Transcript Federal Perkins Loan Assignment Guide

Federal Perkins Loan
Assignment Guide
►
Loan Assignment Regulations

Sec. 674.50 Assignment of defaulted loans to
the United States.
(a) An institution may submit a defaulted loan note to the
Secretary for assignment to the United States.

DCL-CB-03-13, July 2003
►
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Found on IFAP website. www.ifap.ed.gov
Assignment submissions mailed between June
21 & June 30 must have a postdated
certification date of July 1.
► How
to Assign
 Identify the accounts to be assigned.
►Age
Trial Balance Report
►Balance of $25.00 or higher
►Accelerated or naturally matured
►Minimum two collection efforts
 Review files for required documents.
►Promissory
note or certified copy
►Judgment or bankruptcy documents
►Social Security number
 Complete Federal Perkins Assignment Form.
►Can
order assignment form on UAS System
►75% completed
►3 copies of Assignment form
►2 copies of Account History
“Package” together assignment documents
and submit.
► Submission
Documents Checklist
 Required Documents
►Submission
Package Manifest (R)
►ED Assignment Form Original (R)
 Expiration date 6/30/06
 CB-03-12 Form and Directions
►Two
photocopies of Assignment Form (R)
 One to submit, and one for your records
 Required Documents Continued…
►The
Original Promissory Note(s) (R)
►Judgment Information (R)
 Transfer of judgment if applicable
►Bankruptcy
Information (R)
►Due Diligence Documentation (R)

Optional Documents
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Signed Repayment Schedule (O)
Complete Repayment History (O)
Acceleration Notice (O)
Documentation of Recall (O)
Copies of Cancellation & Deferment Forms (O)
Any of the optional items NOT included in the submission package must
be retained by the institution for at least 3 years from the date the
loan is assigned.
► Submission
Documents Detailed…
 Submission Package Manifest
►Manifest
(list) on institutional letterhead that includes
information on the loan.
►Under type of loan you must list either;
 E (Defense)
Borrower’s Name & SS#
Adams, Samuel 999-99-9999
Ross, Betsy
999-99-1776
I (Direct)
Type of Loan Interest Rate
E
P
.03000
.05000
P (Federal Perkins)
Total Amount Outstanding
(Section D, #37)
1515.15
2000.00
 Assignment Form
►The
approved Department of Education Assignment
Form must be used bearing the appropriate
expiration date.
►Original signatures are preferred; however, a
signature stamp may be used in the case of large
submissions
►A response should be provided to all items on the
Assignment Form.
 Two Copies of the Assignment Form
►Submit
one copy with original
►Retain on copy for the borrower’s file.
 Original Promissory Note
►All
P-notes submitted for assignment must be valid
legal instruments
►All P-notes should contain; signatures, amounts, and
dates of disbursements.
►If original P-note is no longer available and only a
certified photocopy exits, the copy can be submitted.
 Include a statement signed by the appropriate official.
“Certified True Copy”
I declare under penalty of perjury that the
foregoing is a true and correct copy of the
original promissory note:
Signature________________
Title ____________________
Date ____________________
►If
neither the original nor a photocopy is available,
the loan may still be assigned. IF the institution has
copies of signed checks, disbursement vouchers or
history.
 Judgment Information
►The
Department does not accept assignment of loans
for which the institution has obtained a judgment
unless it transfers the judgment to the United States.
“All rights, title, and interest of the undersigned in this judgment are
hereby assigned to the United States of America.”
►Some
states require the institution to notify the
courts that rendered the judgment of the
assignment.
►Any
judgment that is included in the assignment
must cite it’s interest rate and expiration date.
►If not on judgment, your institution’s attorney or
authorized official assigning the loan must provide
the information in a separate signed statement.
►If judgment has expired, consult your attorney about
renewal of the judgment.
 Bankruptcy Information
►If
a bankruptcy petition has been filed and a ruling
has not been made, the account cannot be submitted
for assignment.
►If the courts rule in favor of the borrower and
discharge the loan, the account should be canceled.
►If the courts rule against the borrower, the loan is
eligible for assignment.
 Complete Due Diligence History
►If
the institution’s cohort default rate was less than
20% as of the June 30 of the second year preceding
the year in which the assignment submission is made
you are not required to submit documentation of due
diligence.
For example June 2004 for a June 2006
submission.
► Institutions
must provide the following documented proof of
due diligence
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Grace ending letters
Past due notices
90-day telephone call attempt
Skip tracing attempts
Intent to accelerate
Account acceleration and notice to the borrower
Credit Bureau reporting
Collection agency placement
Litigation Documentation (if applicable)
► Mailing
Directions
 All accounts submitted for assignment are to be mailed
to:
U.S. Department of Education
Perkins Loan (NDSL) Assignment Processing Center
P.O. Box 4136
Greenville, Texas 75403-4136
Do not contact this address in writing of by telephone to
inquire about the status of assignments or to clarify why
assignments were rejected.
► Assignment
Processing
 The accounts are reviewed individually.
 If all requirements are meet, the institution will
receive documentation
►Report
NCLM710B
►Notices are sent to the institutions address provided
in the institution’s program participation agreement
Cure Process for Assigning Defaulted
Loans

