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Update #6 Direct Consolidation Loans

PublicationDate: 10/29/97
Summary: Update #6 Direct Consolidation Loans
Author: OPE - Office of the Assistant Secretary for OPE

Dear Colleagues:

I am pleased to provide the following information about our progress in resolving the
backlog of Direct Consolidation Loan applications we had in process at the beginning
of September. The outstanding inventory of applications has been reduced by 79%
since September 15, resulting in a 58% increase in completely consolidated loans:

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

As of 10/20/97 As of 10/27/97
Applications Consolidated (completed): 79,144 84,975

Applications Withdrawn/Deactivated 40,311 40,600*

Current Applications in Process 23,401 17,281

Breakdown of Current Applications:
As of 10/20/97 As of 10/27/97

1) Applications in Pre-Certification
Review stage (incomplete
application): 2 0
2) Applications in Certification of Loan
Amounts Stage (awaiting loan holder
information): 2,526 760
Promissory note review
3) Applications in Promissory Note Stage: 20,873 14,294**

*4,253 applications which were deactivated have since been reactivated because the
applicant eventually either supplied missing information or requested reinstatement.
This compares to 800 reactivations as of 10/20.

**Of these, 13,802 are awaiting borrower return of signed note; the balance are in
quality-review prior to mailing. A reminder postcard is mailed to applicants who have
not returned their 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 as we move to re-opening Federal
Direct Loan process to new applicants.

Respectfully submitted,
Elizabeth M. Hicks
Deputy Assistant Secretary
Student Financial Assistance

Last Modified: 08/16/1999