Lenders that wish to pay one-half of the 1-percent federal default fee on USA Funds^®-guaranteed Stafford and Grad PLUS loans under USA Funds' new federal-default-fee policy  should take the following steps.

Lenders must submit the Letter of Understanding and the appropriate disbursement-data form — either the Auto-Debit Authorization Form or Non-LFM Disbursed Data Form (see information below).

1. Complete one original of the USA Funds Federal Default Fee Letter of Understanding and list all applicable lender identification numbers. The signed Letter of Understanding must be scanned and sent via e-mail to FDF@usafunds.org . In addition, the original document must be mailed to Elaine Yednak, USA Funds lender operations manager, at the address listed below. 

2. If Lender Funds Management, commonly known as LFM, is the disbursing system for any of the listed identification numbers on which a lender is paying the federal default fee on behalf of its borrowers, the lender must complete and return the Auto-Debit Authorization Form, if one of the following conditions is true:

• The lender is not currently paying the federal default fee on USA Funds-guaranteed loans.
• The lender currently is paying the fee but wishes to include under its fee buydown borrowers who attend schools in addition to those designated by USA Funds as eligible for USA Funds' new federal-default-fee policy.
• The lender currently is paying the fee but wishes to include under its fee buydown borrowers attending only some of the schools designated by USA Funds as eligible for USA Funds' new federal-default-fee policy.

The Auto-Debit Authorization Form should be sent via e-mail to FDF@usafunds.org. In addition, the original document must be mailed to Elaine Yednak, USA Funds lender operations manager, at the address listed below. 

3. A system enhancement allows USA Funds-generated Notices of Loan Guarantee and Disclosure Statements to appropriately reflect when the federal default fee is paid by the lender or guarantor. Lenders that pay federal default fees on behalf of borrowers and use a disbursing system other than Lender Funds Management may complete the Non-LFM Disbursed Data Form to subscribe to this new service. For lenders using the LFM system, no action is needed to subscribe to this service.

The Non-LFM Disbursed Data Form should be sent via e-mail to FDF@usafunds.org. In addition, the original document must be mailed to Elaine Yednak, USA Funds lender operations manager, at the address listed below. 

4. Lenders not yet set up for federal-default-fee billing, or those that wish to change their process, should review their options.

To obtain a list of the postsecondary institutions that USA Funds has designated as being eligible for its federal-default-fee buydown, and for answers to questions about federal-default-fee billing, contact Elaine Yednak at (866) 329-7673, Ext. 1274, or Brent Dove, USA Funds lender relations director, at (866) 329-7673, Ext. 1257.

Send documents  to: Elaine Yednak, Lender Operations Manager, USA Funds, Mail Code 8524, P.O. Box 6028, Indianapolis, IN 46206-6028. If sending overnight mail, address to: 10475 Crosspoint Blvd., Suite 230, Indianapolis, IN 46256-3323.