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 March 15, 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

Determination and Certification of Eligibility
The Common Manual has been updated to clarify that to participate in any Title IV program, a school must establish its eligibility under the Higher Education Act of 1965, as amended, in accordance with the procedures specified by the Department.

To establish its eligibility, a school must submit an application to the Department to request a determination that it qualifies as an eligible institution.  In addition, the school must include in the application for determination of FFELP eligibility a request for certification to participate in the FFELP.

To be certified for participation, a school must meet the qualifications of an eligible institution (see section 4.1); the school must meet administrative capability and financial responsibility requirements (see sections 4.2 and 4.3); and if the school is participating for the first time in Title IV programs, and it has not requested and been granted a training waiver, designated school administrators defined by the Department must complete Title IV training within 12 months after the school executes the Program Participation Agreement.  A school that is currently participating in some Title IV programs is not required to have certification training if it is only requesting approval to participate in additional Title IV programs.
 
 

Affected Sections:	4.1.A.
Effective Date:	Schools establishing eligibility on or after July 1, 2001.
Basis:	Final Rules published in Part IX of the Federal Register, pages 65662-65676, dated November 1, 2000; §600.20(a) and (f); §668.13.

 

Increase in Level of Program Offering
The Common Manual has been revised to add that a school must apply to the Department to increase the level of program offering (e.g., offering graduate degree programs when it previously offered only baccalaureate degree programs) and obtain approval before delivering Title IV funds to students enrolled in the new programs at the increased level.
 
 

Affected Sections:	4.1.C.
Effective Date:	Schools increasing the level of program offering on or after July 1, 2001.
Basis:	Final Rules published in Part IX of the Federal Register, pages 65662-65676, dated November 1, 2000; §600.20(c)(2); §600.20(f)(3).

 

Converting an Eligible Location to a Branch Campus
The Common Manual has been revised to add that a school must apply to the Department and wait for approval to convert an eligible location to a branch campus.  The school may continue to deliver Title IV funds to students attending that location.
 
 

Affected Sections:	4.1.C.
Effective Date:	Schools that convert an eligible location to a branch campus on or after July 1, 2001.
Basis:	Final Rules published in Part IX of the Federal Register, pages 65662-65676, dated November 1, 2000; §600.20(c)(5) and §600.20 (4).

 

Totally and Permanently Disabled Definition Change
The Common Manual has been revised to incorporate a change to borrower eligibility requirements if the borrower has had a prior loan discharged due to total and permanent disability.  As provided by the Final Rules in the November 1, 2000, Federal Register, a borrower who has had a prior loan discharged due to total and permanent disability must meet the following requirements to be eligible to receive a new Stafford or PLUS loan:
 

.	Obtain a physician's statement certifying that the borrower may now engage in "substantial gainful activity."
.	Sign a statement acknowledging that any new loan the borrower receives may not be discharged due to the same or any disability existing at the time the new loan is made, unless the disabling condition substantially deteriorates to the extent that the definition of total and permanent disability is met.
.	Reaffirm any loan that had been discharged due to total and permanent disability on or after July 1, 2001, but before July 1, 2002, if the borrower receives a new loan within three years of the date the borrower became totally and permanently disabled, as certified by a physician.  (A borrower who has had a prior loan discharged due to total and permanent disability before July 1, 2001 is not required to reaffirm the discharged obligation.)

For these purposes, "substantial gainful activity" may be defined as the ability to work and earn money.
 
 

Affected Sections:	5.2.E.
Effective Date:	Stafford and PLUS loan eligibility determinations made on or after July 1, 2001.
Basis:	Final Rules published in Part X of the Federal Register, pages 65678-65695, dated November 1, 2000; §682.201(a)(6)(ii) & (iii).

 

PLUS Borrowers with Adverse Credit
The Common Manual has been updated to clarify that in those cases in which a lender approves a PLUS loan for an applicant with an adverse credit history, the lender must retain a record supporting its decision based on extenuating circumstances.
 
 

Affected Sections:	5.2.F, 5.4, 6.1.A.
Effective Date:	PLUS loans made on or after July 1, 2001, unless implemented earlier by the lender.
Basis:	Final Rules published in Part V, of the Federal Register, pages 65676-65694, dated November 1, 2000; §682.201.

 

Modifying the Disbursement Schedule
The Common Manual has been updated to clarify that Stafford and PLUS disbursements must be made in accordance with the original disbursement schedule provided by the school or any request made by the school, or guarantor acting on behalf of the school, modifying that schedule.
 
 

Affected Sections:	5.8.D., 6.1.A., 6.2.A.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	Final Rules published in Part V of the Federal Register, pages 65616-65622, dated November 1, 2000; §682.207(b)(1)(i)(B) and §682.207(c)(3).

