Posted Date:May 18, 2010
|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. The DRAP letter reminds defaulted borrowers of the consequences of default including: inability to obtain other federally supported financial assistance due to the outstanding debt, withholding of Federal and State Income Tax refunds, salary garnishment, and damage to credit history.
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 updated information provides user information and tips for successful processing in the fully electronic DRAP process.
Accessing and Initiating the DRAP Process
All related functions of the DRAP process are accessed via the eCampus-Based (eCB) Web site. 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.
To initiate the process, 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.
If a servicer that submits DRAP data on behalf of a school does not also provide FISAP services for the school, the servicer must be granted read-only access to the FISAP.
Features of the electronic DRAP Process
A school or its third party servicer will be able to do the following:
- Submit borrower information for letters to be printed and mailed
- Maintain borrower information
- Edit DRAP contact information without the Department's intervention
- 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
Address Information and Undeliverable Mail
The DRAP system will only accept physical addresses for borrowers to be contacted. P.O. Boxes will not be accepted.
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.
If a new address for the borrower is discovered before the letter is sent, the school must contact the Campus-Based Call Center to report that a change is needed. The school or servicer must then submit a new print request with the updated information so the letter will be sent to the correct borrower address.
IRS Skip Trace Service Not Available for Perkins Loans
The eCB DRAP module home page at the eCB Web site currently indicates that the IRS Skip Trace Service is available help to schools resolve delinquent Perkins Loans. This information is inaccurate; the IRS Skip Trace Service is not available for Perkins Loans. We will update this information in the next revision to the eCB Web site.
File Upload Limitations
Each file upload must be limited to 1000 borrowers. However, there is no limit to the number of uploads submitted by a school.
For additional information about DRAP, contact the Campus Based Call Center at 877/801-7168. Customer service representatives are available Monday through Friday from 8:00 a.m. to 8:00 p.m. (ET). You may also email CBFOB@ed.gov.