Team II
Loan Issues

Third Meeting
March 24-26, 1999
Washington, DC

This meeting commenced at approximately 1:00 p.m. on March 24, 1999, as scheduled, and adjourned on March 26, 1999, at approximately 4:00 p.m.

All members except the National Association of Graduate/Professional Students; and the Facilitators were present. The summary of the Team's second meeting was approved as revised. (The only revision was the deletion of 682.210(c) from the listing of tentative agreements.) Approved meeting summaries will be posted on the Internet.

As preliminary matters the Facilitators explained that Jeff Baker, of the Department of Education, was assigned to monitor all four Teams for overlapping issues and to insure that redundant efforts and conflicting agreements are avoided. If Team members wish to provide input on issues that are partly within the purview of the Team and partly within another Team, they should get their comments to either a member of the other Team or Jeff Baker. They also reminded the Team that the preamble to the regulations would not be negotiated under the Committee's organizational protocols, but that the Committee may suggest inclusions in the preamble. Team members expressed the desire to comment upon the preamble prior to its publication.

The meeting's main discussions substantially followed an agenda and issues documents previously distributed by the Department of Education. The Department of Education and other members also distributed draft regulatory provisions. A number of tentative agreements were achieved. These are reflected in the appendix to this summary, which also reflects the status of other provisions and the agenda for this Team's fourth meeting, which is scheduled for April 21-23, 1999, in Washington, DC.

Additionally, the Team agreed to the following. "Unsolicited Applications" and "Lender Disclosures" will be removed from this Team's issues list and addressed by Team I. "In-School Deferment Processing" is removed from this Team's issues list for the Perkins program because it is already part of a published NPRM.

ATTACHMENT

PERKINS - PACKAGE "A"

674.2 - Satisfactory Repayment Arrangements (page 2)

674.5 - Cohort Default Rates (pages 3-5)
TENTATIVE AGREEMENT

674.6 - Cohort Default Rate / Default Reduction Plan (page 6)
TENTATIVE AGREEMENT

674.7 - Expanded Lending Option (page 7)
TENTATIVE AGREEMENT

674.9 - Reestablishment of Borrower Eligibility (page 8)

674.12 - Loan Limits (page 9)
TENTATIVE AGREEMENT

674.16 - Credit Bureau Reporting (page 10)
TENTATIVE AGREEMENT

674.31(b)(2)(C) - Grace Period for Military Service (page 11)
TENTATIVE AGREEMENT

674.31(b)(10) - Credit Bureau Reporting (page 11)
TENTATIVE AGREEMENT

674.33(f) - Incentive Repayment Program (page 12)
TENTATIVE AGREEMENT

674.33(g) - Closed School Discharge (pages 12-15)

674.34 - Extended Deferments and Cancellations (page 16)
TENTATIVE AGREEMENT

674.39 - Extended Deferments and Cancellations (page 17)
TENTATIVE AGREEMENT

674.39 - Loan Rehabilitation (page 18)

674.42 - Exit Counseling (pages 19-21)
TENTATIVE AGREEMENT

674.45 - Credit Bureau Reporting (page 22)
TENTATIVE AGREEMENT

674.49 - Bankruptcy of Borrower (pages 23-25)

674.52-.53 - Extended Deferments and Cancellations (pages 26-28)
TENTATIVE AGREEMENT

674.56-.58 - Extended Deferments and Cancellations (pages 29-32)
TENTATIVE AGREEMENT

674.60 - Extended Deferments and Cancellations (page 33)
TENTATIVE AGREEMENT

COHORT DEFAULT RATES - PACKAGE "B"

668.17(a) - Dissemination of Rates and Data (page 1)

668.17(b)(4) - Loss of Pell Eligibility (pages 3-4)

668.17(b)(5)(ii) - Unsuccessful Appeals / Repayment (page 4)

668.17(b)(6) - Special Institutions (pages 4-6)

668.17(b)(7) - Unsuccessful Appeals (pages 6-7)

668.17(c)(1)(ii)(A) - Participation Rate Index (pages 13-14)

668.17(c)(1)(ii)(B) - Exceptional Mitigating Circumstances (pages 14-17)

668.17(c)(1)(ii)(C) - Other Mitigating Circumstances (pages 17-18)

668.17(c)(7) - Exceptional Mitigating Circumstances / Auditors' Opinion (pages 18-20)

668.17(h)(2) - Loan Servicing Appeals / Exclusion of Loans (page 25)

668.17(h)(4) - Loan Servicing Appeals / Records (pages 26-27)

668.17(j)(1) - Dissemination of Rates and Data (pages 28-29)

668.17(j)(4) - Participation Rate Index (pages 30-31)

FFEL / DIRECT LOAN - PACKAGES "C" and "D"

Consolidation Loans/Eligible Loans
TENTATIVE AGREEMENT
     FFEL -- 682.100(a) (package C, pages 2-3)

FAFSA as Application
     FFEL -- 682.102(a) (package C, page 4)

Consolidation Loans/Choice of Lender
     FFEL -- 682.102(d) (package C, page 5)

Definition of Default
TENTATIVE AGREEMENT
     FFEL -- 682.200 (package C, page 6)
     Direct Loans -- 685.102 (package D, page 2)