 

Notification of Late Disbursements
The Common Manual has been updated to eliminate the requirement that a lender, when knowingly making a late disbursement, must include a notice to the school indicating that the loan proceeds should be delivered as a late disbursement.
 
 

Affected Sections:	6.2.H.
Effective Date:	Late disbursements issued by lenders on or after July 1, 2001.
Basis:	Final Rules published in Part V of the Federal Register, pages 65616-65622, dated November 1, 2000; §682.207(f)(2).

 

Deferment Backdating
The Common Manual has been updated to remove existing 6-month backdating restrictions on all deferments except the initial unemployment deferment that is based on a borrower's self-certification.  Most deferments now begin on the date the condition entitling the borrower to the deferment first existed, as determined by the lender. However, an initial unemployment deferment based on a borrower's self-certification may not begin more than 6 months before the date the lender receives a request and documentation required for the deferment.  Any extension of an existing unemployment deferment or an unemployment deferment that is based on evidence of the borrower's eligibility for unemployment benefits is not subject to the 6-month backdating restriction.  For all deferment types, other than an in-school deferment, elimination of the 6-month backdating restriction is only applicable for deferments granted on or after July 1, 2001, for any period of deferment that includes July 1, 2001 or a later date.
 
 

Affected Sections:	7.9.A., 7.10.C., 7.10.D., 7.10.E., 7.10.F., 7.10.G., 7.10.H., 7.10.I., 7.10.J., 7.10.K., 7.10.L., 7.10.M., 7.10.N., 7.10.O., 7.10.P., 7.10.Q.
Effective Date:	Deferments granted on or after July 1, 2001, for any period of deferment that includes July 1, 2001, or a later date.
Basis:	Final Rules published in Part V of the Federal Register, pages 65616-65622, dated November 1, 2000; §682.210.

 

Unemployment Deferment Documentation
The Common Manual is being revised to allow for more flexible documentation requirements for a borrower who wants to continue an unemployment deferment based on the borrower's self-certification of his or her search for employment following the initial period of deferment.  A borrower must provide the lender with information showing that the borrower made at least six diligent attempts to secure full-time employment during the prior 6-month period.  Revised policy removes the previously required documentation and states that the information may include the employer's name, address, telephone number, electronic addresses, or other information acceptable to the lender showing the borrower made 6 diligent attempts to obtain full-time employment.
 
 

Affected Sections:	7.10.E.
Effective Date:	Unemployment deferments granted on or after July 1, 2001.
Basis:	Final Rules published in Part V of the Federal Register, pages 65616-65622, dated November 1, 2000; §682.210(h)(2)(i).

 

Death Claim Documentation
The Common Manual has been revised to limit the acceptable documentation permitted for death claims in accordance with the Final Rules published in Part X of the Federal Register, pages 65676-65695, dated November 1, 2000.  Lenders and guarantors may now accept only an original or certified copy of the death certificate as proof of death.  In the event of an exceptional circumstance and on a case-by-case basis, the guarantor's CEO may approve a discharge based on other reliable documentation.
 
 

Affected Sections:	8.2.B., 8.3.B., 8.8.D., CCI8.2.B., CCI8.3.B., CCI8.8.D.
Effective Date:	Death claims filed on or after July 1, 2001, unless implemented earlier by the guarantor.
Basis:	Final Rules published in Part X of the Federal Register, pages 65676-65694, dated November 1, 2000; §682.402(b)(2).

 

Totally and Permanently Disabled Definition Change
The Common Manual has been revised to incorporate the change to the definition of a total and permanent disability for the purpose of obtaining a loan discharge as provided by the Final Rules in the November 1, 2000, Federal Register.  The new definition is as follows:

Totally and Permanently Disabled: A total and permanent disability is defined as the condition of an individual who is unable to work and earn money due to an injury or illness that is expected to continue indefinitely or result in death.

Administrative Forbearance Clarified for Total and Permanent Disability
The Common Manual has been revised to clarify that if a lender receives reliable information indicating that a borrower has become totally and permanently disabled, the lender may grant the borrower an administrative forbearance, not to exceed 60 days, until the lender receives certification of the borrower's total and permanent disability.  If the lender does not grant the borrower an administrative forbearance, the lender must continue collection activity until it receives certification of the borrower's total and permanent disability, or until it receives a letter from the physician requesting additional time to determine whether the borrower is totally and permanently disabled.  The addition of the administrative forbearance language coordinates subsections 8.2.C. and ^CCI8.2.C. of the manual with the existing administrative forbearance policy in subsection 7.11.B.
 
 

Affected Sections:	8.2.C., CCI8.2.C.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	§682.211(f)(5).