| PublicationDate: 8/28/97 Summary: The purpose of this message is to correct any misinformation you may have heard concerning recent actions taken by the Department of Education. As of August 26, 1997, we temporarily ceased accepting Federal Direct Consolidation Loan applications. Author: ODAS - Office of the Deputy Assistant Secretary - SFA Dear Colleague: The purpose of this message is to correct any misinformation you may have heard concerning recent actions taken by the Department of Education. As of August 26, 1997, we temporarily ceased accepting Federal Direct Consolidation Loan applications. We are taking this action so that we can focus our efforts on processing current applications. To be fair to new customers, we will not accept new applications until we are able to process them in a reasonable amount of time. Our top priority is to process current applications as soon as possible; we will let you know when we resume accepting applications. In the meantime, we continue to process loan applications in progress. We have delayed the last phase of consolidation for a short period of time while we take some immediate actions to correct deficiencies. But we continue to process and move applications forward to this point. We are advising borrowers as follows: If you would like to consolidate your debt and you have only FFEL loans, you can consolidate them along with any Perkins loans and any eligible Health Profession Loans under the FFEL program. You should contact one of the holders of your FFEL loans for information about FFEL loan consolidation. If you consolidate into FFEL, you may still be eligible to consolidate that new loan into the Direct Loan Program later to take advantage of different repayment options. The law does not allow Direct Loans to be consolidated into FFEL loans. However, at this time, you may choose to consolidate your other loans into a FFEL consolidation loan and reconsolidate into the Direct Loan Program later. I deeply regret the inconvenience, but believe that this is ultimately the best way to ensure quality service to our customers in the consolidation of their loans into Direct student loans. I will keep you updated as to our progress. Sincerely, Elizabeth M. Hicks Deputy Assistant Secretary Student Financial Assistance Programs |