Financial Aid Services Bulletin 2010 - 006

Processing Timeline for FFELP Loans between April and June 2010

The Health Care and Education Reconciliation Act of 2010 amended the Higher Education Act (HEA) by terminating a guarantor’s authority to make or insure new FFELP loans after
June 30, 2010.

HESC will take the following steps to implement this requirement:

April 2010

• HESC will deny any loan with an anticipated first disbursement date of July 1, 2010 or later.
• HESC is canceling loans that have already been guaranteed if they have an anticipated first disbursement date of July 1, 2010 or later. HESC is sending a paper notification of the cancellation to borrowers, schools and lenders/servicers. HESC will also send CommonLine Change Transactions electronically to schools and lenders/servicers if they are set up to receive an electronic transmission of this data.
• Also, if the anticipated disbursement date is July 1, 2010 or later, HESC systems will not allow the loan to be reopened for disbursement, reinstatement or reissue of funds.

June 22, Tuesday

• HESC will no longer notify borrowers to complete an eMPN or paper MPN if the transaction is received after 8:00 P.M. From this point forward, HESC will only process files for guarantee.

June 25, Friday

• Any files for guarantee, including Blanket Guarantee, will be processed if received by 8:00 P.M. Any files received after 8:00 P.M. will neither be processed nor guaranteed.
• The HESC web site for the electronic MPN (eMPN) will be disabled at 7:30 P.M. At this point, borrowers will no longer have the ability to complete an eMPN. The school and lender screens for guarantee and guarantee and print will also be disabled.
• All loans must be guaranteed before the end of the day. This includes certification by the school and credit approval for PLUS loans. Also, by this date all loans must have a valid MPN on file at HESC or at the lender/servicer. In the lender flow, the lender has five days to approve credit. The lender will only have until June 30 to approve credit and must make the first disbursement before July 1.

June 26, Saturday

• HESC will no longer guarantee new loans or process loan adjustments (reallocations).

June 29, Tuesday

• This will be the last date EFT Express will process disbursements with a settlement date of June 30.

June 30, Wednesday

• Effective June 30, EFT Express will error a transaction and not allow a disbursement if a previous disbursement does not exist before July 1, 2010.
  

To provide assistance to the school community, the NCHELP Regulations Committee, with the help of other NCHELP Committees, has developed a question and answer resource intended to assist FFELP participants to understand and implement Direct Loan originations, and to explain the parameters of the temporary Direct Loan consolidation authority.

In creating the question and answer document, NCHELP intended for organizations to add their own specific processing information and deadlines. Find additional information in the Initiatives Section of the NCHELP Web site under Direct Loan Transition.

Please direct questions or comments regarding the use of HESC electronic products or services to priorityservices@hesc.org. Direct any technical problems with HESC electronic service to the helpdesk@hesc.org.

To contact HESC toll free, call 1-866-431-HESC (1-866-431-4372) and follow the menu prompts.