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ED Implements New Special Allowance Codes
Due to a recent amendment to the Higher Education Act of 1965, the calculation of special allowance (SAP) for loans first disbursed on or after January 1, 2000, is based on the three-month commercial paper rate. In December 1999, to accommodate this change, the Department of Education (ED) announced that lenders must use new SAP codes on ED Form 799 starting the quarter ending March 2000.
However, in February 2000, ED announced that its system is not ready to receive the new SAP codes. Therefore, activity covered by the new codes for the March 2000 quarter should be reported as prior quarter adjustments.
The lending community addressed the ramifications of the February change in guidance with ED. On March 10, 2000, ED responded to the lending community's concerns by rescinding its February guidance. The March 2000 guidance states that the new SAP codes (CA, CB, CC and CD) for new loans first disbursed on or after January 1, 2000 will be accepted for the reporting period ending March 31, 2000.
Questions
If you have questions concerning special allowance reporting, contact the Department of Education Lender Reporting Team at (202) 708-9976 or send an message to osfa_lr@ed.gov.
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