| PublicationDate: 11/14/97 Summary: Update #7: Direct Consolidation Loan Author: ODAS - Office of the Deputy Assistant Secretary - SFA Consolidation Update Seven November 14, 1997 Dear Colleague: I am pleased to provide additional information about our progress in processing Direct Loan consolidation applications. First, however, I would like to respond to your questions about borrowers who are deactivated at some stage in the Direct Loan consolidation application process who contact us later to indicate that they wish to reactivate their applications. When the Direct Loan consolidation contractor deactivates a borrower's application -- usually because we have not received information from a borrower or because the borrower has not signed and returned a promissory note--we notify that borrower that he or she may reactivate the application at any time simply by supplying the information or returning the promissory note. When we then receive the request from a borrower, we reactivate the application at the same processing stage at which it was deactivated. Except for applications that have been inactive for so long that financial data may no longer be correct, we do not require borrowers to repeat any steps that already have been completed. Please note that this reactivation process also is explained in the other correspondence that we send to borrowers who have applied for Direct Loan consolidation. I am pleased to report that as of November 10, more than 7900 borrowers have reactivated their applications and that we have funded and booked 4,123 of these. We are also working very hard to improve our communications with borrowers so that more of them will complete all the steps necessary for Direct Loan consolidation. While it is not easy to benchmark industry standards in the financial services industry, we do have information that suggests that the percentage of applicants who have completed the DL consolidation process is within the range for some sectors of the lending community Please see the data below for the current status of application at our Direct Loan Consolidation Center: Status: As of 10/27/97 As of 11/12/97 I. Applications Consolidated (completed): 84,975 92,722 Applications Withdrawn/Deactivated 40,600 39,384 Current Applications in Process 17,281 10,750 II. Breakdown of Current Applications: Applications in Pre-Certification Review stage (incomplete application) 0 0 Applications in Certification of Loan Amounts Stage (awaiting loan holder information): 760 248 Applications in Promissory Note Review 492 57 Applications in Promissory Note Stage 14,294 6,606 Respectfully submitted, Elizabeth M. Hicks Deputy Assistant Secretary Student Financial Assistance Programs |