PUT the Pieces Together
by Dana Kelly, Regional Director, Nelnet Partner Solutions
Through the Ensuring Continued Access to Student Loans Act (HR 5715) the Department of Education (ED) created the Loan Purchase Commitment Program. This program granted ED the authority to purchase eligible Federal Family Education Loan Program (FFELP) loans from lenders, thereby freeing up funds for lenders to make new loans during the capital markets disruption.
Loans that have been purchased are considered “PUT” and become ED-owned loans. The final phase of eligibility for this program affects Stafford, PLUS, and GradPLUS loans made during the 2009-2010 academic year that are fully disbursed by September 30, 2010. As of July 2010, both PUT loans and Direct Loans now reside on the servicing platforms of the Title IV Additional Servicers (TIVAS). With multiple servicers in the mix, it is important for schools to understand the types of loans a student may hold, as well as the designated servicer(s) for those loans.
PUT loans have been and will continue to be assigned to one of the four TIVAS. Add the original Direct Loan servicer (ACS) to the mix, and there are five potential players in the servicing arena. Schools do not have the option of choosing a servicing partner. Keep in mind that once a loan is sold (PUT loans), the original lender and/or guarantor are no longer the contact for the school; the assigned servicer assumes management of all aspects of the loan.
Servicer assignments are made for PUT loans when the sale of the loan to ED is complete. Servicer assignments for Direct Loans are made after the first disbursement of the loan. Schools will need to determine which servicer(s) has been assigned to their respective students. This information can be accessed via NSLDS or any specific servicer’s reporting tool. There is no centralized method for the return of funds for PUT loans. The return of funds must go through the specific servicer’s ED-assigned lockbox (an address unique to each servicer).
The borrower is also impacted when a loan is PUT due to the possibility of a servicer change. If that occurs, a paper “Welcome Letter” notifies the borrower of the change in loan ownership. Students should be counseled to utilize NSLDS if there are questions pertaining to the ownership of their loan(s). Keep in mind that combined billing is not an option for students who hold both ED-owned and commercially owned FFELP loans. In this situation, split servicing is a possibility. ED can only assign a student’s ED-owned loans to a single servicer; ED has no authority over commercially owned FFELP loans with regard to servicing.
The following information will assist you in determining which of the TIVAS are servicing your students’ loans. NSLDS will reflect the following information:
GUARANTOR
577 U.S. DEPARTMENT OF EDUCATION
578 DEPT OF ED/SALLIE MAE
579 DEPT OF ED/AES PHEAA
580 DEPT OF ED/NELNET
581 DEPT OF ED/GREAT LAKES
582 DEPT OF ED/TPD
SERVICER
700577 U.S. DEPT OF ED/STUDENT LOAN SERVICING (ACS)
700578 DEPT OF ED/SALLIE MAE
700579 DEPT OF ED/PHEAA
700580 DEPT OF ED/NELNET
700581 DEPT OF ED/GREAT LAKES
ECASLA LENDER CODES
899577 US DEPT OF ED/2008-2009 LPCP
898577 US DEPT OF ED/2007-2008 STPP
897577 US DEPT OF ED/2009-2010 LPCP
895577 US DEPT OF ED/ABCP 09-10
896577 US DEPT OF ED/REHABS
894577 US DEPT OF ED/REHAB LPP
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Servicer-specific contact information for schools is provided below.
Nelnet
1.866.463.5638
FedLoan Servicing (PHEAA)
1.800.655.3813
Great Lakes Educational Loan Services
1.888.686.6919
Sallie Mae
1.888.272.4665
ACS
1.866.938.4750
Anytime there are questions surrounding any ED-owned loans, schools should not hesitate to contact the respective servicer for more information.
Dana Kelly, Southern Regional Director (KY, NC, SC, TN, VA)
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