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 January 18, 2001.  Pay particular attention to the effective dates for these interim policy updates.

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

Attachment

Updates to The Life of a Stafford Loan Flow Chart
"The Life of a Stafford Loan" flow chart in the Common Manual has been revised to include a reference to the Loan Forgiveness Program for Teachers.
 

Affected Sections:	2.2.A.
Effective Date:	New borrowers on or after October 1, 1998.
Basis:	HEA 428J; §682.215.

 
Updates to The Life of a Stafford Loan and The Life of a PLUS Loan Flow Charts
"The Life of a Stafford Loan" and "The Life of a PLUS Loan" flow charts in the Common Manual have been revised to indicate that a borrower may be determined eligible for a closed school loan discharge with or without submitting an application.
 

Affected Sections:	2.2.A.
Effective Date:	Closed school loan discharge determinations, made without the borrower's submission of a request form on or after July 1, 2000.
Basis:	Dear Guaranty Agency Letter GEN-99-37/99-L-218/99-G-325, dated April 1999, and Final Rules published in the Federal Register on October 29, 1999.

 

Updates to The Life of a Stafford Loan and The Life of a PLUS Loan Flow Charts
"The Life of a Stafford Loan" and "The Life of a PLUS Loan" flow charts in the Common Manual have been revised to indicate the availability of an unpaid refund discharge for an eligible borrower.  In addition, language has been added to clarify that an outstanding loan balance may remain after the processing of a discharge.
 

Affected Sections:	2.2.A.
Effective Date:	Completed unpaid refund discharge requests received, or eligibility determinations made, on or after July 1, 2000.
Basis:	§682.402(l).

Updates to The Life of a PLUS Loan Flow Chart
"The Life of a PLUS Loan" flow chart in the Common Manual has been revised to indicate that the lender will file a bankruptcy claim with the guarantor only when the borrower files a Chapter 12 or 13 bankruptcy or hardship petition.
 

Affected Sections:	2.2.A.
Effective Date:	Loans on which a borrower files a petition for bankruptcy on or after October 8, 1998.
Basis:	§682.402(f)(5)(i)(A).

Loan Sales Involving the MPN
The Common Manual has been revised to clarify that in the case of loans originated using a Master Promissory Note (MPN), each loan may be separately enforced based on the original MPN or a true and exact copy of the MPN.  If a lender sells a loan but retains some loans under the existing MPN, then each lender may own separate loans under the same MPN.  Also, if the original lender assigns the right to offer new loans under that MPN, then the original lender may not make new loans under the MPN. The new lender may use the original MPN or a true and exact copy of the MPN to enforce any loans it acquires and any future loans it makes using that MPN.
 

Affected Sections:	3.4.B., 6.1.A.
Effective Date:	Retroactive to the implementation of the Master Promissory Note (MPN).
Basis:	DCL GEN-98-25; NCHELP's Master Promissory Note Q & A document dated May 2000.

 

Dependent Students Not Eligible for Additional Unsubsidized Stafford Funds at Nonparticipating PLUS Loan Schools
Based upon the 1998 Amendments to the Higher Education Act of 1965, the Department of Education stated that granting automatic eligibility for additional unsubsidized Stafford loans based on a school's decision not to participate in the PLUS loan program is beyond the scope of the intent of the law. The Department clarified its position on this issue in the preamble to the Notice of Proposed Rulemaking published in the Federal Register on August 10, 1999.   The manual has been revised to clarify that a school is not able to certify additional unsubsidized Stafford loan funds for a dependent student based on the school's decision not to participate in the PLUS Loan Program.  If a dependent student's parent is unable to obtain a PLUS loan at a school that participates in the PLUS loan program, the school may certify additional unsubsidized Stafford loan funds for the student to the full extent of the loan limit-provided that the loan funds do not exceed the student's need.
 

Affected Sections:	5.3, 5.7.H.
Effective Date:	Unsubsidized Stafford loan funds certified by the school beginning no later than July 1, 2000.
Basis:	NPRM published in the Federal Register on August 10, 1999, page 43438.