What does ASA do when it is notified that a lender is withdrawing from FFELP?

Once ASA is notified that a lender has withdrawn from FFELP, ASA will work in partnership with the lender to ensure the following:

• – Schools are notified and provided relevant details
• – Schools receive the necessary reports and information to assist with borrower and lender transition
• – School and lender profiles are updated to prevent new loan processing with that lender

Will ASA contact schools if a lender withdraws from FFELP?

Some lenders may initially prefer to contact schools directly. However, client managers will contact schools individually if one of the school's lenders withdraws from the program to determine an appropriate plan of follow up activities.

What should I do if one of my lenders withdraws from FFELP?

There are a few things that schools will need to consider if one of their lenders withdraws from FFELP:

• – If a lender will not be funding pending disbursements, borrowers will need to complete a new MPN and schools will need to certify a new loan as soon as possible. ASA can provide you with a list of borrowers who may be in this situation.
• – If a lender will not be making new loans, borrowers will need to complete a new MPN. ASA can provide you with a list of borrowers who may be in this situation.
• – ASA can assist schools with the appropriate verbal or written communications for either situation.
• – Lastly, any print or web materials should be revised to reflect that the lender is no longer participating in FFELP.

What if one of the school’s three unaffiliated lenders withdraws from FFELP and I cannot find another lender to replace it?

ED indicated that if a school were to temporarily drop below the three lender minimum due to circumstances beyond its control, then consideration would be taken when determining compliance with regulations until at least July 1, 2009.

For those schools that are unable to find at least 3 lenders to make loans to their borrowers, schools may provide a comprehensive list of all the lenders that have indicated that they would make loans to borrowers at the school or have made loans to borrowers at the school over the past three to 5 years. However, the school must:

• – Reinforce that the list does not represent an endorsement of particular lenders
• – Not provide any additional information about the lender, including the percentage of the school’s loans made by the lender
• – Emphasize that the choice of lender belongs to the borrower

The Dear Colleague Letter can be reviewed at the link below:
http://www.ifap.ed.gov/dpcletters/GEN0806.html

Can ASA provide me with reports with loans that may need to be re-certified with a new lender?

Yes, there are a few standard reports that ASA can provide:

• – Pending SCRs
• – Pending Disbursements
• – Borrowers with Pre-Approved Credit
• – Borrowers who may need a new MPN

ASA can also run ad hoc reports if schools need information not provided in these standard reports.

Also, please contact ASA if you utilize CL4 Response files in your FAMS, you may be able to identify borrowers as well. We will send M responses when disbursements are canceled.

Will ASA contact borrowers if pending loans need to be canceled?

ASA will take initial direction from the lender regarding pending disbursements and the borrower and school communication plan.

Does ASA advise borrowers on which lender to borrow through if their previous lender withdraws from FFELP?

In order to reinforce borrower choice, ASA will not recommend lenders to borrowers, but will let borrowers be aware of the school’s Preferred Lender List with ASA, if there is one. ASA will refer borrowers to their school if they need assistance choosing a lender.

What will borrowers see on ASA Direct^® if their lender has withdrawn from FFELP?

The lender will not be listed on ASA Direct^® during lender selection and repeat borrowers will be asked to select a new lender.

When a borrower attempts to complete a MPN with a lender that has chosen not to lend to certain schools, what will the borrower see on ASA Direct^®?

The borrower will only see school eligible and FFELP approved lenders on the lender dropdown list.

I’m trying to reinstate a loan on ASA Direct^® for a borrower and am unable to.

Please check to make sure that the lender code is still valid. Schools should not attempt to reinstate loans with invalid lender codes. Please contact ASA if you have any questions about whether or not a loan can be reinstated.

What will happen if I certify a loan via CommonLine4 with a lender that has withdrawn from FFELP?

The loan will be put into a Rejected status and the school will need to certify a new loan with a valid lender code.

What will happen if I certify a loan via CommonLine4 with a blank lender code and a borrower has a MPN on file with a lender that has withdrawn from FFELP?

The loan will be put into incomplete status until borrower selects a lender; the borrower will receive a MPN or e-sign letter and will then select a new lender.