MGA Home December 2009
The Michigan Guaranty Agency wishes everyone in the financial aid community a safe and happy
holiday season. Follow this link to enjoy an electronic holiday greeting.
FEATURED FINANCIAL AID PROFESSIONAL
When Sandra Turnquist came to Suomi College (now Finlandia University) in the early nineties to
pursue a major in Business Administration and Travel Services she could not have imagined that
she would end up as the college’s Director of Financial Aid. Sandra was introduced to the
financial aid industry as a work-study student in the admissions/financial aid office, and upon
graduation in 1994 she was offered a position in the Student Accounts Department. Sandra
worked in a variety of positions within Student Financial Services and in 2003 was offered the
position of Director of Financial Aid.
Sandra loves the student interaction and stresses that the most rewarding part of her position is
seeing those students walk across the stage at graduation knowing that she was part of their
success. She values the people she works with and says that her colleagues have had a positive
impact in her job.
The financial aid office annually provides a survey to their enrolled students to evaluate student
satisfaction with the services provided, and Sandra is pleased that the outcome of that survey has
consistently shown strong satisfaction. But perhaps more telling than the survey results is the
fact that many students still keep in touch with the office via letters, cards, and emails even after
they have graduated. Sandra believes that Finlandia University values an ongoing relationship
with its alums, and she always enjoys hearing from past students whether they have a question
about further financial aid or when they just touch base with an update about how they are doing.
Being a small college, Finlandia University and the students who attend really do seem like
family. Sandra sees the smaller college environment as an advantage for the students they serve
in the Financial Aid Office. “We find funding for our students even once classes have started,”
she says. “The joy of being a small university is that we are able to take those extra special steps
for our students at Finlandia University.”
Sandra is proud of the individualized attention students receive at Finlandia University in general,
and in the Financial Aid Office in particular. It is that special treatment given to each student that
serves to foster the sense of community for its students and staff. Sandra said that from the time
the student steps foot on campus they are being taught. From the admissions process through
graduation, students are being educated about the investment they are making in their future.
Staff interacts with each individual student, teaching them about the process of financial aid and
ensuring that each student is comfortable with their role in that process. And the relationship that
begins when the student first walks through the door continues throughout their entire college
Sandra is also very proud of the initiative that began in 2008-2009 which offers free tuition to
graduates of Hancock Central High School. In a deal with the Hancock Public Schools,
graduates who qualify for admission to Finlandia get free tuition in exchange for a classroom
building and sports field the school district no longer needed. The free tuition is scheduled to
continue for at least the next 11 years and is providing an amazing opportunity for many local
students who would otherwise not be able to realize their dreams of a college education. Sandra
states, “This is a very exciting time for the Finlandia community and for the off-campus
community. The first year has been very successful, and we look forward to offering this free
tuition for more years to come!”
Given the opportunity, Sandra said she would not have pursued a different career. She found her
passion in higher education and in providing top notch service to Finlandia’s students. “From the
day that a student steps foot on Finlandia University’s campus to the time they walk across the
stage at graduation and beyond graduation, we are their friends and are there to serve them,”
Sandra said. She can think of no other career that would have brought as much personal
Because of the many recent changes within the financial aid industry, Finlandia is now in the
process of transitioning to the Federal Direct Loan Program (FDLP) in January, although they will
also continue to offer FFELP loans for that semester. Sandra sees this transition as a necessary,
but disappointing move. She said she has thoroughly enjoyed working with the Michigan
Guaranty Agency and with the lenders in FFELP, and she worries that those “extra personal
touches” that were offered in FFELP may not be available with FDLP. But one thing is for certain,
as long as Sandra Turnquist is at Finlandia University, the students she serves will continue to be
the beneficiaries of that personal care and concern she has provided to them since she started
her career there.
MGA “INFO TEAMS”
MGA would like to remind schools that we offer the “Info Team” concept. Under this program,
staff from MGA will visit your school at a time convenient to you in order to conduct “mini-
workshops” of your choice on a variety of topics. An Info Team can be an effective alternative to
traditional workshops. An MGA Info Team will bring the training to your campus free of charge.
