November 5, 2009

Do You Know the Answer?

Effect of PUT Loans on Annual and Aggregate Loan Amount Calculations

Did you know that loans that are PUT to the U.S. Department of Education (ED) by a lender are not edited on OGSLP’s system for annual and aggregate loan amount calculations?

ECASLA provisions enacted during the economic downturn allowed lenders to sell loans to ED to free up capital to make more loans. What is important to understand about this specific option is that when the loans are sold (or PUT) to ED, the loan is no longer maintained by the lender, servicer or guarantor.

Similar to the process that underlying loans go through in a consolidation, these loans are not included in our system edits when reviewing annual and aggregate loan limits and overlapping loan periods. It will be very important for schools to use resources such as NSLDS to validate loan limits. A PUT loan can be identified by an assigned code in NSLDS. The Oklahoma Lender Advisory Council created a chart to help easily identify ECASLA codes used by ED for this purpose.

If you have questions, contact your OGSLP School and Lender Support Services Representative at 800.247.0420 (toll-free) or SchoolAndLenderSupportServices@ogslp.org.