College Assist Alerts and Bulletins

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June 16, 2004 Bulletin

This bulletin contains important information about the following topic:

Filing of Proof of Claim for Bankruptcy

The Federal Regulation 34 CFR §682.402 (f)(4)(ii) that instructs lenders when to file a proof of claim with the bankruptcy court begins unless instructed otherwise by the guaranty agency.

College Assist is instructing lenders and servicers effective immediately to file a proof of claim with the bankruptcy court upon receiving a notice of first meeting of creditors or other proof of filing of bankruptcy unless otherwise instructed by College Assist. Because of a recent U.S. Supreme Court decision College Assist, as a state guaranty agency no longer has the ability to use its status to assert governmental immunity from suits in bankruptcy court and as such filing of a proof of claim will no longer have a detrimental effect on guaranty agencies. College Assist does not assign any loans affected by a bankruptcy filing to another guaranty agency.

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March 31, 2003 Bulletin

This bulletin contains important information about the following topic:

GEN-03-06:

Administrative Relief for Students and Borrowers Affected by Military Mobilizations

The Department of Education has issued updated guidance for Students and Borrowers who are military personnel who have been activated or reassigned for a period of more than 30 days as a result of a military mobilization.

http://ifap.ed.gov/dpcletters/GEN0306.html

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January 31, 2003 Bulletin

This bulletin contains important information about the following topic:

Filing of Proof of Claim for Bankruptcy

The Federal Regulation 34 CFR §682.402 (f)(4)(A)(B)(ii) that instructs lenders when to file a proof of claim with the bankruptcy court begins "unless instructed otherwise by the guaranty agency".

College Assist is instructing lenders and servicers effective immediately to NOT file a proof of claim with the bankruptcy court upon receiving a notice of first meeting of creditors or other proof of filing of bankruptcy. College Assist, as a state guaranty agency has the ability to use its status to assert governmental immunity from suits in bankruptcy court, pursuant to the Eleventh Amendment to the United States Constitution. This status allows College Assist to preserve a legal defense to any action in bankruptcy. College Assist does not assign any loans affected by a bankruptcy filing to another guaranty agency.

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March 13, 2002 Alert Vol. 02 No. 1A

Urgent! Please read immediately!

This alert contains important information about the following topic:

Change to Minimum Guarantee Amount

Effective March 13, 2002, the minimum loan amount for which College Assist will issue a guarantee will be reduced to $100.00. Previously, College Assist's minimum guarantee amount was $200.00. The minimum guarantee amount has been reduced to continue our commitment to meeting the needs of our borrowers.

Loans submitted for approval for amounts less than $100.00 will be rejected for processing. A reject code of Q will be placed on these loans with the reject reason being that the loan approval amount is less than College Assist's minimum guarantee amount.

If you have any questions, you may contact:

Susie Trujillo at Susie.Trujillo@college-assist.com
or by telephone at 1-303-305-3294

or

Lori Gloer at Lori.Gloer@college-assist.com
or by telephone at 1-303-305-3301.

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October 3, 2001 Bulletin

This Bulletin provides important information about following topics

1. Persons affected by Military Mobilization



2. Persons affected by New York City National Disaster Assistance

Due to the recent terrorist attacks the United States Department of Education has provided some guidance for students and borrowers under the Federal Family Education Loan Program. Attached to this bulletin are two Dear Colleague Letters the Department has issued regarding the recent events.

Dear Colleague...Disaster Relief (pdf format) (New York City Disaster Assistance)

Dear Colleague...Disaster Military (pdf format) (Disaster Military Mobilization)

Below is an overview together with some added information from College Assist. College Assist is also working on ways to assist borrowers who have lost jobs because of the impact of the disaster on the airlines and other industries, which rely on travel.

Military Mobilization

If any of your students are called up to active duty from the National Guard or Reserve Units or any active duty members are being reassigned to another duty station please inform them of the following information.

If the borrower has Title IV loans in an in-school, in-school deferment, or grace period status, when they are called up, the lender must maintain that status during the period of the borrower's active duty service or reassignment, plus the time necessary for the borrower to resume enrollment in the next regular enrollment period that is reasonably available to the borrower, if the borrower wishes to go back to school. The maintained loan status can not exceed a total of three years including the period of time necessary for the borrower to resume enrollment. Also, if the borrower's loan was in a grace period at the time the borrower was ordered to active duty, the period of time during which the borrower was serving on active duty is excluded and the borrower will receive their full grace period.

If the borrower has Title IV loans in repayment status (other than in-school deferment), when they are called to active duty, their loans will be placed in a forbearance for up to one year beginning on the first day of active duty. The borrower, borrower's family or another reliable source must request the forbearance. Documentation is not required, but a copy of the borrower's orders should be forwarded to the lender or servicer when possible. If the forbearance is to be extended beyond the initial one year, then supporting documentation and a written agreement with the borrower is needed.