How it works:
You define the areas where specific information or training is needed. You then meet with an
MGA School Services representative to select a tentative date and determine the agenda for your
workshop. The representative will assemble your Info Team from agency staff, selecting the
most qualified presenters based on the topics you choose. Your training date will be confirmed
based upon the availability of all Info Team members. The Info Team will prepare training
sessions and materials, then present your customized workshop! Topics covered have included:
Academic Year Requirements for Loan Eligibility
Claims and Collections Procedures
Family Educational Rights and Privacy Act (FERPA)
Online Entrance and Exit Counseling
Rehabilitating Borrowers’ Defaulted Student Loans
Resolving Conflicting Information Related to Tax Returns
Return of Title IV Funds
Student Aid Report (SAR)/Institutional Student Information Record (ISIR) Comment
Codes and Text
Participating schools have reported that the workshops were a great experience for their staff.
Not only did they value the personalized information, they also appreciated the thoroughness of
the content and the amount of time dedicated to answering questions. We are extremely pleased
with the success of this initiative, and encourage you to take advantage of this service. For
more information or to schedule an appointment, please contact the School Services Unit at
1-800-642-5626, extension 36074, or via email at email@example.com.
MGA’S 2009 FALL SCHOOL WORKSHOPS
The Michigan Guaranty Agency conducted Fall School Workshops on Tuesday, November 17
at Grand Rapids Community College’s Tassell M-TEC in Grand Rapids and Wednesday,
November 18 at Schoolcraft College’s VisTaTech Center in Livonia.
The workshops were attended by 103 financial aid professionals from 47 schools. Mason Moton,
Regional Training Executive, Sallie Mae Education Resource Center, presented valuable
information on the following topics:
Technical corrections to the Higher Education Act were addressed, including clarification of the
rules for awarding federal grants to surviving relatives of those who died while performing military
duty in the wars in Iraq and Afghanistan, changes in veterans education benefits, modified rules
related to rehabilitation of defaulted loans, and the delayed implementation of the "EZ FAFSA."
Also discussed were budget reconciliation proposals to expand the Federal Pell Grant program
and restructure the Federal Perkins and Federal Family Education Loan programs.
The workshop also addressed negotiated rulemaking for loans, accreditation, discretionary
grants, and general issues, as well as the latest round of negotiations related to maintaining and
improving Title IV aid program integrity.
A summary of past legislation, regulations, and updates was presented.
Significant Increases in Veterans Benefits
Discussed were aid-related provisions of the Post-9/11 GI Bill, the new grant for qualifying non-
Pell Grant eligible students, a comparison to other educational benefit programs for military
service, the latest guidance on the transferability of benefits, and the treatment of veterans
benefits for Title IV purposes.
Federal Delivery System Update
As ED implements changes to the Higher Education Act, the evolution of the delivery system
continues. Answers to the following questions were addressed: What are the new FAFSA filing
options and how do they work? What questions have been added, deleted, changed, or moved?
What about IRS data sharing?
Attendees also received a resource that outlines how bills become law, how regulations are
finalized, and how the budget and appropriations processes can change laws or how they are
Professional Judgment in Today’s Economy
Foreclosures, pink slips, factories closing, and the self-employed losing their businesses are
realities families currently are facing. Congress gives aid administrators the authority to make
changes that more accurately reflect a student’s unique circumstances. Through case studies
and discussion, attendees examined the types of adjustments schools may make and reviewed
ED’s latest guidance related to exercising professional judgment.
Life Cycle of a Stafford Loan
Federal Stafford loans have become a staple of financial aid packages for students across the
country. Stafford loan borrowers will deal with their education loan debt not only during their time
of enrollment, but also for years, and in some cases, decades afterwards. Attendees followed
one student’s Stafford loan cycle from determining eligibility to repayment, including annual and
aggregate loan limits and cash management provisions.
Workshop manuals are available for those who were unable to attend. If you would like a manual,
please contact Stacy Cardwell at 1-800-642-5626, extension 36074, or via email at
FORM 1098-T REPORTING FOR SCHOOLS
This is a reminder to schools that they are required by federal law to file Form 1098-T, Tuition
Statement, if the school is an eligible educational institution. The school must file for each
student that they enroll and for whom a reportable transaction is made, and report financial
transactions for each student enrolled to the IRS by March 1, 2010. The reporting deadline is
March 31, 2010, if filed electronically; schools with more than 250 students must file
electronically. This reporting must include a statement to the student by February 1, 2010.
