Publication Date: February 2002
Author: General Manager: Financial Partners Channel
Summary: Amendment to the Great Lakes Voluntary Flexible Agreement
Publication Year: 2002
Comment Period Begin Date: 02/18/2002
Comment Period End Date: 03/04/2002
Publication Title: Amendment to the Great Lakes Voluntary Flexible Agreement
The Voluntary Flexible Agreements (VFAs) were introduced in Section 428A of the 1998 Amendments to the Higher Education Act of 1965. These amendments mandated the negotiation and implementation of the VFAs with guaranty agencies (GAs) participating in the Federal Family Education Loan (FFEL) Program. The VFAs are intended to provide alternatives to the current GA financing model. VFAs incorporate and modify the existing FFEL agreements between ED and the participating guaranty agencies, and test new and innovative methods for carrying out the types of activities currently required of guaranty agencies in order to find more efficient and effective means of managing the FFEL program.
There are four active FFEL guarantors that have entered into VFAs with the Department of Education (ED):
- American Student Assistance [ASA]
- California Student Aid Commission [CSAC]
- Great Lakes Higher Education Guaranty Corporation [GLHEGC]
- Texas Guaranteed Student Loan Corporation [TGSLC]
Attached to this notice are GLHEGC’s VFA and the proposed changes GSHEGC is requesting to amend their VFA. The changes requested are as follows:
Please forward all comments to Ora Chowbay by e-mail at Ora.Chowbay@ED.Gov.
- �To correct a typographical error, an âsâ has been added to the word ârestrictâ in line two of the third Whereas clause on page one.
- Section 5(j) located on page two of the draft amendment provides a limited waiver ofÂ Â 34 C.F.R.Â§682.404(k)(4) (prohibition of conflicts). This waiver will allow Great Lakes to contract with an outside entity to provide post-default collection assistance despite its prior telephone location services for default aversion assistance.
- In the event of termination of the VFA, Great Lakes is requesting that ED allow the waiver of 34 C.F.R. Â§682.404(k)(4) to remain in place for a period not to exceed 90 days following the effective date of the termination.Â This will give Great Lakes adequate time to recall and find alternative placements for previously placed accounts.