Borrowers with loans through the Colorado Servicing Consortium, or family members can call (303) 696-5660 or 1-888-696-5660 to have the forbearance status placed on their loan(s). The Colorado Servicing Consortium will review the borrower's account to determine if other, more beneficial, options are available to the borrower.

New York City Disaster Assistance

Until it can be determined whether a borrower qualifies for a deferment or discharge because of disruptions caused by the terrorist attacks, the Colorado Servicing Consortium will grant mandatory administrative forbearance to borrowers who either reside in or, to the extent the Colorado Servicing Consortium has knowledge, work in the designated disaster area. The Colorado Servicing Consortium will conduct area code and zip code searches for persons associated with the area and apply the mandatory administrative forbearance. Mandatory administrative forbearances do not require either a request or documentation from the borrower.

The borrower will be notified that an administrative forbearance has been granted and allowed to pursue other potential program benefits that may be available to them or they may ask for resumption of normal billing and payment schedules. The forbearance will be effective September 11, 2001 through January 31, 2002.

Also, if a borrower, who does not reside or work in New York City, is affected by the terrorist actions, then the borrower, the borrower's family or another reliable source can contact the Consortium and the borrower will be granted forbearance for a period that will end no later than January 31, 2002.

If a borrower is in the process of making payments on a defaulted loan(s) to reinstate his/her eligibility for Title IV aid, College Assist will suspend the requirement of on time, consecutive monthly payments for a period up to January 31, 2002, without the borrower having to restart the 6-month time frame.

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November 15, 2000 Alert Vol. 00 No. 1A

Urgent! Please read immediately!

This alert contains important information about the following topic:

Filing of Proof of Claim for Undue Hardship Claim

The Federal Regulation 34 CFR §682.402(f)(4) which describes when to file a proof of claim with the bankruptcy court begins "unless instructed otherwise by the guaranty agency". 34 CFR §682.402(i)(1) describes guaranty agency participation in bankruptcy proceedings for undue hardship claims, stating at (iv) that the "guaranty agency may assert any defense consistent with its status under applicable law to avoid discharge of the loan."

College Assist is instructing lenders and servicers, effective November 1, 2000, to NOT file a proof of claim with the bankruptcy court when they receive an undue hardship (adversary) petition. College Assist has the ability to use its status as a state agency as a defense to oppose the discharge of the borrower's loan(s), and this ability is jeopardized when the lender files a proof of claim. The documentation required for claim payment will not include evidence of having filed the proof of claim in these cases.

The filing of a proof of claim is still required in other cases as per Federal Regulations, and the lender must always follow the instructions of the bankruptcy court.

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April 26, 2000 Bulletin from College Assist Claims Dept.

This Bulletin provides important information from the College Assist Claims Department, including changes to the Indemnification Policy:

1. Death Certificates
   
   The US Department of Education's Dear Colleague Letter, GEN-99-26, issued in November 1999, deals with the change of requirements when filing a request for claim payment due to the death of the borrower (or student for PLUS loans).
   
   College Assist wishes to provide clarification on a couple of issues:
   
   
   1. Lenders are permitted to place a single 60-day administrative forbearance on the account while attempting to obtain an original or certified copy of the death certificate. If the lender is unable to obtain this after this 60-day period, the lender resumes due diligence at the point where it was suspended.
   
   
   
   2. If the lender is unable to obtain an original or certified copy from the family, College Assist would request that you contact our Claims Department so that College Assist can attempt to obtain a certified copy.
   
   
   
   3. If the lender files a claim with a 60-day forbearance and was unsuccessful in obtaining a death certificate, and has not positively determined that the borrower is deceased, then College Assist will return the claim to the lender with authorization for an additional 60-day forbearance, while College Assist attempts to obtain a certified copy of the death certificate. This action is permitted in the Dear Colleague Letter. If College Assist has been unable to obtain a certified copy by the end of the 60-day forbearance, then College Assist will purchase the claim as requested by the lender.
   
   
   
2. Master Promissory Note claim assignments
   
   There are two specific issues that College Assist wishes to emphasize when filing a claim using a Master Promissory Note:
   
   
   1. The claim must be filed with either the original promissory note or a certified, true and correct copy.
   
   
   
   2. The loan assignment should be in the amount of the claim that is being filed, not for the entire promissory note. College Assist will accept either assignment, but prefers that the assignment be only for the amount of the claim.
      
      Questions or concerns, please call College Assist at 303-305-3000 and ask to speak with a Claims Examiner.



3. Change to the Indemnification Policy
   
   College Assist has changed its Indemnification Policy (CL-6). The change eliminated the requirement for a paper copy of the "Notification of Loan Approval and Guarantee"; instead a lender is required to provide "Documentation which demonstrates that the loan was guaranteed". This demonstration is best made with a "Notification of Loan Approval and Guarantee"; however, since this is not always provided in a paper format the policy has been changed.

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