Schools must report such items as qualified educational expenses (tuition, fees, etc.),
scholarships, and adjustments on Form 1098-T. A copy of Form 1098-T may be accessed at:
An eligible educational institution is a college, university, vocational school, or other
postsecondary educational institution that is described in section 481 of the Higher Education Act
of 1965 as in effect on August 5, 1997, and that is eligible to participate in the U.S. Department of
Education's student aid programs. This includes most accredited public, nonprofit, and private
postsecondary institutions. Eligible educational institutions may choose to report payments
received, or amounts billed, for qualified tuition and related expenses. The eligible educational
institution must use the same reporting method for all calendar years unless the IRS grants
permission to change the reporting method. Qualified tuition and related expenses are tuition and
fees a student must pay to be enrolled at or attend an eligible educational institution. The
following are not qualified tuition and related expenses:
Amounts paid for any course or other education involving sports, games, or hobbies
unless the course or other education is part of the student's degree program or is taken
to acquire or improve job skills.
Charges and fees for room, board, insurance, transportation, and similar personal, living,
or family expenses.
For more information about the requirements to furnish a statement to each student, see part M in
the 2009 General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G.
Schools are not required to file Form 1098-T or furnish a statement for:
Courses for which no academic credit is offered, even if the student is otherwise enrolled
in a degree program;
Non-resident alien students, unless requested by the student;
Students whose qualified tuition and related expenses are entirely waived or paid entirely
with scholarships or grants; and
Students for whom you do not maintain a separate financial account and whose qualified
tuition and related expenses are covered by a formal billing arrangement between an
institution and the student's employer or a governmental entity, such as the Department
of Veterans Affairs or the Department of Defense.
Schools should note that penalties may be imposed for failure to file or failure to furnish correct
1098-T forms. These penalties may be waived, however, under certain circumstances.
Instructions and additional information regarding Form 1098-T are available on the IRS Web site
at: http://www.irs.gov/instructions/i1098et/index.html. For questions regarding Form 1098-T
schools should contact Nancy Vaughn at 1-800-642-5626, extension 31871, or via email at
FORM 1098-E REPORTING FOR LENDERS
Lenders or lender servicers receiving interest payments of $600 or more from an individual in
2009 must file Form 1098-E with the IRS by March 1, 2010, or by March 31, 2010, if filing
electronically. Copy B of Form 1098-E (or an acceptable substitute statement) must be
furnished to the borrower by February 1, 2010. The substitute statement must comply with the
format and content requirements specified in Publication 1179 that is available on the IRS Web
site at www.irs.gov.
The $600 threshold applies to each borrower regardless of the number of student loans obtained
by that borrower. Lenders and lender servicers may file a separate form for each loan or may
choose to file one form for the interest from all student loans of the borrower.
For loans made on or after September 1, 2004, the amount of student loan interest received by
the lender or lender servicer that is reported in Box 1 must include loan origination fees and
capitalized interest received in 2009. Box 2 must be checked if the amount reported in Box 1
does not include origination fees and/or capitalized interest.
Lenders and lender servicers should refer to the 2009 Instructions for Form 1098 as well as the
2009 General Instructions for Forms 1099, 1098, 5498, W-2G, both of which may be found at
www.irs.gov. If you have questions about reporting on Form 1098-E, call the IRS information
reporting customer service line at 1-866-455-7438.
NPEC REPORT OF INFORMATION REQUIRED TO BE DISCLOSED UNDER THE HIGHER
EDUCATION ACT (HEA) OF 1965: SUGGESTIONS FOR DISSEMINATION
The National Postsecondary Education Cooperative (NPEC) has released a report to help
colleges and universities successfully identify and meet their obligation to disclose information as
required under the HEA (as amended by the HEOA). This document includes suggestions to
help institutions make the HEA-required disclosure information more accessible and
understandable to consumers and more comparable across institutions. This document was
updated in November 2009 to reflect Final Regulations published October 28 and 29, 2009.
Following is some of the information the report contains:
Organization of the Report
The Problems of Disclosed Information Facing Consumers
Suggestions for Providing Disclosure Information
Official Sources for Information on Institutional Disclosure Requirements Under the HEA
(as Amended by the HEOA)
Summary of HEA Institutional Disclosure Requirements
Posting HEA Disclosure Information on Institutional Web sites
NPEC HEOA Working Group
The entire report is available at http://nces.ed.gov/pubs2010/2010831rev.pdf.
NEW SCHOOL REPORT FOR FFEL PURCHASED LOANS
The U.S. Department of Education (ED) announced that a new "Status of Loans Purchased by
ED Report" (PLPED3) is now available for school use. The new report is discussed in Electronic
Announcement 2009-11-24. Previously, an individual lookup on the NSLDS Professional Access
Web site was the only way to find information for loans sold to ED. The new report is discussed
in NSLDS Newsletter 25: NSLDS Identification Information and New School Report for FFEL
Purchased Loans on the IFAP Web site. This newsletter elaborates on NSLDS identification
information for FFEL Purchased Loans and illustrates its location on school and student Web
pages. In addition, the newsletter explains options related to the new "Status of Loans
Purchased by ED Report" (PLPED3).
