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 2002.

    Attached are interim updates to the Common Manual which address policy revisions approved on June 21, 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.
 

Loan Disbursement
Section 6.2 of the Common Manual has been updated to reflect regulatory language that prohibits the lender from disbursing loan proceeds prior to the disbursement date certified by the school on the disbursement schedule or any revised disbursement date that the school, or guarantor acting on behalf of the school, subsequently requests. Subsection 6.2.A. of the Common Manual has been updated to reflect that the lender must not disburse loan proceeds before obtaining a valid common application and promissory note or MPN, a disbursement schedule certified by the school, and except with the guarantor's prior approval, a guarantee disclosure from the guarantor.
 

Affected Sections:	6.2, 6.2.A.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	§682.207(b)(1)(i)(A) and (B).

Prehearing Conferences and Informal Compliance Procedures
The Common Manual has been updated to reflect regulatory language that states that in a Limitation, Suspension, or Termination action, a prehearing conference is available to either a school or, if applicable, a third-party servicer; and an informal compliance procedure is available to either a lender or a servicer.
 

Affected Sections:	12.2.B.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	§668.85; §668.86; §668.86(b)(1)(ii); §668.87; §682.401(b)(6)(i); §682.401(b)(7)(i); §682.703.

Deferred Interest Billing Rules Corrected
The Common Manual has been corrected to more accurately reflect the provisions of 34 CFR 682.300(c)(3), which details when the lender may begin billing the Department for interest benefits on a subsidized Federal Stafford loan, and to incorporate clarifications provided in correspondence from the Department of Education.  Regulations provide that the earliest date on which the Department will pay interest benefits on a Stafford loan is based on when the loan was disbursed with respect to the first day of the period of enrollment and the method of disbursement, as follows:

1.    If a loan is disbursed on or before the first day of the period of enrollment and the funds are disbursed-
  

For second and subsequent disbursements, accrual of interest benefits begins on the date the second or subsequent disbursement is made.

For a subsidized Stafford loan subject to delayed delivery requirements (a first-year, first-time undergraduate Stafford loan borrower attending a school subject to delayed delivery provisions), the lender may begin accrual of interest benefits on the loan as follows:
 

.	3 days after the date of the first disbursement if the funds are disbursed by either master check or EFT, regardless of when the funds are disbursed.
.	On the date the first disbursement is made for funds disbursed by individual check on the first date of the period of enrollment.
.	3 days after the date of the first disbursement if the funds are disbursed by individual check after the first day of the period of enrollment.

 

Affected Sections:	A.1.B.
Effective Date:	Retroactive to the implementation date of the Common Manual.
Basis:	§682.300(c)(3); March 10, 2000 private letter from the Department.