CBA Joint Comment Letter to Department of Education Regarding Federal Loan Programs

Dear Ms. Finkel:

As the trade associations representing the majority of student loan providers (guaranty agencies, lenders and servicers) in the Federal Family Education Loan Program (FFELP), and having had colleagues act as negotiators during the 2012 negotiated rulemaking sessions for the “Loan Issues” committee, we write to express our appreciation for the opportunity to contribute to this essential process. We are also pleased that consensus was reached.

Since reaching consensus on the proposed regulatory package, our members have continued to review and analyze the language as published in the July 29th Notice of Proposed Rulemaking (NPRM). Given the importance of loan rehabilitation and the need to ensure a process that helps borrowers succeed rather than creating additional complexities and other unintended negative consequences, we offer a revised Financial Disclosure for Reasonable and Affordable Rehabilitation Payments for the Department’s consideration. Our comments also reflect our understanding of the operational details associated with these proposed regulations since we did not have the opportunity to have those discussions during the negotiated rulemaking sessions. We look forward to continuing the dialogue with the Department regarding the operational issues associated with these new provisions.

Based on our discussions and upon further review of the topics discussed by the negotiators, we provide the attached clarifying responses. We also request the Secretary to authorize voluntary and early implementation of the following borrower-friendly provisions.

  •  Forbearance for borrowers who are 270 or more days delinquent prior to guaranty agency default claim payment or transfer by the Department to collection status - 34 CFR 682.211(d) and 685.205 
  • Forbearance provisions for borrowers receiving Department of Defense student loan repayment benefits - 34 CFR 682.211(h) and 685.205 
  • Borrowers who are delinquent when an authorized forbearance is granted - 34 CFR 682.211(f) and 685.205

To read the full Comment Letter, download the PDF.