Cure process for Defaulted Loans
1. The institution must locate the borrower
Proven by: postal receipt by the borrower
► Documentation of conversation that includes
borrower’s current address
► Documentation from address-search servicer (nonIRS) that includes the borrower’s current address.
►
If the institution cannot locate the borrower, evidence of address
search attempts will suffice.
2. The institution must send the borrower a
letter informing the borrower of the loan’s
defaulted status which must be resolved.
3. The institution must send the borrower a copy
of the signed promissory note along with a
new repayment schedule to be signed and
returned.
4. If there is no response to these letters, the
institution must initiate collection procedures,
including overdue notices, account
acceleration, collection agency referral, creditbureau notification, litigation (if applicable),
and recall
5. The institution must provide documentation
that steps 1 through 4 have been completed.
The institution must label this “Due Diligence
Using Cure Process”
6. The institution must label each completed
Perkins Assignment Form “Cure Process
Submission” in large print on top of the form.
► Resubmission
Procedures
 Corrections can be made directly on the
returned Perkins Assignment Form, on a
computer generated facsimile or a photocopy of
the Assignment Form.
 Corrections should be done using blue or black
ink. NEVER USE RED!
 Each change must have the initials of the
person making the change.
 Corrections must be clear and legible.
 The institution may prepare a new form is they
wish.
►If
so, the institution must resubmit the old
Assignment Form with the new.
 If resubmitted more than 45 days after it is
returned to the school, the certification date
and interest due must be changed
 If account is rejected due to a problem with any
of the dates on the Form, the institution must
ensure that all correlating dates are correct
before resubmission
►i.e.
Item #21 “date last grace period ended” make
sure that item #22 “date of default” is still correct.
 Resubmission must be clearly written on the
envelope.
 An assignment package manifest must be
included with each resubmission package.
 The “corrections worksheet” that accompanies
every rejected assignment must be enclosed
with each resubmission.
► Notification
of Borrowers
 If the institution chooses to notify the borrower
of the pending assignment to the Department it
must take place 90 days prior to assignment.
► Payments
from Assigned Borrowers
 Payments should be forwarded to:
National Payment Center
P.O. Box 4169-Perkins Loan (NDSL)
Greenville, Texas 75403-4169
 Each payment must include borrower’s full
name, SS#, and type of loan.
► Information
Sources
 Questions on assignment process , status of
submissions, or pertaining to the correction of rejected
submissions:
Federal Student Aid
U.S. Department of Education
Borrower Services, Collections Group
Perkins Loan Assignments
830 First Street, N.E.
Washington, D.C. 20202-5320
202-377-3373
 All inquiries must include institution’s Serial #
► General
Instructions
Complete form in black ink.
Sign forms in blue ink – (the original and copy)
All items on Assignment Form must be completed. N/A
All financial information must be entered as dollars and
cents. $3000.00 or $303.57
 All items requiring dates must be entered as mm/dd/yy.
01/01/03
 Each borrower must have a Social Security #.
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Section A- Institutional Information
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#1 – Full name of submitting institution.
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#2 – Serial Number
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If a branch campus, identify as such.
4-digit campus based serial number. Found on
institution’s campus based award letter.
#3 - #6 – Full address of institution
► Section
B - Certification
 #7 – #11 - Name of authorized official making
the assignment, alternate contact, phone # and
signature.
 #13 – Date of transferred assets
►Date
of which the authorized official signs the
Perkins Assignment Form. Shown as MM/DD/YYYY.
►Submissions that are mailed between June 21 and
June 30 must bear a postdated certification date of
the following July 1.
► Section
A – Borrower Information
 #3 – Social Security #
►This
is a mandatory field. A school ID number is not
acceptable.
 #5 – Departure Date
►The
date the borrower left your institution.
“Separation Date”
► Section
B- Cosigner Information
 #12 Social Security # of the cosigner
►Not
required, however if one has been identified,
please provide it.
► Section
C – Loan Info: Historical
 #18 – Type of loan disbursed
 #19 – Interest rate on P-note.
► Or
changed rate due to litigation and presence of a judgment.
 #20 – Date of last disbursement
► Not
the original date of the loan. The date the last advance was
prior to the departure date.
 #21 – Date of last grace period.
► Must
show full 9 or 6 month grace period began after the
departure date.
 #22 Date of Default
►Date
following the day on which the payment was
due and not received.
 #26 – Reason for assignment
►Hardship,
incarcerated, unemployed, liquidation,
refusal to pay, address unknown, total and perm
disability, other (please explain)
► Section
D – Loan Info: Financial
 #27 – Original Amount borrowed
►This
total should be what is reflected on the P-note
or judgment.
 #28 – Amounts refunded
►Any
amount refunded or never disbursed that
reduced the principal amount the borrower is
responsible.
► Section
E – Cancellation Information
 #38 - #43 – Any cancellations that have been
processed on the loan
►The
institution is not required to provide the
information.
QUESTIONS?