UHEAA Bulletin Vol. 2003 Issue 23

May 9, 2003
Volume 2003 - Issue 22

Common Manual Interim Policy Updates

The Common Manual Governing Board recently approved several policies that modify the Common Manual. These changes will be incorporated into the Common Manual when the next annual update is published in July 2003.

This is the second of two Bulletins announcing interim updates to the Common Manual which address policy revisions approved on April 17, 2003. Pay particular attention to the effective dates for these interim policy updates.

The Integrated Common Manual, which is the online version of your paper Common Manual, includes these updates. The Integrated Common Manual is available at www.uheaa.org under the links News for Financial Aid Administrators or Links to Financial Aid Sites.

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 mjohnson@utahsbr.edu.

Attachment

Common Manual Interim Policy Updates
Policy Changes Approved April 17, 2003

The nation's guarantors provide the following summaries to inform schools, lenders, and servicers of the latest Common Manual policy changes. These changes will appear in the manual's next annual update in 2003. These changes will also be incorporated into the April 2003 Integrated Common Manual. The Integrated Common Manual is available on NCHELP's website at www.NCHELP.org in the e-library, and it is also available on several guarantor websites. However, some of these changes are effective before the next update is scheduled to be delivered.

PLUS Application and Master Promissory Note
The following changes were made to the Common Manual as a result of Dear Colleague Letter GEN-03-03:

Recordkeeping requirements for loans made using the PLUS Application and Master Promissory Note (PLUS MPN) have been updated for schools and lenders.

Records that a lender must maintain include:

Documentation of the process under which either the school or lender obtains the parent borrower's requested loan amount for loans made under the PLUS MPN.
A record of the parent borrower's requested loan amount for loans made under the PLUS MPN, if the lender is the party responsible for obtaining this information.
A record of any adjustments that the lender receives to the parent borrower's requested loan amount.

Records that a school must maintain include:

Documentation of the process under which either the school or lender obtains the parent borrower's requested loan amount for loans made under the PLUS MPN.
A record of the parent borrower's requested loan amount for loans made under a PLUS MPN, if the school is the party responsible for obtaining this information.
A record of any adjustments that the school receives to the parent borrower's requested loan amount.

A parent borrower must complete a new PLUS MPN if any of the following occur:

The dependent student transfers to a school that is not eligible to, or chooses not to, participate in the multi-year feature of the PLUS MPN.
The parent borrowed with an endorser.
The new school or lender requires the borrower to complete a new PLUS MPN.
The borrower chooses a new lender.
The PLUS MPN is no longer valid.

Lenders must ensure that a process is in place to obtain the parent borrower's requested loan amount before each loan is disbursed under a PLUS MPN. Procedures for obtaining the requested loan amount from the parent borrower when using a PLUS MPN has been added to the list of key items that may be included in guarantor on-site school and lender reviews.

Affected Sections:	3.4.A, 4.10, 6.1.A, 6.5, 11.3.B
Effective Date:	The PLUS Application and Master Promissory Note (PLUS MPN) may be used for PLUS loans certified by the school for loan periods beginning on or after July 1, 2003. The PLUS MPN must be used for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.
Basis:	Dear Colleague Letter GEN-03-03

Expansion of the Multi-Year Feature of the Stafford MPN and Origination of PLUS Loans Using the PLUS Application and Master Promissory Note (PLUS MPN)
The Common Manual has been updated to incorporate information regarding the eligibility of all schools located in the United States, unless notified otherwise by the Department, to use the multi-year feature of the Stafford Master Promissory Note (Stafford MPN) and the PLUS Application and Master Promissory Note (PLUS MPN). The PLUS MPN may be used to obtain one or more PLUS loans for a dependent student. A parent borrower must complete a separate PLUS MPN for each dependent student for whom he or she wishes to borrow. Before a PLUS loan may be disbursed, the parent borrower must indicate to either the school or the lender the PLUS loan amount that he or she wishes to borrow (the requested loan amount). The student is not required to complete or sign the PLUS MPN.

If the lender determines that the parent has an adverse credit history and an endorser is used, a separate Endorser Addendum is required for each PLUS loan. In any case where an endorser is required, a new PLUS MPN is required for each loan. Any increase in the requested loan amount by the parent borrower must be approved by the endorser and requires a new PLUS MPN and Endorser Addendum.

Affected Sections: 2.2.A, 5.1, 5.1.B, 6.1.C

Effective Date: For loans made using a Stafford Master Promissory Note (Stafford MPN), loans certified by the school on or after March 1, 2003, regardless of loan period.
The PLUS Application and Master Promissory Note (PLUS MPN) may be used for PLUS loans certified by the school for loan periods beginning on or after July 1, 2003. The PLUS MPN must be used for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.