Definition of Estimated Financial Assistance/VA Americorps TENTATIVE AGREEMENT
     FFEL -- 682.200 (package C, pages 6-7)
     Direct Loans -- 685.102 (package D, pages 2-4)

Definition of Holder/Master Promissory Note
     FFEL - 682.200 (package C, page 7)

Definition of Eligible Lender/Assistance to Schools
     FFEL -- 682.200 (package C, page 8)

Definition of Master Promissory Note
     FFEL - 682.200 (package C, page 9)
     Direct Loans - 685.102 (package D, pages 4-5)

FAFSA as Application
     FFEL -- 682.201(a)(2) (package C, pages 11-12)

Consolidation Loans/Eligible Borrowers
     FFEL -- 682.201(c)(1)(iii) (package C, page 14)

Consolidation Loans/Choice of Lender
     FFEL -- 682.201(c)(1)(vi) (package C, page 15)

Consolidation Loans/Adding Loans
     FFEL -- 682.201(c)(d) (package C, page 16)

Master Promissory Note
     Direct Loans - 685.201 (package D, pages 6-9)

Interest Rates
TENTATIVE AGREEMENT
     FFEL -- 682.202(a) (package C, pages 17-24)
     Direct Loans -- 685.202(a) (package D, pages 10-15)

Capitalization of Interest
     FFEL -- 682.202(b), 685.203 (package C, page 25)

Origination Fees
     FFEL -- 682.202(c) (package C, page 26)
     Direct Loans -- 685.202(c) (package D, pages 15-16)

FFEL / DIRECT LOAN (Cont.) - PACKAGES "C" and "D"

Loan Limits
     FFEL -- 682.204 (package C, pages 28-36)
     Direct Loans -- 685.203 (package D, pages 17-24)

Master Promissory Note
     FFEL - 682.206(a) (package C, page 37)

Loan Certification Data Items
TENTATIVE AGREEMENT
     FFEL -- 682.206 (package C, page 38)

Disbursement Exemptions
TENTATIVE AGREEMENT
     FFEL -- 682.207(c) (package C, pages 39-40)

Technical Correction to Grace Period
TENTATIVE AGREEMENT
     FFEL - 682.209(a)(4) (package C, pages 41-42)

Grace Period for Military Service
TENTATIVE AGREEMENT
     FFEL -- 682.209(a)(6) (package C, page 42)
     Direct Loans -- 685.207 (package D, pages 30-31)

Repayment Plans
TENTATIVE AGREEMENT
     FFEL -- 682.209(a)(7)(iii) (package C, pages 43-44)

Repayment Plans
     FFEL -- 682.209(a)(7)(v)-(x) (package C, pages 44-47)

Repayment Plans
TENTATIVE AGREEMENT
     FFEL -- 682.209(c) and (h) (package C, pages 47-49)

Consolidation Loans/Interest Subsidy
TENTATIVE AGREEMENT
     FFEL -- 682.210 (package C, pages 51-52)

Deferments for Old Borrowers
TENTATIVE AGREEMENT
     FFEL -- 682.210(c)(1)(iii) (package C, page 55)
     Direct Loans -- 685.204(d) reference to FFEL regulations

In-school Deferment
     FFEL -- 682.210(c) (package C, pages 55-56)
     Direct Loans -- 685.204(b) (package D, pages 25-26)

Unemployment Deferment
     FFEL -- 682.210(h) (package C, pages 56-58)
     Direct Loans -- 685.204(b) reference to FFEL regulations

Forbearance
     FFEL -- 682.211(a) & (f) (package C, pages 59-60)
     Direct Loans -- 685.205 (package D, pages 27-29)

Consolidation Loans/Interest Subsidy
TENTATIVE AGREEMENT
     FFEL -- 682.300; .301 (package C, pages 63-66)

Master Promissory Note
     FFEL -- 682.401 (package C, pages 67-70)
     Direct Loans - 685.402 (package D, pages 56-57)

Bankruptcy
     682.402(f) to (h) (package C, pages 71-84)

Loan Discharge for Refunds Not Paid
     FFEL -- 682.402(l) to (p) (package C, pages 84-88)
     Direct Loans -- 685.212; .215 (package D, pages 34-41)

Master Promissory Note
     FFEL - 682.406; .409; .414 (package C, pages 89-95)

Choice of Loan Programs
TENTATIVE AGREEMENT
     FFEL -- 682.601
     Direct Loans -- 685.300 (package D, page 44)

Loan Certification Data Items
TENTATIVE AGREEMENT
     FFEL -- 682.603 (package C, pages 96-97)

Disbursement Exemptions
TENTATIVE AGREEMENT
     FFEL -- 682.604(c) (package C, pages 100-101)
     Direct Loans - 685.301; 303 (package D, pages 45-48)

Exit Counseling for Borrowers
TENTATIVE AGREEMENT
     FFEL -- 682.604(g) (package C, pages 103-107)
     Direct Loans -- 685.304 (package D, pages 49-53)

Loan Certification Data Items
TENTATIVE AGREEMENT
     FFEL -- 682.610 (package C, pages 108-109)

Repayment Incentives
TENTATIVE AGREEMENT
     Direct Loans - 685.211(b) (package D, pages 32-33)

School Participation Requirements
     TENTATIVE AGREEMENT
     Direct Loans - 685.400; .401 (package D, pages 54-55)
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