Inside This Issue...
|
LENDER |
This edition of the ISAC Update is designed to resemble the layout of College Zone, with information categorized in the same manner as it appears on the Web site. The underlined headings at the beginning of each section of the Update identify where within College Zone you can find the details of what is discussed in the articles. Each heading is a menu item/link on the front page of the Lender Zone at collegezone.com.
|
Processes |
The following is a quick reference guide to the new variable interest rates effective July 1st. Link to the U.S. Department of Education’s (ED’s) Financial Partners Web site for more detailed interest rate information. Go directly to http://www.fp.ed.gov/PORTALSWebApp/fp/intrates.jsp or access it through the Lender Zone at “Processes,” “Loan Origination,” “Interest Rates”.
You can also use the “Lender Quick Links” menu on the right-hand side of the Lender Zone front page to access several other ED and NCHELP sites for interest rate information.
The variable interest rate for Federal Stafford loans is based on the 91-day Treasury Bill (T-bill) bond equivalent rate of 1.07%, plus the additional percentage.
| Loans Affected | Variable Interest Rate 7/1/2004-6/30/2005 |
Interest Rate Cap |
|
All loans with a first disbursement on or after 7/1/98
|
2.77% 3.37% |
8.25% 8.25% |
|
All loans with a first disbursement on or after 7/1/95 through 6/30/98
|
3.57% 4.17% |
8.25% 8.25% |
| All loans with a first disbursement on or after 7/1/94 through 6/30/95 (add 3.1%) | 4.17% | 8.25% |
| Loans to new borrowers with a first disbursement on or after 10/1/92 through 6/30/94 (add 3.1%) | 4.17% | 9% |
The variable interest rate for Federal PLUS loans with a first disbursement on or after July 1, 1998 is based on the 91-day T-bill bond equivalent rate of 1.07%, plus the additional percentage. Rates for PLUS and SLS loans disbursed prior to July 1, 1998 are based on the weekly average constant maturity treasury yield as published by the Board of Governors on the Federal Reserve System for the last calendar week ending on or before June 26th, which was 2.16%.
| Loans Affected | Variable Interest Rate 7/1/2004-6/30/2005 |
Interest Rate Cap |
| All Federal PLUS loans with a first disbursement on or after 7/1/98 (add 3.1%) | 4.15% | 9% |
| All Federal PLUS loans with a first disbursement on or after 7/1/94 through 6/30/98 (add 3.1%) | 5.26% | 9% |
| All Federal PLUS and SLS loans with a first disbursement on or after 10/1/92 through 6/30/94 (add 3.1%) | 5.26% | 10%-PLUS 11%-SLS |
| Federal PLUS and SLS loans with a first disbursement prior to 10/1/92 (add 3.25%) | 5.41% | 12% |
ED also announced the average bond equivalent rates for 91-day T-bills during the quarter ending June 30, 2004 as 1.12%; the average of the bond equivalent rates for the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in the same quarter was 1.23%. For detailed information regarding use of these rates in the calculation of special allowance payment, visit ED’s Financial Partners Web site, as referenced on page 1.
As a result of a recent program review conducted at ISAC by U.S. Department of Education (ED) staff, we have been asked to become more aggressive in ensuring that lenders and servicers are reporting the status of all outstanding loans in their portfolios. This loan status information is critical to maintaining current and accurate data within the National Student Loan Data System (NSLDS). In turn, NSLDS data is used for determining eligibility for student aid as well as cohort default rates for both lenders and colleges.
To assist you in determining whether all loans in your portfolio have been reported to ISAC, twice a year we provide you with an NSLDS Lender Manifest Report of Unreported Loans. This report identifies loans which need to be reconciled with our records. The most recent Report of Unreported Loans was sent in May, with a request that updated/corrected information be returned to ISAC no later than July 31, 2004, to coincide with the due date for the next required monthly submission of loan data.
For regular monthly reporting of loan status, lenders and servicers can choose from two options:
Because we must now be more diligent in monitoring the loan status reporting process, our future compliance reviews will indicate that lenders and servicers are expected to properly update all of the records on the Report of Unreported Loans. Failure to do so is likely to result in a review finding. More information about CAM, NSLDS Lender Manifest, and the Report of Unreported Loans can be found in the Processes area of the Lender Zone, under Account Maintenance.
Beginning in early July, transmission of the following Common Account Maintenance (CAM) loan record types expanded to allow two-way exchange between ISAC and lender/servicers.
Record Type 07 – Loan Period/Grade Level Change
Record Type 09 – Pre-Disbursement Change
Record Type10 – Post-Disbursement Change/Notification
Record Type 24 – Loan Increase
The implementation of two-way transmission of these record types will allow lenders/servicers to utilize the efficiencies of CAM to submit electronically many of the loan changes that are currently submitted to ISAC manually. CAM files support two-way communication between trading partners to report events as they occur, resulting in more accurate and timely exchange of information. We encourage you to begin testing as soon as possible.
Establishing a Testing Schedule
Prior to exchanging "live" records with ISAC, partners are required to submit test files to ISAC for each phase of CAM. Only after the test files have been successfully processed will “live” records be approved for submission.
