Federal Updates

Two more volumes of the 2009-10 Federal Student Aid Handbook now online

ED has released "Volume 4: Processing Aid and Managing Federal Student Aid Funds" and "Volume 5: Overawards, Overpayments, & Withdrawal Calculations" of the 2009-10 Federal Student Aid Handbook (FSA Handbook).

New to both volumes are details on two methods of returning funds on FFELP loans purchased by ED through various programs established by the Ensuring Continued Access to Student Loans Act (ECASLA) and/or returning funds on Direct loans (pages 4-42, 5-23, and 5-132 of the FSA Handbook).

When a FFELP loan is purchased through an ECASLA program, ED becomes the loan holder and servicer. Both ED and the previous loan holder notify the borrower of the change.

• The recommended method of returning funds on such loans is through the lender that originated the loan. Many offer an online service to schools for returning funds. The lender then forwards the payments to the appropriate ED servicer — ACS, Great Lakes, Nelnet, PHEAA, or Sallie Mae.
• Alternatively, a school may return funds directly to the appropriate servicer, which is indicated in the "Servicer" field in NSLDS' loan history.
• ED servicers' contact information is also included and intended to be used by schools only.

Other items to note in Volume 4 include:

Chapter 1 — Disbursing Federal Student Aid Funds

• A new section on TEACH Grant notification and cancellation begins on page 4-5.
• Pass-through charges for institutionally provided housing is clarified on page 4-10.
• When a student comes to pick up a credit balance within the 14-day timeframe, he or she must be able to leave with the funds in some form (e.g., a check, cash or an appropriate stored value card). The student should not be told that a check will be mailed to him or her (page 4-15).

Chapter 2 — Requesting and Managing FSA Funds

• ED will no longer provide funds via the Just-in-Time payment method since enhancements to the COD systems and G5 have resulted in a 24-hour turnaround from the time a school submits disbursement records to the time funds are available for drawdown (page 4-28).
• A new section on returning funds after 240 days begins on page 4-41.

Volume 5 includes two chapters and six case studies. Although no major changes were made to the case studies, there are some important revisions to note in Chapters 1 and 2.

Chapter 1 — Overpayments and Overawards

• A new section on TEACH Grant overpayments begins on page 5-6.
• To explain the processes for returning overpayments to ED, certain sections appear in both Chapter 1 and Chapter 2 (beginning on pages 5-17 and 5-110, respectively):
  • Recording student payments and reductions in the Pell Grant, ACG, National SMART Grant, and TEACH Grant Programs;
  • Accepting payments on referred overpayments;
  • Referring overpayments to Debt Resolution Services;
  • School responsibility after referral;
  • Responsibilities of Debt Resolution Services;
  • Return of Title IV funds when a school does not maintain a separate federal bank account; and
  • Accepting payments on referred overpayments.

Chapter 2 — Withdrawals and the Return of Title IV Funds

• In this chapter, the FSA Handbook clarifies that only excused absences that are followed by some class attendance may count as days in attendance (page 5-77).
• On page 5-83, schools are reminded that institutionally scheduled breaks of at least five consecutive days between courses/modules in the same payment period or period of enrollment must be excluded from a return calculation.

In total, five volumes of the latest FSA Handbook have been released, including:

• The Application and Verification Guide
• Volume 1: Student Eligibility
• Volume 2: School Eligibility and Operations
• Volume 4: Processing Aid and Managing Federal Student Aid Funds
• Volume 5: Overawards, Overpayments, & Withdrawal Calculations

The current volumes are available on TG Online at www.tgslc.org/resources/fsa_handbook.cfm. Remaining volumes will be posted as they are released. Once all the volumes of the 2009-10 FSA Handbook have been released, TG will provide a single downloadable file encompassing all of the volumes. Watch future editions of Shoptalk Online for details.

Volume 4 is also available on the Information for Financial Aid Professionals (IFAP) Web site at http://ifap.ed.gov/fsahandbook/0910FSAHBKVol4.html; Volume 5 is available at http://ifap.ed.gov/fsahandbook/0910FSAHBKVol5.html.

For more information
For questions about processing aid, managing funds, overawards, overpayments, and withdrawal calculations, contact TG customer assistance at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.

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New supplemental claim filing documentation

Effective October 1, 2009, TG claims must begin collecting new supplemental claim filing documentation for claims involving Total/Permanent Disability (TPD), Ineligible Borrowers, or Identity Theft discharge. The new forms outlined below are required for all pertinent claim types submitted on or after October 1.

The FFELP Ineligible Borrower and Identity Theft Supplemental Form must accompany the Claim Form for all 'IN' and 'ID' claims and is used by a lender or servicer to support and provide additional information necessary to request claim reimbursement for an Ineligible Borrower or Identity Theft claim. For 'IN' claims, it provides any evidence of a fraud conviction as may be associated with the borrower's ineligibility. For 'ID' claims, it provides demographic information concerning the perpetrator of the crime of identity theft.

The FFELP Assignment Support Supplemental Form is a Microsoft^® Excel^® workbook. This form must be completed per the instructions on the 'TPD-specific' worksheet and must accompany the Claim Form for all 'DI' claims. It is used to facilitate the exchange of loan-level information between guarantors and lenders prior to assignment of the loan to ED. This form should be used in conjunction with the Claim Form when submitting a Total and Permanent Disability claim.

More information
For questions concerning either of these new documentation requirements, please contact TG's assistant vice president of claims Ron Stroud at (800) 252-9743, or send an e-mail message to ron.stroud@tgslc.org.

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NSLDS issues data integrity reminder

The National Student Loan Data System (NSLDS) recently issued guidance to remind lenders and servicers that the Date Entered Repayment (DER) reported on a loan should not be modified as the result of additional activity on the loan, such as deferment, forbearance, rehabilitation, or repurchase. Once a loan enters initial repayment, the DER should not be changed, except to correct an error. A loan that is repurchased or rehabilitated must still carry the original DER that was on the loan prior to the default.

More information
For questions about this guidance, please contact TG's data reporting team at good.data@tgslc.org.

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