Basis: Dear Colleague Letters GEN-02-10 and GEN-03-03

Payment Period
The Common Manual has been revised to reflect changes in regulation regarding payment periods for credit-hour programs. The payment period for an eligible credit-hour program that offers academic terms (standard or nonstandard) is simply the academic term. The definition of payment period for a credit-hour program that does not have academic terms is amended by stating that the first payment period is the period of time when the student completes half the number of credit hours and half the number of weeks in the program. The definition of payment period for clock-hour programs is moved to a new section as it no longer mirrors the non-term-based credit-hour program definition. Also, the paragraph that explains determining the number of payment periods is moved so it is clear it applies to both non-term-based credit-hour programs and clock-hour programs.

Affected Sections: 5.8.D

Effective Date: Payment periods established by the school on or after July 1, 2003, unless implemented earlier by the school. Schools may implement these provisions no earlier than November 1, 2002.

Basis: §668.4(a)-(c).

Lender MPN Loan Origination
The Common Manual has been updated to incorporate information regarding the expiration of the ability of a lender to make new loans under a Master Promissory Note (MPN). In addition to the current revocation guidance, a lender may elect not to make subsequent loans under an existing MPN. The lender's decision may be based on any number of circumstances-for instance, if there is a change in the borrower's circumstances (such as bankruptcy or delinquency), or because the loan is being requested under a Lender of Last Resort Program.

Affected Sections: 6.1.A, 6.2.I

Effective Date: Exercise of a lender's option to discontinue making loans under an existing Stafford Master Promissory Note (Stafford MPN) on or after July 1, 1999.
The PLUS Loan Application and Master Promissory Note (PLUS MPN) may be used for PLUS loans certified by the school for loan periods beginning on or after July 1, 2003. The PLUS MPN must be used for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.

Basis: Dear Colleague Letter (DCL) GEN-98-25; DCL GEN-03-03.

Definition of Master Promissory Note
The definition of "Master Promissory Note (MPN)" has been revised to provide a succinct definition of an MPN. The definition has been further revised by changing "period of enrollment" to "academic year." The revised definition now reads:

Master Promissory Note: (MPN) A promissory note under which the borrower may receive loans for either a single academic year or multiple academic years. See section 5.1. The MPN forms, developed by FFELP participants and approved by the Department, are the Stafford Master Promissory Note (Stafford MPN) and the PLUS Application and Master Promissory Note (PLUS MPN).

Affected Sections: Appendix G

Effective Date: Disbursements made from a Stafford Master Promissory Note (Stafford MPN) on or after July 1, 2001, unless implemented earlier by the guarantor, and disbursements made from a PLUS Application and Master Promissory Note (PLUS MPN) on or after July 1, 2003.

Basis: Federal Register dated June 29, 2001.

Replacement Pages (.pdf)

Integrated Common Manual

Affected Sections:	2.2.A, 5.1, 5.1.B, 6.1.C
Effective Date:	For loans made using a Stafford Master Promissory Note (Stafford MPN), loans certified by the school on or after March 1, 2003, regardless of loan period. The PLUS Application and Master Promissory Note (PLUS MPN) may be used for PLUS loans certified by the school for loan periods beginning on or after July 1, 2003. The PLUS MPN must be used for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.
Basis:	Dear Colleague Letters GEN-02-10 and GEN-03-03

Affected Sections:	5.8.D
Effective Date:	Payment periods established by the school on or after July 1, 2003, unless implemented earlier by the school. Schools may implement these provisions no earlier than November 1, 2002.
Basis:	§668.4(a)-(c).

Affected Sections:	6.1.A, 6.2.I
Effective Date:	Exercise of a lender's option to discontinue making loans under an existing Stafford Master Promissory Note (Stafford MPN) on or after July 1, 1999. The PLUS Loan Application and Master Promissory Note (PLUS MPN) may be used for PLUS loans certified by the school for loan periods beginning on or after July 1, 2003. The PLUS MPN must be used for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.
Basis:	Dear Colleague Letter (DCL) GEN-98-25; DCL GEN-03-03.

Affected Sections:	Appendix G
Effective Date:	Disbursements made from a Stafford Master Promissory Note (Stafford MPN) on or after July 1, 2001, unless implemented earlier by the guarantor, and disbursements made from a PLUS Application and Master Promissory Note (PLUS MPN) on or after July 1, 2003.
Basis:	Federal Register dated June 29, 2001.