QUARTERLY CUSTOMER SATISFACTION SURVEYS BEGAN
FIRST WEEK OF DECEMBER 2009
In Electronic Announcements posted on the Information for Financial Aid Professionals (IFAP)
Web site on August 28, 2009, and September 16, 2009, the U.S. Department of Education (ED)
explained its transition to additional servicer support for loans owned by ED. Currently, these
loans include Federal Direct Loan Program (FDLP) loans and FFEL Purchased Loans. FFEL
Purchased Loans are made under the Federal Family Education Loan (FFEL) Program by FFEL
lenders and subsequently purchased by ED through methods commonly referred to as a “PUT.”
As explained in their earlier announcements, ED began assigning FFEL purchased loans to the
four new servicers on their loan servicing team – FedLoan Servicing (PHEAA), Great Lakes
Educational Loan Services, Inc., Nelnet, and Sallie Mae – in early September 2009. Each year,
they will measure the performance of these servicers in the areas of customer satisfaction and
default aversion. ED will then use these results to determine each servicer’s allocation of
ongoing loan volume.
ED is informing the community of this year’s first quarterly customer satisfaction surveys of
borrowers, schools, and federal personnel who interface with the four new servicers. ED
presents the information as follows:
Survey Process and Notification
Survey Launched for Borrower and School Customers – First Week of December 2009
Survey Process and Notification
ED will measure customer satisfaction with each of the four new servicers – FedLoan Servicing
(PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae – exclusively
through the administration of customer satisfaction surveys. Each year, an independent vendor
will conduct quarterly surveys of borrowers, schools, and federal personnel on their behalf. The
vendor will survey borrower and school customers by telephone, and federal personnel will
complete online surveys.
Note: Before the independent vendor begins surveying customers each quarter, ED will inform
the community of the survey launch through an Electronic Announcement.
Survey Launched for Borrower and School Customers – First Week of December 2009
The independent vendor began conducting telephone surveys of borrower and school customers
during the first week of December 2009. Surveyors from Discovery Research Group will contact
a random sample of borrowers, and surveyors from OLC Global will contact a random sample of
schools. Both surveys have been designed to take no more than ten minutes to complete and
will be conducted in a manner that ensures the anonymity of all respondents.
Notes for School Survey Participants:
1. Given their borrower-centric approach to servicer assignment, the independent vendor may
contact a school that is interfacing with more than one of the four new servicers. In this case,
the school customer will be asked to respond about experiences with only one servicer
identified by the vendor.
2. The survey is specific to a school customer’s experiences with the servicing of federally
owned loans by the identified servicer. While a school customer may have other loan
servicing experiences with the servicer, responses should be limited to experiences related to
federally owned loans.
3. If the independent vendor contacts a school customer who does not work with federally
owned loans, we ask that he or she provide the name of a colleague who does this work to
the vendor and forward the call to that individual.
ED values the participation of all customers in the loan servicing process and will use the input
they receive through the surveys to allocate loan volume and assist in ensuring that all servicers
provide superior service to their customers.
COLLEGE GOAL SUNDAY 2010 NEWS
College Goal Sunday is the annual event when Michigan students and families can get free
assistance applying for financial aid. On Sunday, February 14, 2010, from 1:00 p.m. to 4:00 p.m.
financial aid professionals from colleges and universities throughout the state will be available at
27 sites to answer questions about student financial aid and to help students and families
complete the Free Application for Federal Student Aid (FAFSA).
New this year, an added feature will be College Goal Saturday, February 13, 2010, from
1:00 p.m. to 4:00 p.m. at two sites. For their convenience, students and families may attend any
In addition, there will be a special College Goal Sunday session on February 21, 2010, from
2:00 p.m. to 4:00 p.m. set aside to assist students in foster care with completing the FAFSA.
There will be one site hosted by the University of Michigan – Dearborn campus.