To establish a testing schedule, please contact Sharon Bankston of the Lender Services Department at ext. 2826. The following information should be provided when scheduling testing:
|
Resources |
Because of the vital role lenders and servicers play in the prevention of student loan defaults, we'd like to take this opportunity to review for you the wide array of default prevention information and materials available to help counsel "at-risk" student loan borrowers.
Direct your student loan borrowers to College Zone and the many areas of the Web site that contain information about default and how to avoid it. Default Prevention information is accessible through the Student Zone in the “After College” section, under “Borrowing Basics” and through the home page under “Financial Aid Programs”.
Additionally, as an extension of our College Zone “one-stop source” approach to providing college information, a link to Mapping Your Future is located on the front page of the Student Zone. Mapping Your Future is a national collaborative public service project that also offers helpful default prevention information and materials for students, parents, schools and lenders. ISAC staff serve on the Mapping Your Future Default Prevention Team and contribute ideas and suggestions about the best ways to assist students with establishing a good financial base and ensuring that they keep it.
Take a look at all of the tools Mapping Your Future has to offer by accessing the “financial aid professionals” area of the site. Just a few of the many materials available for your student borrowers are “financial fitness tools” and a downloadable presentation with “default prevention tips and tools for borrowers”. In addition, each year thousands of student loan borrowers across the country are utilizing Mapping Your Future to electronically fulfill their entrance and exit counseling requirements.
We at ISAC offer materials that can be adapted to your own needs, or used as a supplement to counseling material you’ve produced yourself:
To order your supply of these pieces, visit the "Get the ISAC Materials You Need!" area of College Zone. Simply indicate the quantity you'd like to receive and submit your order online.
Any or all of these items can be invaluable resources when working with your student loan borrowers to encourage and promote successful loan repayment. For the convenience of your student loan borrowers and their families, consider adding links to both College Zone and Mapping Your Future to your own institution’s Web site. (Find a .jpg file of the College Zone logo in the e-Library, under #9, “Job Aids & Reference Materials”.) Working together, we can help students with one of the key steps in building a healthy financial future.
|
e-Library |
The July 2004 version of the Common Manual…Unified Student Loan Policy is now available. As in past years, we will provide access to the manual on our Web site and as part of the Common Manual e-Collection CD-ROM.
The Common Manual is located in the e-Library of the Lender Zone, under item #6, “Manuals & Handbooks.” There are two electronic versions available through the Web: the Electronic Common Manual (ECM) and the Integrated Common Manual (ICM). The ECM has been updated to reflect the July 2004 version that was recently approved by the Common Manual guarantors. The ICM is used to reflect policy proposals that are approved by the Common Manual Governing Board each month, making it the most up-to-date source of FFELP policy. A new feature of the Web-based versions of the Common Manual is the ability to “hyperlink” from within the Manual to the actual statutory or regulatory language referenced.
In addition to the July 2004 version of the manual, the Common Manual e-Collection also contains a number of other essential resources for the financial aid professional. Some of the materials included are the Higher Education Act, common forms, Dear Colleague/Partner Letters and Department of Education Announcements. If you would like to order an e-Collection CD-ROM, complete the attached form and mail or fax it as indicated in the directions.
The most recent regular meeting of the Illinois Student Assistance Commission was held on Friday, June 11th, on the campus of Dominican University. Action was taken on the following items of interest to our lender partners:
A special meting of the Commission was convened on June 29th primarily to determine the allocation of Monetary Award Program (MAP) grants, based on anticipated funding for the upcoming 2004-05 academic year. Following the meeting, an e-Message was sent on June 30th through College Zone’s e-Messaging service detailing the results of the special meeting. Access the text of the e-Message through the “News You Can Use” area of College Zone’s e-Library.
|
Contact Us |
Questions from lenders and servicers regarding the administration of the Federal Family Education Loan Program (FFELP), or any programs or services administered by ISAC, other than those that are claim-related, can be directed to Lender Services by sending an e-mail message to lenderservices@isac.org. You can also call 800.899.ISAC (4722) between 8:30 a.m. and 5:00 p.m. CT, weekdays, and speak with one of the following staff members:
For inquiries related specifically to claim filing, reimbursement and the post-reimbursement process, the lenderreimbursement@isac.org e-mail address can be used to communicate directly with staff who specialize in claim issues.
|
College Zone's e-Messaging Service |
Help us reduce the volume of paper newsletters we mail to our partners by subscribing to receive information from us electronically. College Zone e-Messaging lets you receive program and services updates from us directly through your e-mail.
Our goal is to completely replace the production and mailing of paper newsletters as soon as the majority of our lending partners have subscribed for the e-Messaging service. Here's where you can help...as of mid-June, fewer than 70 of the nearly 400 lenders and servicers who currently receive the paper ISAC Update have signed up for e-Messaging. If you already receive College Zone e-Messages, you know how simple the registration process is, and you've experienced the convenience of receiving information right at your computer, without waiting for the mail to arrive on your desk. Encourage your colleagues to sign up as well!
