Posted Date:September 4, 2009
Author: William Leith, Service Director, Program Management, Federal Student Aid
Subject: Federal Perkins Loan Default Reduction Assistance Program (DRAP)
The Default Reduction Assistance Program (DRAP) assists schools in bringing defaulted Federal Perkins Loan (Perkins Loan) borrowers into repayment. Specifically, we mail a letter, using the Department of Education's letterhead, to a borrower identified by a school as being in default on repayment of a Perkins Loan. This letter informs the Perkins Loan borrower of the serious consequences of default and encourages him or her to contact the school to initiate repayment arrangements.
The intent of DRAP is to get the defaulted Perkins Loan borrower back into repayment before the account goes to a collection agency. Therefore, a school should not request this service once the account has been referred to a collection agency. DRAP service is usually provided during the 30-day period when the school is waiting for the defaulted borrower to respond to the final demand letter.
Participation in DRAP is at no cost to a school and is completely voluntary. Participation in this program may significantly reduce the number of defaults and the cohort default rate for the school.
The following questions and answers serve as a reminder and explain the fully electronic DRAP process.
Q1: How is the DRAP process initiated?
A1: All related functions of the DRAP process are initiated via the eCampus-Based (eCB) Web site. A school or its third party servicer logs in to the eCB Web site and enters information about borrowers who have defaulted on their Perkins Loans. The information may be entered for each borrower or it may be uploaded from a file. Following submission of this information, a letter will be printed and mailed by the Department to each borrower. As explained above, the letter will be printed on the Department's letterhead and will encourage the borrower to contact the school to initiate repayment arrangements.
Q2: How do we access DRAP via the eCB Web site?
A2: To access the DRAP section of the eCB Web site, log in at www.cbfisap.ed.gov and then select the "DRAP" link on the top navigation bar. From that point, follow the instructions for performing the identified functions.
Q3: What are some of the features of the electronic DRAP process?
A3: A school or its third party servicer will be able to do the following:
- Maintain borrower information
- Edit DRAP contact information without the Department's intervention
- Update borrower information, such as his or her address
- Run a report that assists in monitoring the letters mailed to borrowers
- Run a report that assists in tracking the total number of letter requests submitted
- Determine when a letter was mailed by the Department
- Determine if a letter was returned to the Department as "undeliverable" and if an address has been determined to be invalid
Q4: What will happen when a letter mailed to a borrower is returned as "undeliverable" to the Department?
A4: The Department will send only one DRAP letter to each address provided by a school. “Undeliverable” letters are returned to the Department where they are logged into the eCB DRAP module along with the reason they were returned. Schools will need to log in periodically to review and print reports of undeliverable letters. Schools are encouraged to provide updated addresses. When an address is updated, the DRAP letter is resent.
Q5: Can schools also use the IRS Skip Trace Service to locate Perkins Loan borrowers?
A5: No. At this time the IRS Skip Trace Service is only available to guaranty agencies in the Federal Family Education Loan (FFEL) program.
Note: The eCB DRAP module home page currently indicates that the IRS Skip Trace Service is available. This information is inaccurate and will be updated in the next revision to the eCB Web site.
For questions about the DRAP process, contact the Campus-Based Call Center at 877/801-7168. Customer service representatives are available Monday through Friday from 8:00 A.M. until 8:00 P.M. (ET). You may also e-mail CBFOB@ed.gov.