training Department at (801) 321-7166 or by email at cjudd@utahsbr.edu.
 

Attachment

New Exit Counseling Requirements
The Common Manual has been updated to include the following new regulatory requirements for exit counseling:

. Schools may use audiovisual or interactive electronic means to conduct exit counseling.
. Schools may provide exit counseling materials to study-abroad students by mail.
. Schools may use interactive electronic means for students who withdraw or fail to complete exit counseling.
. Schools are now required to provide the information listed in regulations and in subsection 4.9.C. of the Common Manual.
. Schools must inform students with SLS loans that refinancing of SLS loans is available.
. Schools must explain conditions for full cancellation of the loan, as well as partial cancellation.
. Schools must provide each student with information about the Student Loan Ombudsman's office.
. Schools must explain the use of the Master Promissory Note.
. Schools must take reasonable steps to ensure that the student receives, participates in, and completes exit counseling if it is conducted by interactive electronic means.

Affected Sections:    4.9.C.
Effective Date:    Students who cease half-time attendance on or after July 1, 2000, unless implemented earlier by the school.
Basis:    §682.604(g)-as updated in the Federal Register dated November 1, 1999.
 

Lender Record Retention Time Frames Modified
The Common Manual has been revised to incorporate new record retention time frames for loan sales or transfers.  A lender must retain a record of the notice of loan sale or transfer that was provided to the borrower for at least 3 years after the date the loan is paid in full by the borrower or 5 years after the date the lender receives payment in full from any other source.
 
Affected Sections:    3.4.B.
Effective Date:    Loan records retained by the lender on or after July 1, 2000, for loans paid in full by the borrower or from any other source.
Basis:    §682.414(a)(4) and (5)-as updated in the Federal Register dated October 29, 1999.

Distinguishing between Disbursed Aid and Disburseable Aid
The Common Manual now includes the following definition of disburseable aid:
 
Disburseable aid equals disbursed aid plus the amount of any other Title IV aid that could have been appropriately disbursed to the student during the payment period or period of enrollment in which the student withdrew.  Title IV aid that could have been disbursed includes aid that the school awarded to the student for the payment period or period of enrollment, but that was not credited to the student's account or disbursed to the student as of the date that the school became aware that the student withdrew.  These funds are subject to the late disbursement and delivery provisions described in subsections 6.2.H. and 6.3.H.  An example of aid that could have been disbursed would be funds that the school could not receive from a lender due to technical difficulties in the disbursement process or circumstances beyond the school's control.

Affected Sections:    4.7.A.
Effective Date:    Title IV recipients who withdraw on or after October 7, 2000, unless implemented earlier by the school on or after November 1, 1999.
Basis:    §668.22(e) and (l)
 

Scheduled Breaks and Calculations of Earned Aid
The Common Manual has been revised to define the scheduled breaks that schools must exclude when calculating the percentage of the payment period or period of enrollment that a student completed.  For the purpose of this calculation, "calendar days" refers to all days within the period, excluding scheduled breaks of at least five consecutive days.  Scheduled breaks measure the time between the last day of scheduled classes and the next day that classes are held, and include weekends and any periods during which the student is on an approved leave of absence.  Following are examples of the periods that should be excluded from the calculation:

If a break begins on Wednesday, no classes are held the following weekend, and classes resume on Monday, the weekend days are included in the break.  By including the weekend, the break is five days long, and five days must be excluded from both the numerator and the denominator of the aid earned calculation.

If a break begins after classes end on Friday and classes resume on Monday following a one-week break, both weekends are included in the break.  This break is nine days long, and nine days must be excluded from both the numerator and the denominator of the aid earned calculation.

Affected Sections:    4.7.A.
Effective Date:    Title IV recipients who withdraw on or after October 7, 2000, unless implemented earlier by the school on or after November 1, 1999.
Basis:    §668.22(f)(2)
 

Entrance Counseling Requirements
Current Common Manual policy has been revised to differentiate between the required and recommended information that a school must include in entrance counseling for Stafford loan borrowers.  In conducting entrance counseling, the Department stipulates that a school must:

. Explain the use of the Master Promissory Note.
. Emphasize to the student the seriousness and importance of the repayment obligation the student is assuming.
. Describe in forceful terms the likely consequences of default, including adverse credit reports and litigation.
. Except for student who receives a loan made or originated by the school, the school must emphasize that the student is obligated to repay the full amount of the Stafford loan, even if the student does not complete the program, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student purchased from the school.

In an effort to improve a student's understanding of  his or her loan repayment obligation, the Department recommends that the school provide additional information as outlined in Appendix D of 34 CFR 668 and The Federal Student Aid Handbook as part of the entrance counseling provided.

Affected Sections:    4.9.B.
Effective Date:   Entrance counseling conducted by the school on or after July 1, 2000, unless implemented earlier by the school.
Basis:    §682.604(f)- as updated in the Federal Register dated November 1, 1999; Appendix D of §668.
 

More MPN Provisions
The Common Manual has been updated to reflect the following provisions of the Master Promissory Note (MPN):

. The MPN authorizes the lender to defer all of a borrower's FFELP loans based on information indicating the borrower is enrolled at least half time.
. The MPN authorizes the lender to capitalize accrued interest on all the borrower's FFELP loans, including those made under the MPN.
. The MPN authorizes the lender to align repayment of the borrower's Stafford and SLS loans.

These provisions have been in effect since the implementation of the first MPN.

Affected Sections:    7.3.A., 7.7.A., 7.11.B.
Effective Date:    Loans disbursed on or after July 1, 2000, or earlier if the loan was made using the Master Promissory Note.
Basis:    Master Promissory Note
 

Glossary Definition for Default Aversion Request Period
The definition for Default Aversion Request Period is being updated as follows:

Default Aversion Request Period:  The period during which a lender must submit a request for default aversion assistance from a guarantor.  This period begins no earlier than the 60th day and ends no later than the 120th day of the borrower's delinquency.

Affected Sections:    Appendix G
Effective Date:    Loans for which the first day of delinquency on the oldest outstanding due date is on or after July 1, 2000, unless implemented earlier by the guarantor.
Basis:    §682.404(a)(2) and (k) and §682.411(i)-as updated in the Federal Register dated October 29, 1999.