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Update #2 Direct Consolidation Loans

PublicationDate: 10/10/97
Summary: Update #2 Direct Consolidation Loans
Author: OPE - Office of the Assistant Secretary for OPE

Posted October 10, 1997

Dear Colleague:

I am delighted to announce continued significant progress in resolving the backlog of
Direct Consolidation Loan applications we had in process at the beginning of
September. As of October 6, 1997, we have reduced the original backlog by more than
44% in just the first four weeks of our twelve week recovery plan. Of the remaining
inventory 77% is in the final stages of processing, the promissory note stage. For the
past week I am pleased to report the following:

Applications Received from September 1996 to August 1997: 142,856

As of 9/29/97 As of 10/6/97
Applications Consolidated (completed): 65,720 69,912

Applications Withdrawn/Deactivated 21,381 25,494

Current Applications in Process 55,755 47,450

Breakdown of Current Applications:
As of 9/29/97 As of 10/06/97

1) Applications in Pre-Certification
Review stage (incomplete
application): 1,396 2

2) Applications in Certification of Loan
Amounts Stage (awaiting loan holder
information): 18,428 10,900

3) Applications in Promissory Note Stage: 35,931 36,548*

*Of these, 30,915 are awaiting borrower return of a signed promissory
note; the balance of the number are promissory notes in quality-review prior to the
mailing of the note. Beginning this weekend, a reminder postcard is being mailed to
applicants who have not returned promissory notes, urging them to do so promptly.

I hope this information is helpful. I will continue to provide you with updated news of
the progress in eliminating the application backlog. My next message will provide
general information about student loan consolidation.

In the meantime, I urge you as possible loan holders of Perkins or Health Professions
or Nursing loan information to respond promptly to any requests you receive for
certifications of loan information for either FFEL or Direct Loan consolidation
purposes so that we might be able to continue to assist consolidation borrowers.

Respectfully submitted,

Elizabeth M. Hicks
Deputy Assistant Secretary
Student Financial Assistance Programs

Last Modified: 08/16/1999