November 9, 2010

PUT Loan Guidance

The Department of Education (ED) provided a March 26, 2010 e-announcement about the process schools should follow to reduce the amount of FFELP loans PUT to ED.

Previously, schools were instructed to first contact the lender and then forward the loan adjustment information to the servicer of the loan. If that process was problematic, the school was to forward the adjustment to ED’s lockbox.

Now, ED’s updated procedures allow schools to return those funds directly to the federal loan servicers (PHEAA, Great Lakes, Nelnet and Sallie Mae) instead of back to the original lender. More details about the procedures can be found in the Oct. 19, 2010 e-announcement.