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(Disaster Letter-97-21) (Disaster Letter-97-21) Storm damage and flooding in Illinois.

DCLPublicationDate: 9/1/97
DCLID: Disaster Letter-97-21
Summary: Storm damage and flooding in Illinois.

September 22, 1997

DISASTER LETTER 97-21: Storm damage and flooding in

Dear Guaranty Agency Director:

On September 17, President Clinton declared COOK county in
ILLINOIS to be a disaster area because of storm damage and
flooding that began on August 16. Guaranty agencies and lenders
are authorized to use the Department's disaster-related forbearance
policies to assist FFEL borrowers who are residents of that county.

Please note that this letter is designated as "Disaster Letter 97-21."
We did that in response to requests from several FFEL Program
participants who recommended that each natural disaster letter be
numbered (this is the 21st disaster letter to be sent in 1997.) For
your reference, here is a list of the previous disaster letters
(retroactively numbered) sent in 1997:


97-01 01-14 flood - CA, ID, NV
97-02 01-21 flood - CA, ID, NV, WA
97-03 01-24 flood - OR
97-04 02-06 flood - WA
97-05 03-02 tornado - AR
97-06 03-05 flood - KY, OH
97-07 03-10 flood/tornado - AR, IN, KY, OH,
97-08 03-25 flood/tornado - AR, IL, IN, KY,
97-09 03-26 flood/tornado - AR, IL, IN, KY,
97-10 04-03 tornado - TN
97-11 04-08 flood - ND, SD
97-12 04-09 flood - MN
97-13 04-16 flood - AR
97-14 04-17 flood - MN
97-15 04-25 flood - ND
97-16 05-27 flood - MN
97-17 07-16 flood - MI, TX, WI
97-18 07-30 flood - VT
97-19 08-19 flood - AL, CO
97-20 08-27 flood - MN

On January 14, 1997, in "Disaster Letter 97-01," the Department
published an interim policy that permitted loan holders to more
easily assist borrowers who were victims of major natural disasters.
That policy has received such widespread approval that we believe
there is no further need to consider it an "interim" policy. So that all
FFEL Program participants will be familiar with this policy, it is
reprinted below:

1. Loan holders are strongly recommended to grant forbearances
to borrowers who contact them and indicate that they have
been adversely affected by the disaster and need temporary
relief from their loan obligations. If the holder believes that
the borrower has been harmed and needs assistance, the
holder may grant a forbearance for up to 3 months based on
either the borrower's oral or written request for assistance,
which must be documented in the holder's files.

2. The holder does not need to obtain supporting documentation
or a signed written agreement from the borrower to justify a
forbearance for this initial 3-month period. The Secretary will
decline to enforce the requirements of 34 CFR 682.211(c) for
this period.

3. A continuation of the forbearance past this 3-month period
will require supporting documentation and a written
agreement from the borrower.

Lenders and guaranty agencies may contact the Department's toll-
free number at 1-800-433-7327, Monday through Friday from 9:00
a.m. to 5:00 p.m.EST for further updates. This letter has also been
sent to each regional office of the Department, plus the National
Council of Higher Education Loan Programs, Inc., the Consumer
Bankers Association, the National Association of Student Financial
Aid Administrators, and the Student Loan Servicing Alliance.


Pamela A. Moran
Chief, Loans Branch
Policy Development Division
Student Financial Assistance Programs

Last Modified: 08/31/1997