Communications Provide Additional Details on Short-Term Consolidation Program
Communications issued this month offer additional insight on the Special Direct Consolidation Loan Program, which began Jan. 17.
The Special Direct Consolidation Loan Program aims to help eligible borrowers manage their debt by ensuring that all of their federal loans are serviced by the same entity.
- In a Jan. 13 Electronic Announcement, the U.S. Department of Education reports that one of four federal loan servicers will contact each eligible borrower — primarily by U.S. mail or email — and provide the borrower with online application instructions starting with the first phase of contact, which began on Jan. 17.
- On Jan. 18 the Department issued an Electronic Announcement indicating that federal loan servicers are contacting borrowers who are eligible for the Special Direct Consolidation Loan Program. The announcement outlines borrowers’ point of contact, the online application process, and post-application steps.
- Dear Colleague Letter FP-12-01, issued Jan. 20, provides the newly approved Loan Verification Certificate that Federal Family Education Loan Program lenders and loan holders must use when certifying loan information for borrowers who choose to use this consolidation program. The letter also offers guidance to FFELP lenders about the Loan Verification Certificate and how to use the form.
These latest communications about the short-term loan program join earlier announcements on the topic from the Department — Oct. 26, Nov. 23 and Dec. 28. The National Council of Higher Education Loan Programs and Student Loan Servicing Alliance also produced a question-and-answer document about the program.