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CONVERT LOANS TO REPAYMENT STATUS
For some Government loans, a borrower is not required to
make any payments (although a borrower may choose to make interest
payments on certain unsubsidized loans) during the time the
borrower is in deferment status (e.g. Stafford school loans).
When the borrower no longer meets the requirements for no-payment,
a grace period begins during which no payments are required
(although a borrower may choose to make interest payments on
certain unsubsidized loans). At the end of the grace period,
the repayment period begins. For other Government loans, the
repayment period begins immediately on disbursement of the loan.
The first payment on a loan is customarily due from the borrower
within a specified time period (a grace period) after the loan
is fully disbursed.
Agencies may issue task orders that include
requirements for loan conversion services which are similar
to the services described below. A task order may require any
combination of these services. These services illustrate some
of the types of tasks that the contractor may be required to
perform under this contract, but this is not intended to be
an all inclusive list. Rather, it illustrates the types of services
a contractor may provide. Agencies may issue task orders for
servicing these loans requiring, but not limited to, the following
types of tasks
- The contractor may be required to identify loans entering
the grace period through status changes provided by an agency’s
central database, borrowers, or other sources.
- If the contractor has not been notified by the borrower
of the repayment option chosen, the contractor may be required
to notify the borrower that it provides loan counseling
and repayment information specific to the borrower. The
contractor may be required by some agencies to use text
for this letter and repayment information approved by the
ordering agency.
- Provide a repayment schedule to the borrower by a specified
time period before the grace period ends which contains
the disclosure of repayment information. In disclosing the
borrower's repayment schedule, the contractor may be required
to use the repayment option chosen by the borrower, if applicable,
or if none was chosen, use the standard repayment option
required by regulations.
- Prior to the loan's first payment due date, the contractor
may be required to provide the borrower a billing statement
based on the repayment schedule previously disclosed unless
an alternate repayment schedule has been negotiated with
the borrower. In addition to loan counseling and repayment
options information, the contractor may be required to provide
borrowers with default prevention notices by a specified
time period from the beginning of the grace period, as frequently
throughout the grace period as specified in an agency's
request, or if the agency did not define, as frequently
as required.
- Prior to the loans first payment due date or at times
specified thereafter, the contractor may be required to
contact the borrower or otherwise facilitate the borrower’s
compliance with the loan repayment terms.
- For any loan which is deferred for any reason and for
loans in forbearance, the contractor may be required to
provide a repayment schedule at a specified time before
the deferment or forbearance ends. Prior to the first payment
due date, the contractor may be required to provide the
borrower a billing statement.
- The contractor may be required to provide loan counseling
upon borrower request and respond to borrowers' telephone
or written inquiries.
- The contractor may be required to provide alternative
repayment plans at the borrower's request. Alternative repayment
plans are designed to meet the borrower's needs, yet must
meet any prescribed regulations and Government program policy
guidelines.
- The contractor may be required to notify the borrower
to confirm the agreed upon repayment plan. As provided for
in the applicable loan regulations, some borrowers have
the option of changing repayment plans at any time.
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