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AwardYear: 1998-1999 EnterChapterNo: 10 EnterChapterTitle: Federal Family Education Loan Program SectionNumber: SectionTitle: Contents PageNumbers: INTRODUCTION . . . . . 1 SECTION 1: BORROWER AND INSTITUTIONAL ELIGIBILITY . . . . . 3 Student Eligibility Criteria . . . . . 3 Financial Need . . . . . 4 Eligibility Criteria Specific to Parent Borrowers . . . . . 7 Lender of Last Resort . . . . . 8 Institutional Eligibility . . . . . 8 SECTION 2: MAKING LOANS . . . . . 11 The Loan Application . . . . . 11 Determining the Loan period . . . . . 13 Certifying a Loan Application . . . . . 15 Annual Loan Limits . . . . . 18 Prorated Annual Loan Limits--Subsidized and Unsubsidized Stafford Loans . . . . . 23 Type of Academic Year and Frequency of Annual Loan Limits . . . . . 26 Aggregate Loan Limits . . . . . 29 Increased Loan Limits for Health Education Assistance Loan (HEAL) Students . . . . . 30 SECTION 3: PAYMENT TO THE BORROWER . . . . . 31 Definitions of Delivery and Disbursement . . . . . 31 Financial Aid History and NSLDS . . . . . 32 Methods of Disbursing and Delivering Loan Funds . . . . . 32 Disbursement and Delivery Requirements . . . . . 33 Overawards . . . . . 37 Credit Balances . . . . . 38 Late Disbursement . . . . . 38 Borrower Ineligibility and Return of Funds to Lender . . . . . 39 Reimbursement Payment Method . . . . . 41 SECTION 4: REPAYMENT . . . . . 43 Grace Periods . . . . . 43 Interest Rates . . . . . 44 Additional Costs of Borrowing . . . . . 47 Repayment of Federal Stafford Loans . . . . . 48 Repayment of Federal PLUS Loans . . . . . 52 Capitalization of Interest . . . . . 53 Repayment Disclosure Statement and Billing . . . . . 53 SECTION 5: DEFERMENT & FORBEARANCE . . . . . 55 In-School Deferment . . . . . 56 Unemployment Deferment . . . . . 56 Economic Hardship Deferment . . . . . 57 Additional PLUS Loan Deferment . . . . . 57 Deferment Eligibility Issues . . . . . 58 Deferment Provision Chart Footnotes . . . . . 59 Optional forbearance . . . . . 62 Mandatory Forbearance . . . . . 64 Administrative Forbearance . . . . . 65 Mandatory Administrative Forbearance . . . . . 66 Interest Accruing During Deferment and Forbearance . . . . . 66 SECTION 6: LOAN DISCHARGE . . . . . 67 Death and Permanent Disability Discharges . . . . . 67 Bankruptcy Discharge . . . . . 67 Other loan cancellation provisions . . . . . 67 Effect on a Borrower's SFA Eligibility . . . . . 68 Payments Made after Discharge . . . . . 70 Repayment by the U.S. Department of Defense . . . . . 70 SECTION 7: DELINQUENCY AND DEFAULT . . . . . 71 Consequences of Default . . . . . 71 Reinstatement of Eligibility after Default . . . . . 74 Loan Rehabilitation . . . . . 74 SECTION 8: CONSOLIDATION LOANS . . . . . 77 Federal Consolidation Loans . . . . . 77 Applying for a Consolidation Loan . . . . . 78 Borrower Eligibility for a Federal Consolidation Loan . . . . . 78 Repayment and Deferment . . . . . 80 SECTION 9: COUNSELING STUDENTS . . . . . 83 Entrance Counseling . . . . . 83 Exit Counseling . . . . . 88 SECTION 10: DEFAULT REDUCTION MEASURES . . . . . 93 Loans Included in a School's Cohort Default Rates . . . . . 93 Calculating Cohort Default Rates . . . . . 94 Changes Occurring after an Official Cohort Default Rate Calculation . . . . . 97 Draft Cohort Default Rates . . . . . 98 Change in Status of a School . . . . . 99 Consequences Associated with High Official Cohort Default Rates . . . . . 100 Appeal Procedures . . . . . 102 General Requirements to Reduce Defaults . . . . . 105 SECTION 11: ADDITIONAL SCHOOL REQUIREMENTS . . . 109 Refunds . . . . . 109 Exchange of Information Requirements . . . . . 110 Recordkeeping, Audits, and Reports . . . . . 111 Audit Requirements . . . . . 113 Program Participation Agreement Requirements . . . . . 114 Prohibited School and Lender Activity . . . . . 115 APPENDIX: GUARANTY AGENCY DIRECTORY . . . . . 117 |
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