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 February 21, 2002.  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

Summer Bridge Extension
The Common Manual has been revised to add that a PLUS borrower may be eligible for a summer bridge extension and removes the unnecessary assertion that a Stafford loan borrower is not required to request the summer bridge extension if the borrower has not used the grace period.
 

Affected Sections:	7.10.B.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	§682.210(b)(4) and (6); §682.210(s)(1).

 

Reduced Interest Rates
The Common Manual has been revised to include information in chapter 7 regarding the servicing of loans with interest rates that are less than the statutory maximum interest rate (statutory rate).  If the lender chooses to offer the borrower an interest rate that is less than the statutory rate, the lender must disclose to the borrower that the rate will end on the date the loan is purchased by the guarantor as a default or ineligible borrower claim.  After the defaulted loan or an ineligible borrower claim is purchased by the guarantor, the loan reverts to the statutory rate.  Also, minor revisions are made to subsection A.1.A. to more closely reflect regulatory guidance.
 

Affected Sections:	7.7, A.1.A.
Effective Date:	For loans entering repayment at a reduced interest rate on or after March 1, 1997, unless implemented earlier by the guarantor.
Basis:	§682.300(d)(1).

 

Loans Not Eligible for Bankruptcy Claim Payment
Common Manual bankruptcy policy has been revised to clarify that if a loan is in any status other than repayment at the time the bankruptcy notification is received by the lender, the lender should ascertain the correct status for a loan at the conclusion of the bankruptcy action and place the loan into the applicable status.  Prior policy language may have inadvertently implied that the loan should be returned to the previous loan status, as opposed to the applicable loan status, at the conclusion of the bankruptcy action.
 

Affected Sections:	8.2.D., CCI8.2.D.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	§682.402(f)(5)(ii).

 

Penalties for Due Diligence Violations
The Common Manual has been revised to ensure consistency between subsections that address the cure of a loss of guarantee.  The policy revises subsections 8.8.C. and ^CCI8.8.C., adding a statement that the earliest unexcused violation date is the day after the date of default if there are three or more due diligence violations of 6 days or more each (21 days or more in the case of a transfer) and no gap of 46 days or more (61 days or more in the case of a transfer).  It also clarifies that the references to subsections 8.8.H. and ^CCI8.8.H. are for cure procedures.
 

Affected Sections:	8.8.C., CCI8.8.C.
Effective Date:	Retroactive to loans on 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, Appendix D.

 

Cure Procedures for Due Diligence Violations and Gaps
Subsections 8.8.H. and ^CCI8.8.H. of the Common Manual have been restructured and reworded to clarify the reasons for a loss of guarantee and the cure procedures that must be performed to reinstate the guarantee on a loan after the guarantee has been cancelled as a result of due diligence violations or gaps.  Previously, the reasons for a loss of guarantee were incorrectly identified as options available for curing the loan.
 

Affected Sections:	8.8.H., CCI8.8.H.
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	None.

 

Common Findings for Program Reviews
The Common Manual has been revised to remove outdated examples of common program review findings, e.g., late refunds, incorrect refund calculation, and noncompliance with Appendix D from 34 CFR 682.  The Common Manual has also been revised to add current examples of common program review findings, e.g., improper performance of return of Title IV funds procedures, including incorrect calculations, late returns to lenders, funds returned to the wrong Title IV account, and errors on ED Form 799.
 

Affected Sections:	11.3.C.
Effective Date:	Not applicable.
Basis:	Final Rules published in Part VII of the Federal Register, pages 65631-65651, dated November 1, 2000.

 

Delete Glossary Definition of Multiple Data Entry Processor
The Common Manual has been revised to delete the definition of "Multiple Data Entry (MDE) Processor" from appendix G.  This term is not used within the text of the manual.
 

Affected Sections:	Appendix G
Effective Date:	Retroactive to the implementation of the Common Manual.
Basis:	None.