Students and parents are reminded to bring the following documents so they can complete the
FAFSA form on College Goal Sunday:
Social Security number
Parent or legal guardian’s Social Security number (if the student is 23 or younger and a
Driver’s license (if any)
W-2 forms or other records of money earned
2009 Federal Income Tax Return
Spouse’s 2009 Income Tax Return (if married)
Parent’s 2009 Federal Income Tax Return
2009 untaxed income records – Social Security, Temporary Assistance to Needy
Families, welfare, or veterans benefits records (if any)
2009 bank statements
2009 business and investment mortgage information, business and farm records, stock,
bond, and other investment records
Alien registration card (if not a U.S. citizen)
For those of you who are interested in volunteering at a College Goal Sunday site, you will need
to register at: http:micollegegoal.org/Volunteers/
For more information about College Goal Sunday including the locations throughout the state,
please go to the Web site at www.micollegegoal.org/Students/Locations or call 1-800-832-2464.
DENVER TEAM REGION CHANGE OF ADDRESS
The U.S. Department of Education Denver Team Region has a new address:
U.S. Department of Education
1244 Speer Boulevard, Suite 201
Denver, Colorado 80204-3582
The old address was:
U.S. Department of Education
1391 Speer Boulevard, Suite 800
Denver, Colorado 80204-2555
Please make note of this change.
COMMON MANUAL UPDATES
At its November 19, 2009, meeting the Common Manual Governing Board approved the eight
policy proposals in Batch 162 (proposal numbers 1148-1155). The approved policies may now
be implemented based on their individual effective dates.
These changes will be incorporated into the Integrated Common Manual. The Integrated
Common Manual is available on the Common Manual Web site at commonmanual.org or may be
accessed through a link on MGA’s Web site at mgaloan.com.
Following are the eight policy proposals:
U.S. Passport Card for United States Citizenship and Immigration Services (USCIS)
Borrower Eligibility for a New Loan When a Prior Loan is Conditionally Discharged
Additional Unsubsidized Stafford Loan Eligibility
In-School and Post-Enrollment Deferments for PLUS Loans
Stafford Annual Loan Limits for a Student Enrolled in Teacher Certification Coursework or
Preparatory Coursework for a Graduate or Professional Program
Regaining Eligibility for New Stafford Loan Funds after an Inadvertent Overaward
Borrower Right to Cancel All or a Portion of a Stafford or PLUS Loan Disbursed by EFT
or Master Check
Prorated Stafford Annual Loan Limits
If you have any questions about this or past changes or updates to the Common Manual, please
contact Susie Gibson at 1-800-642-5626, extension 56769, or by email at
Follow the links below to access some of the most recent announcements for schools and
lenders from the U.S. Department of Education (ED). Visit the Information for Financial Aid
Professionals (IFAP) Web site to review all announcements.
Dear Colleague Letters
2009-11-20 (ANN-09-35) Subject: Training Recording - Verification: A School
2009-11-25 (COD System) Subject: COD Processing Update
2009-11-25 (Application Processing) Subject: 2010-2011 FAFSA on the Web Worksheet
2009-11-25 (General) Subject: Federal Student Aid Data Center
2009-11-25 (Direct Loans) Subject: Issue Alert - Some Direct Loan Borrowers Received
Inaccurate Loan Status Correspondence
2009-11-25 (Grants) Subject: Updated Listing of TEACH Grant Eligible Institutions
2009-11-24 (General) Subject: 2009 Federal Student Aid Conference Presentations
2009-11-24 (Loans) Subject: Loan Servicing Information - Quarterly Customer
Satisfaction Surveys Begin First Week of December 2009
2009-11-24 (Loans) Subject: Loan Servicing Information - NSLDS Identification
Information and New School Report for FFEL Purchased Loans
2009-11-23 (Application Processing) Subject: Requesting Status Information Letters from
2009-11-23 (Application Processing) Subject: 2010-2011 CPS Mainframe Test System
2009-11-20 (COD System) Subject: COD School Testing for the 2010-2011 Award Year
2009-11-20 (COD System) Subject: COD Processing Update
2009-11-23 Subject: Student Assistance General Provisions; Teacher Education
Assistance for College and Higher Education (TEACH) Grant Program; Federal Pell
Grant Program; Academic Competitiveness Grant Program and National Science and
Mathematics Access To Retain Talent Grant Program
2009-11-20 Subject: Federal Family Education Loan (FFEL) Program: Federal
Consolidation Loan Application and Promissory Note and Related Documents
NSLDS Reference Materials
2009-11-24 (NSLDS Newsletters) Subject: Newsletter 25: NSLDS Identification
Information and New School Report for FFEL Purchased Loans
2009-11-24 (NSLDS Record Layouts) Subject: NSLDS Status of Loans Purchased By ED
Report Extract File Layout for Schools (PLPED3)
UPDATES TO MGA’S PARTICIPATING LENDER LIST
MGA has updated its Participating Lender List to provide the most current information available
regarding our FFELP lending partners. This revised list is updated regularly on our Web site at
mgaloan.com, with the date and time of the last update noted next to the link. The link may be
accessed from our home page under MGA Highlights.
