FFELP Origination Deadlines for Lenders

American Student Assistance® (ASA) would like to assist our clients and borrowers in making a smooth transition to the Direct Loan program. We are therefore providing you with a schedule for the wind-down of Federal Family Education Loan Program (FFELP)-related services.

New Guarantee Requests

Effective with the close of business on Wednesday, June 23, 2010, ASA® will no longer accept new guarantee requests. This applies to all loan types whether they are ASA originated or lender originated, including Consolidation loans.  

For new loan applications where ASA is the originator, the loan must be in a ready-to-disburse status by the close of business on Wednesday, June 23, 2010, and have a first disbursement issued on or before Friday, June 25, 2010. The loan must be fully disbursed on or before Thursday, September 30, 2010.  

A loan is ready to disburse when ASA has received and processed all of the following: 

  • A complete loan certification 
  • A complete and valid original master promissory note 
  • A credit approval (for PLUS).  

Additionally, the loan must be eligible for guaranty. Applications that do not meet all criteria will be canceled to ensure compliance with the new legislation. 

Additional Deadlines

Reissues and first disbursement reinstatements must be received, accepted, and processed by the close of business Wednesday, June 23, 2010.

Reallocations will continue to be processed after Friday, June 25, 2010; unless the reallocation results in an increase in the total amount of the combined loans or results in a new loan being created.

Cancellations/refunds will continue to be processed after Friday, June 25, 2010, in the same manner they are today.

File Processing

File processing will be adjusted as follows:

  • CL4 App/Send processing will cease at the close of business June 23, 2010.
  • CAM processing will continue as is.
  • Outbound transmissions such as disbursement rosters and modification records will continue as needed.

Working With ASA

Many of our lending partners have already implemented specific restrictions related to the timing of various disbursement functions. ASA will honor the lender’s cutoff dates wherever they are earlier than ASA’s cutoff dates.

We are committed to working very closely with all of our partners to make this transition as smooth as possible.  If you should have questions or concerns regarding the details of this announcement, please do not hesitate to contact your client manager.

 

Frequently Asked Questions


My organization is not located in the Eastern time zone. Can I submit a file to ASA at any time on Wednesday, June 23, 2010?

No, new loans must be received and guaranteed by 6:00 p.m. ET. Any guarantee request received after that time will not be processed and no response file sent.

 

What if I have loans in a rejected status that aren’t resolved by 6:00 p.m. ET on June 23, 2010?

If the reject reasons have not been resolved and the loan has not been brought to guarantee by 6:00 p.m. ET on Wednesday, June 23, the loan will be cancelled and not processed.

 

In the blanket program, we are allowed to request guarantee 10 days after first disbursement. Will this still be true?

No, ASA recently issued guidance on the termination of the blanket process, and all requests for blanket guarantees must be received and processed on the ASA system on or before June 23, 2010. If ASA does not have the loan on its system by 6:00 p.m. ET on June 23, 2010, the loan will not be guaranteed. It is strongly recommended that lenders immediately initiate the transmission of guarantee request for any loans that are showing as guaranteed on their system but have not yet been disbursed and/or sent to ASA for guarantee. Additionally, ASA recommends lenders terminate the blanket process prior to the June 23 deadline to allow for more efficient reconciliation.

 

Are loan increases allowed after June 23?

Yes. If your lending organization is allowing increases and the loan is first disbursed prior to June 23, it will be permitted here at ASA as long as it is performed according to the following dates:

  • ASA originated and disbursed loans deadline: September 28, 2010
  • Lender originated and disbursed loans deadline: September 30, 2010
 

On loans where we as a lender originate and disburse—if a balance/disbursement discrepancy is discovered after the September 30 deadline, how will this be addressed?

ASA will review all of the information related to the request and make any necessary adjustments to the disbursements and/or amount of the loan as documented by the lender.

 

For loans that ASA originates and disburses, are reinstatements allowed?

Yes. Any first disbursement reinstatement must take place on or prior to June 23. Any subsequent disbursement can be reinstated as long as it is done prior to the September 28 or 30 deadline (final disbursement date for all loans; see the loan increase question above).

 

We as a lender have June 30 as a deadline for processing new FFELP loans. Can I still process ASA-guaranteed loans up until that date?

No. The organization that has the earlier deadline(s) takes precedence. In this case, ASA’s deadline of June 23 would apply.

 

How is ASA acting based on recent guidance from the U.S. Department of Education stating that in the case of a bankruptcy filing where the original or rescheduled first disbursement was made prior to July 1, 2010, subsequent disbursements do not have to be cancelled?

In these cases of bankruptcy, the lender should contact their ASA client manager immediately to discuss resolution. We encourage our partners to cancel any pending disbursements if possible. However, we understand each situation is unique and should be addressed accordingly. ASA’s goal is to work with all related parties to ensure the borrower is not negatively impacted.

 

We as a lender requested guarantee on several loans that were not disbursed by us (lender) prior to July 1, 2010. How and when would you like to be notified of this?

We ask that you notify your client manager of loans affected so that we may cancel them immediately.

 

What support can I expect from ASA during this time?

Your client manager along with our School Management team and ASA’s call center will be monitoring all current and incoming loan activity and will notify the schools directly should a loan not meet ASA’s origination parameters.