Loan Purchase and Participation Programs

The Ensuring Continued Access to Student Loans Act (ECASLA) was signed into law on May 7, 2008. ECASLA provided the Department with new authority to purchase FFELP loans. In DCL GEN-08-08, the Department outlined two programs to address the liquidity concerns for lenders.

Below SLGFA has provided a Q and A of some frequently asked questions about the PUT Program.

What is the Department of Education's PUT Program?
The PUT program is a tool to provide a short-term solution to create liquidity for lenders and to ensure that eligible students and parents continue to receive FFELP loans. Lenders fund and hold loans until they are sold (PUT) to the Department of Education.

When can lenders transfer loans to the PUT program?
Lenders can PUT loans any time after they are fully disbursed and before September 30 of the applicable year.

Does ownership of PUT loans transfer to the Department of Education?
Yes. Ownership of PUT loans transfer to the Department of Education on the purchase date; however, borrowers will be able to use their MPNs for subsequent FFELP loans.

Will PUT loans retain an SLGFA guarantee?
No. The guarantee on PUT loans will transfer to the Department of Education.

Once a loan is PUT, who will service the loan?
PUT loans are serviced by the Department of Education servicers:

Who should borrowers and schools contact if they have questions about a loan that has been PUT?
Borrowers and schools should contact the appropriate Department of Education's servicer at the numbers listed below. Schools and lenders can refer to this electronic announcement for additional contact information. 

Will borrowers be notified when their loans are PUT?
Yes. The Department of Education's servicer notifies the borrower, guarantor, and NSLDS when a loan has been PUT.

Can loan increases or reinstatements continue to be made on loans scheduled to be PUT?
Increases and/or reinstatements can no longer be made, 13 days prior to the anticipated PUT date of the loan.

What does a school do if it determines that an increase or reinstatement needs to occur within the 13-day lockdown period?
Schools will need to certify a new loan.

Where should post PUT loan adjustments be made?
Post PUT loan adjustments should be forwarded to the appropriate Department of Education's servicer.

ACS:
Department of Education
P.O. Box 7063
Utica, NY 13504-7063

Sallie Mae:
Department of Education
P.O. Box 740351
Atlanta, GA 30374-0351

PHEAA:
Department of Education
P.O. Box 530210
Atlanta, GA 30353-0210

Great Lakes:
Department of Education
P.O. Box 530229
Atlanta, GA 30353-0229

Nelnet:
Department of Education
P.O. Box 740283
Atlanta, GA 30374-0283

If SLGFA is the disbursing agent, schools should forward any adjustments to SLGFA's Lender Funds Department, just as they do now. SLGFA will forward the funds to the Department of Education or the designated servicer. If SLGFA is not the disbursing agent, schools are advised to verify with the entity that disbursed the funds to ascertain their procedures.

Will the SLGFA guarantor system still be able to edit for loan limits on borrowers with PUT loans?
No. SLGFA's guarantor system will no longer be able to edit for annual, grade level, or aggregate loan limits for borrowers with loans that have been PUT. Once a loan has been posted as being PUT and transferred out (TRO) on the guarantor system, the loan is no longer included in the system editing when determining borrower eligibility on a guarantee and change transaction level. This includes processing loan certification for guarantee and processing post-guarantee adjustments such as loan increases and reallocations.

How will loans that have been PUT appear on NSLDS?
Loans that have been PUT will reflect the following information on the NSLDS Loan History page:

Look for additional articles in future E-Updates on how these programs will affect you and your students.