When downloaded, this Excel document will allow users to sort information by lender code, lender
name, servicer, etc. It also provides information regarding additional lending criteria a lender may
currently be utilizing.
If you have any questions regarding the revised Web-based list, please contact Pat Fromm at
1-800-642-5626, extension 36076, or via email at firstname.lastname@example.org.
The following lender changes have occurred since the last issue of Educational Loan Notes and
are reflected on the updated Participating Lender List. Please note that MGA can speak only to a
lender’s relationship with our agency. If you have questions regarding a lender’s participation
with another guarantor, we recommend you contact that lender or guarantor directly.
No Longer Participating
The following lenders have notified MGA that they are no longer participating in the Federal
Family Education Loan Program:
Bank of America, N.A., 831495
KeyBank, N.A., 813760
UPDATES TO MGA’S ACTIVE MICHIGAN SCHOOL LIST
Information has been received from a school regarding a recent change that should be recorded
by lenders on MGA’s “Active Michigan School List” dated July 7, 2009. If you have any questions
regarding this update, please contact Stacy Cardwell at 1-800-642-5626, extension 36074, or via
email at email@example.com.
Fax Number Change
Adrian College, 002234-00, Adrian
The new fax number is 517-264-3153.
“Q” AND “A”
Best of 2009
How many PLUS loan repayment plans are there? And what are they?
They are standard repayment plan, graduated repayment plan, and extended repayment plan.
The standard repayment plan requires fixed monthly payments, with full repayment within
ten years. Payments must be at least $50 a month and could be more if necessary to repay the
loan(s) within the required time period. The graduated repayment plan starts with lower monthly
payments, with the payment amount increasing over time. No single payment will be more than
three times greater than any other payment. The extended repayment plan allows for the
monthly payments to be adjusted annually based on the borrower’s total monthly gross income
from all sources. The borrower may contact the lender at any time for more information about
this repayment plan option.
This information has been updated from the “Q” and “A” published in the February 2009 edition of
Educational Loan Notes.
May a student attend multiple schools? How is financial aid administered?
A student may be enrolled simultaneously on at least a half-time basis in more than one school.
The student may be eligible to receive a Stafford loan along with a Grad PLUS loan, if applicable.
The parent of a dependent student may be eligible to receive a PLUS loan for more than one
payment period or period of enrollment.
If a student is enrolled at two schools, both schools need to coordinate with one another to
ensure that the student’s eligibility for a Stafford and/or Grad PLUS loan, if applicable, and the
parent’s eligibility for a parent PLUS loan is properly determined.
For more information, see the “Q” and “A” from the March 2009 edition of Educational Loan
Is there a step-by-step process that borrowers can use to determine whether or not they
should contact the FSA Office of the Ombudsman? How do they contact the
Yes, the FSA Office of the Ombudsman has provided forms, tools, and checklists to help a
borrower reach a resolution to their student loan problem and to determine when it is appropriate
to contact the Ombudsman for additional assistance. If the borrower has done all they can to
resolve the issue on their own, they may contact the FSA Office of the Ombudsman for
assistance at 1-877-557-2575.
MGA’s Ombudsman is also available to help borrowers resolve issues with loans guaranteed
by the Michigan Guaranty Agency. Prior to contacting the FSA Office of the Ombudsman,
borrowers with MGA loans may contact the MGA Ombudsman for assistance at 1-800-642-5626,
extension 36076 or at firstname.lastname@example.org.
For more information, see the “Q” and “A” from the April 2009 edition of Educational Loan Notes.
For students who transfer or change programs, how is the remaining loan eligibility
determined in regard to overlapping loan periods?
The annual loan limits are based on an academic year. If a student transfers from one school to
another school, or changes to a different program at the same school and there is an overlap of
academic years, this overlap may affect the amount that the student is eligible to borrow at the
new school or for the new program.
