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DISCHARGE LOANS DUE TO DEATH, DISABILITY,
BANKRUPTCY, ETC.
A borrower's obligation to repay a loan may be canceled
due to death, total and permanent disability, bankruptcy or
other specified reasons. Agencies may require a contractor to
perform some or all of the tasks associated with discharging
loans. Agencies may issue task orders that include requirements
for this service which contains services similar to the those
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.
When required, agencies may issue task orders
that include the discharge of loans which may require, but are
not limited to the following types of tasks:
- The contractor may be required to write off designated loans
in accordance with agency loan regulations.
- The contractor may be required to review, approve (based
on specific agency guidelines), and image all documentation
related to the cause for the loan discharge.
- The contractor may be required to report the loan cancellation
and the reason to an agency’s central database within a specified
time period. The contractor may be required to provide the
borrower or the borrower's executor (in the case of a cancellation
due to death) with written confirmation stating that the obligation
to repay the debt(s) has ended.
- Within a specified time period of receiving notification
that is not sufficient to write off a loan, the contractor
may be required to obtain proper documentation which sufficiently
justifies the loan discharge.
- After the contractor has proof that a loan discharge is
warranted, the contractor may be required to not make any
other attempts to collect on the loan from the borrower, cancel
the remaining loan obligation, and generate the appropriate
transactions to the agency’s central database.
- The contractor may be required to return any payments received
from or paid on behalf of the borrower (including payments
made by a cosigner) in accordance with agency procedures as
specified in the task order.
LOAN CONSOLIDATION
Agencies may require a contractor to perform some or all
of the tasks associated with the consolidation of loans for
the loans being serviced by the contractor. Agencies may issue
task orders that include requirements for this service which
contains services similar to the those 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.
When required, agencies may issue task orders
that include the consolidation of loans which may require, but
are not limited to the following types of tasks:
- The contractor may be required to fully comply with the
regulatory requirements for servicing loans in an agency program.
- Some Federal loan program borrowers can obtain consolidation
loans from lenders to pay off their loans. When applicable,
the contractor may be required to provide requested information
to the agency or the loan origination contractor on loans
borrowers may wish to consolidate that are serviced by the
contractor. The contractor may also be required to explain,
upon borrower request, loan consolidation options available
to borrowers for consolidating their federal loans.
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