If you haven't yet had the opportunity to subscribe, why not do so right now? Simply use the "Sign Up Now!" link provided in the top right corner of the Lender Zone front page, or go directly to:
http://www.collegezone.com/lenderzone/295_lender_emessaging.asp.
Help us save a tree or two, and get your information in a more efficient manner - all at the same time!
|
Get the ISAC Materials You Need! |
We have a few new pieces that we’re anxious to tell you about. Read on to learn more, and then place your order for a supply of each to keep on hand.
Use the “Get the ISAC Materials You Need!” link on College Zone to make your ordering process quick and easy!
|
Lender Quick Links - NCHELP |
The first collaborative program reviews were conducted at lending and servicing institutions as the Common Review Initiative (CRI) was launched recently. In an initiative similar to that which resulted in Common Manual...Unified Student Loan Policy, representatives from several guaranty agencies, including ISAC, have collaborated to create a means to eliminate program review redundancy and incorporate consistent and best practices to conduct more comprehensive lender reviews.
Because the highest percentage of FFELP loans is concentrated among a small number of lenders and servicers across the country, multiple program reviews were being conducted each year at the same institution. With CRI, teams made up of staff from several guaranty agencies and the U. S. Department of Education (ED) will instead conduct only one review during the required two-year period, using a standardized review process. The results of the CRI are expected to be improved quality and efficiency of the reviews, elimination of the disruption caused to lenders by multiple on-site reviews each year, and significant reductions in the costs associated with the review process for all involved - lenders and servicers, ED, and guarantors.
ED's Review Guide was used as the base for establishing procedures and staff from ED are responsible for reviewing all aspects of the Lender's Interest and Special Allowance Request and Report (LaRs). Although some individual guaranty agencies may be "closing out" their own schedule of required reviews, future program reviews of lenders and servicers impacted by the CRI will be done on a collaborative basis. There currently are 32 of 36 guaranty agencies participating in CRI.
Additional information regarding the CRI can be found on NCHELP's Web site, under NCHELP Initiatives at http://www.nchelp.org/pages/page.cfm?id=24. Or you can use the Lender Quick Links on the front page of the Lender Zone to link to NCHELP.
|
Lender Quick Links - Mapping Your Future |
An award-wining Web site, Mapping Your Future is a collaborative effort among key sectors within the financial aid industry. Designed to provide relevant and up-to-date information to college-bound students, Mapping Your Future supplements and complements the college planning and financial aid information available through College Zone.
The success of Mapping Your Future, which is a nonprofit, non-proprietary and neutral organization, is dependent upon the support of Sponsors and Friends. Lenders, servicers, and secondary markets can become Friends of Mapping Your Future for an annual $3,000 fee, and receive several benefits. Among them are free services and applications you can offer to your customers and the colleges with which you work. One of the more popular applications, Online Student Loan Counseling, has saved colleges an estimated $75 million over the past few years. Additionally, staff members of sponsoring institutions serve as volunteers on Mapping Your Future Teams to contribute to the design of the site, content, projects and services.
Consider becoming a Friend of Mapping Your Future and make not only a monetary contribution, but an intellectual one as well. For more information on joining Friends of Mapping Your Future, please contact Sherry Hildebrand at 512.219.2886 or sherry.hildebrand@mapping-your-future.org.
|
Training Calendar |
We’ll be at these locations on the following dates for this year’s Fall Seminars for Partners. Mark your calendars now and look for registration information in the fall. In the unlikely event a change in the seminar schedule becomes necessary, we will let you know through our normal College Zone communication methods.
| Date | Location | |||||
| November 16 | John A. Logan College | |||||
| November 17 | Joliet Junior College - Renaissance Center Eastern Illinois University | |||||
| November 18 | Joliet Junior College - Renaissance Center Rock Valley College | |||||
| November 19 | Rock Valley College | |||||
| November 22 | Illinois College James R. Thompson Center | |||||
| December 3 | ISAC - Deerfield | |||||
| December 7 | University of Illinois at Springfield Saint Xavier University | |||||
| December 8 | Heartland Community College Saint Xavier University | |||||
| December 10 | Eureka College Loyola University - Lake Shore Campus | |||||
| December 14 | Knox College | |||||
| December 15 | Oakton Community College | |||||
| December 16 | Oakton Community College | |||||
| December 17 | McKendree College |
|
Miscellaneous |
We have established a program which allows defaulted student loan borrowers to make their payments electronically through an Automated Clearinghouse (ACH) network (automated debit transactions from borrowers’ accounts). Providing an easier and quicker method for borrowers to make their payments is expected to improve payment consistency, which can lead to reinstatement of eligibility for federal financial aid. Additionally, consecutive on-time payments can establish a borrower’s ability to participate in the federal Loan Rehabilitation Program and to apply for federal Consolidation Loans.
ISAC disclaims all responsibility and liability for the reader's reliance on information contained in this publication as it may represent only part of the complete guidance on a topic or have been superseded by subsequent publication(s) or changes in State or Federal law.