An overlap in academic years exists at the new school if the academic year at the new school or
new program at the same school begins before the calendar end date of the academic year at the
prior school or program. You may obtain documentation from the prior school of the specific
beginning and ending dates for the prior academic year or may consider the prior academic year
to have begun with the starting date of the student’s most recent loan period (as shown in
NSLDS) and to have ended 30 calendar weeks later. (However, if the most recent loan period
was more than 30 calendar weeks in length, the new school must consider the academic year at
the prior school to have ended on the last date of the prior loan period.)
The same principles for students who transfer from one school to another school would apply in
the case of students who change programs within the same school.
For programs with standard terms or nonstandard SE9W terms, use SAY, BBAY 1, or
If a student enrolls in a program with standard terms (or nonstandard SE9W terms) after already
having taken out a loan at another school with an overlapping academic year, the student initially
may not receive more than the annual loan limit minus the amount received at the prior school.
However, the student may borrow again for a subsequent term within the same academic year at
the new school if the term begins after the end of the academic year at the prior school. For a
subsequent term that begins after the end of the prior school’s academic year but within the initial
academic year at the new school, the student may borrow up to the difference between the
applicable annual loan limit and the amount already received for the new school’s academic year.
For clock-hour and nonterm programs and programs with nonstandard terms that are not
SE9W, use BBAY 3:
Transfers between schools:
A student who enrolls in a clock-hour or nonterm program (or a program with nonstandard terms
that are not SE9W) after already having taken out a loan at another school with an academic year
that overlaps the academic year at the second school, the student is restricted to the original
annual loan limit until the completion of the first academic year at the new school unless the
second school accepted transfer credits or clock hours from the first school. If the second school
accepts transfer hours from the first school, the second school would certify a loan for the
remaining balance of the annual loan limit for the period that covers the remaining portion of the
loan period at the first school. After this remaining balance is completed, the student would
progress to a new loan period and a new annual loan limit.
Transfers between programs at the same school:
For a transfer between programs at the same school, you would look to the requirements for
payment periods. There would be a new loan period with new payment periods or, if you choose
to consider the student to be in the same payment period, there would be no new loan period.
Same payment period and same loan period:
At your option, you may consider a transferring student to be in the same payment period if:
The student is continuously enrolled at the school;
The coursework in the payment period the student is transferring out of is substantially
similar to the coursework the student will be taking when he or she first transfers in the
The payment periods are substantially equal in length in weeks of instructional time and
credit or clock hours, as applicable;
There are few or no changes in school charges associated with the payment period to the
The credits or clock hours from the payment period the student is transferring out of are
accepted toward the new program.
For more information, see the “Q” and “A” from the May 2009 edition of Educational Loan Notes.
How may borrowers contact ED’s Veterans Disability Discharge Unit?
The address is:
U.S. Department of Education
FSA, Business Operations, Processing Division
Veterans Disability Discharge Unit
61 Forsyth Street, SW 19T89
Atlanta, GA 30303
Include a contact name, phone number, and email address with each submission. For
submission questions, contact ED’s Veterans Disability Discharge Unit by phone at
404-562-6012, by fax at 404-562-6059, or by email at FSAAatlantaContacts@ed.gov. When
calling, request the Veterans Disability Discharge Unit. When contacting via fax or email include,
“RE: Veterans Disability Discharge” in the subject line.
For more information, see the “Q” and “A” from the June 2009 edition of Educational Loan Notes.
If a borrower has several loans in default and the school receives a letter of good standing
from the loan holder, can we conclude that all of the loans in question are no longer in
While MGA will not send out a good standing letter unless the borrower has made satisfactory
arrangements on all loans in default, it is always best to obtain good standing letters that contain
specific loan identification numbers. Those ID numbers can then be matched on NSLDS through
the loan detail screens to ensure that the borrower has regained eligibility on every loan. A good
standing letter from MGA will always include an ID number and will look like “MI-xxxxxxxxxx”.
Schools will easily be able to match those loans with the loans listed on NSLDS.
For more information, see the “Q” and “A” from the July 2009 edition of Educational Loan Notes.
Who is responsible for repayment of an overpayment when it is a result of a resolved
When a school has resolved an overpayment by reducing scheduled future disbursements for a
second or subsequent payment period and the student ceases attendance before the end of the
current payment period, that portion of the student’s award that was an overpayment must be
repaid outside of the requirements of 34 CFR 668.22.
If the school is responsible for repaying the overpayment, the school must repay the overpayment
before completing any required Return of Title IV Funds (Return) calculation as described in
Chapter 2 of the 2008-2009 Federal Student Handbook, Volume 5. If the student is responsible
for repaying the overpayment, and the student withdrew after the 60 percent point in the payment
period or period of attendance, as applicable, the school should try to collect the overpayment
from the student and if it is unable to do so, should refer the student to ED’s Borrower Services.
