Publication Date: July 30, 2008
Author: Lawrence A. Warder, Acting Chief Operating Officer, Federal Student Aid
Summary: Notices of Intent to Participate in Loan Purchase Commitment Program and Loan Participation Purchase Program - Reminder
Posted on 07-30-2008
As July 31 approaches, we want to remind FFEL Program participants that any lender (including a school lender) that wishes to participate in either or both of the Loan Purchase Programs (the Loan Purchase Commitment Program and the Loan Participation Purchase Program) must file a “Notice of Intent to Participate” (NOI). As explained in the July 1, 2008 FederalRegister Notice that announced the programs (modified on July 17, 2008), any lender that may choose to participate in either program, or that may transfer loans it originates to other lenders that may want to participate in either program, must submit an NOI.
We stress first that an originating lender must timely file its NOI in order for the loans it originated to be eligible for either program. The Department will not purchase a loan, or a participation interest in a loan, that was first disbursed prior to the date on which the Department received the NOI from the originating lender. The only exception is that the Department will purchase loans, or interests in loans, first disbursed on or after May 1, 2008 if the originating lender’s NOI is received on or before July 31, 2008. If the NOI of the originating lender is received after July 31, 2008, the Department will purchase only those loans, or interests in those loans, for which the first disbursement was made on or after the date the Department received the NOI from that originating lender.
We also stress that a secondary market or other subsequent holder must also timely file a Notice of Intent to Participate in order to sell to the Department loans, or interests in loans, it acquires. For such a holder, both the date on which it submitted its own NOI and the date on which the originating lender submitted its NOI control which loans the holder may include in the Loan Purchase programs. First, the Department will only purchase a loan, or an interest in a loan, from a subsequent holder if the loan was acquired by that holder on or after the date the Department received that holder’s NOI. In addition, the Department will purchase such loans only if the loan was first disbursed either after the date on which the NOI of the originating lender was received, or, if the originator’s NOI is received on or before July 31, 2008, on or after May 1, 2008.
Therefore, we encourage all FFEL lenders and entities that purchase FFEL loans from originating lenders to file their Notices of Intent to Participate in a timely manner. As we have noted earlier, while the submission of a Notice of Intent to Participate does not bind the lender or holder to actually sell loans or to place loans in a participation interest facility, it does reserve those choices for both the originating lender and for any subsequent holder.
Included as an attachment to this memo is the copy of the Notice of Intent to Participate that should be completed, signed, dated and sent as a PDF attachment to an e-mail message addressed to firstname.lastname@example.org. The e-mail message subject line should read “Submission of Notice of Intent to Participate.” Of course, entities that have already submitted Notices of Intent to Participate need not re-submit.
For questions concerning the submission and receipt of the email please call (202) 377-4401.