Posted Date:January 13, 2012
|Author:||William Leith, Service Director, Program Management, Federal Student Aid|
Subject: Special Direct Consolidation Loan Information - Federal Loan Servicer Contact Will Begin On/About January 17, 2012
Through a series of communications, we have informed the financial aid community about the availability of the Special Direct Consolidation Loan opportunity the Department of Education (the Department) will offer to eligible borrowers through the William D. Ford Federal Direct Loan (Direct Loan) Program. This short-term special consolidation opportunity will be available to eligible borrowers from January 17 – June 30, 2012.
As we announced in our December 28, 2011 Electronic Announcement on the Information for Financial Aid Professionals (IFAP) Web site, the Special Direct Consolidation Loan online application will be available to potentially eligible borrowers beginning on January 17, 2012. For the most current high-level summary of the Special Direct Consolidation Loan opportunity, refer to the December 28th announcement.
In this announcement, we want to remind the community that one of four federal loan servicers will contact each potentially eligible borrower and provide the borrower with online application instructions. The four servicers are FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae.
As previously explained, FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae will begin communicating with potentially eligible borrowers at the time the online application becomes available on January 17, 2012. We know everyone is anxious for borrowers to be contacted by one of the four servicers about the Special Direct Consolidation Loan opportunity. As we begin the application period, we remind the community that there are a number of potentially eligible borrowers who must be contacted and that it will take time to make all contacts. We have an organized plan in place for completing borrower contact and appreciate the community’s patience as we implement it.
Our plan for federal loan servicer contact with borrowers who are potentially eligible for the Special Direct Consolidation Loan opportunity is as follows:
- We will assign potentially eligible borrowers to one of the four servicers in a manner that supports our goal to have all of a borrower's ED-held (also referred to as Department-held) loans serviced by one federal loan servicer.
- Due to the number of borrowers that will be assigned to each of the four servicers, the initial communication with potentially eligible borrowers will occur over a several-week period.
- We will assign potentially eligible borrowers to the four servicers in two phases.
Phase One – In the first phase, we will assign potentially eligible borrowers who currently have FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, or Sallie Mae as their federal loan servicer. The start date for this phase is January 17, 2011.
Phase Two – In the second phase, we will assign potentially eligible borrowers who currently have the Direct Loan Servicing Center (ACS) as their federal loan servicer. We will inform the community of the start date for this phase in a subsequent Electronic Announcement.
For the most part, the four servicers will communicate with the potentially eligible borrowers assigned to them through correspondence that is mailed via the U.S. Postal Service and/or e-mailed to borrowers’ e-mail addresses on file with the servicer. As a reminder, our federal loan servicers have e-mail addresses and Web site URLs that use the “.com” or “.org” domain (as opposed to the “.gov” domain).
In the correspondence, the servicer will explain the steps the borrower must complete to apply for a Special Direct Consolidation Loan. In addition, the servicer will provide the URL for the borrower to use to access and complete the online application.
Note: In our next communication, we will provide screenshots of the online application. This resource will allow the community to view the online application that potentially eligible borrowers will complete.
- After a potentially eligible borrower has been contacted by one of the four servicers, that servicer will become the borrower’s primary point of contact for questions and information related to the Special Direct Consolidation Loan opportunity. Each communication the borrower receives from the servicer will include the servicer’s contact information.
In addition to the assistance a borrower will receive from the federal loan servicer, the borrower will be able to request assistance when completing the online application. Information about how to obtain assistance with the online application will be available within the Web site.
We continue to look forward to offering the Special Direct Consolidation Loan opportunity to eligible borrowers. As we begin the actual application period (January 17 – June 30, 2012), we thank the financial aid community again for its support of this initiative.
We will continue to keep the community informed through subsequent “Special Direct Consolidation Loan Information” Electronic Announcements on the IFAP Web site (and on the Financial Partners Portal Web site when applicable).
Borrower information is available on our Special Direct Consolidation Loans Web page.