If the student is responsible for repaying the overpayment, and the student withdrew before the
60 percent point in the payment period or period of attendance, as applicable, the school should
not take any action until it has completed the required Return calculation.
However, when performing the return calculation, the school should not include the amount of the
overpayment for which the student is responsible as Aid that was or could have been disbursed.
Then, when the school has completed the Return calculation, it should document the amount of
the overpayment and, as applicable, reduce any post-withdrawal disbursement or increase any
amount the student must return by the amount of the overpayment owed by the student.
For more information, see the “Q” and “A” from the August 2009 edition of Educational Loan
How can a student regain eligibility, when they have exceeded annual and aggregate loan
There are several ways for a student to regain Title IV eligibility. First, the student may repay the
amount of funds that caused the student to become ineligible. An effective way to eliminate a
subsidized funds overage is to have the student authorize the school to reallocate the funds from
subsidized funding to unsubsidized funding. The school then initiates a reallocation with the
Stafford lender or guarantor (or the DL servicer). This avenue is not always available. When a
loan is consolidated, funds cannot be reallocated.
A student may also contact the Stafford lender (or DL servicer) to make a satisfactory payment
arrangement to repay the amount over the annual or aggregate loan limit. This is accomplished
by discussion with the lender or DL servicer regarding an appropriate manner of repayment. The
agreement may be in the form of a letter or document requiring the borrower to sign a repayment
plan reaffirming the borrower will repay the excess amount in accordance with the terms and
requirements in the original promissory note.
A Consolidation loan is considered to be a satisfactory repayment agreement and restores the
student’s eligibility for Title IV aid. The Consolidation loan does not automatically restore the
borrower’s ability to obtain additional Stafford loans. If the borrower has exceeded the subsidized
portion, and has not exceeded the unsubsidized portion, the borrower will be eligible to obtain
unsubsidized loans. If the student has exceeded the cumulative loan limits, the borrower is not
eligible for Stafford loans but could receive additional non-Stafford aid.
For more information, see the “Q” and “A” from the September 2009 edition of Educational Loan
What is or is not included in the SAP judgment?
For the student’s enrollment, all periods are counted, even those where the student did not
receive Federal Student Aid funds. School policy may allow that credits attempted and grades
earned in one major may not be counted for students that have a new major. The school may
limit how many times a student may change majors to reset SAP. For transfer students, credits
from another school that apply to the current program for that student must be counted. Grades
can be excluded for prior attempts (repeat/delete) toward SAP, but all credits apply in assessing
the quantitative SAP standard.
For more information, see the “Q” and “A” from the October 2009 edition of Educational Loan
How does a school participate in the monitoring process for transfer students?
Schools wishing to use the NSLDS Inform feature should go to www.fsawebenroll.ed.gov to sign
up for the Transfer Student Monitoring/Financial Aid History (TSM/FAH) batch service. The
school is required to designate a school contact on the profile page prior to creating any Inform
records. This tells NSLDS who will be submitting the Inform files on behalf of the school and how
the school wants to receive an alert notice.
The school must then identify students who are transferring to their school by submitting the
Inform file(s). Schools may create a list of transfer students on the NSLDS Web site or by
sending the list to NSLDS as an electronic batch file.
The school has the option to either check NSLDS for the student’s financial aid history or wait
seven days after the student’s information has been submitted for monitoring to receive an alert if
any data for the student has changed. NSLDS will alert and also send an email to the school if
changes are detected for transfer students on the school list. NSLDS issues alerts weekly. The
school has the option to review the alert list or download a batch file, if requested by the school.
For more information, see the “Q” and “A” from the November 2009 edition of Educational Loan
Past issues of Educational Loan Notes, including the “Q” and “A” for each month of 2009, have
been archived on our Web site.
CALENDAR OF UPCOMING EVENTS
Following is a list of upcoming events of interest to the financial aid community. If you have
any items that you would like to see added to our calendar, please contact Jim Peterson at
1-800-642-5626, extension 36944, or via email at email@example.com.
24 MGA Offices Closed
25 MGA Offices Closed
31 MGA Offices Closed
1 MGA Offices Closed
18 MGA Offices Closed
31 – Feb 3 MSFAA Winter Training
Lexington Lansing Hotel
15 MGA Offices Closed