Federal Student Aid Eligibility for Defaulting Borrowers

The above guidance applies to delinquent loans and giving assistance to eligible students before the start of the student loan moratorium (March 13, 2020). Title IV Aid under the Fresh Start Initiative. Different guidance applies when assisting a student who has defaulted after the suspension began (and before the suspension ended), who is primarily the borrower of her FFEL loan.

Non-performing FFEL Program loans held by guarantors that are not eligible for bankruptcy filing are included in “Population 2” as described in the DCL. GEN 21-03As described in that DCL, Population 2 loans are assigned to departments and are eligible immediately. Title IV assistance. However, many of these loans have not yet been assigned to a department and continue to show default status in the NSLDS while remaining with the guaranty agency.

Students who are otherwise eligible and have delinquent FFEL program loans in population 2 are eligible to receive. Title IV Aid effective March 12, 2021 (Date of DCL issued) GEN 21-03). A school receiving her ISIR indicating that the student has defaulted loans in population 2 Title IV Subject to all normal student and program eligibility requirements, provided the school maintains in the student’s file a screenshot of the NSLDS loan details showing the default date is March 13, 2020 or later. Help students. Schools should keep this. Documents 3 years after the end of the award year in which the student last attended school. In these circumstances, the method of determining the default date is the same as described in the guidance above for a student with her FFEL program loan who defaulted before March 13, 2020.

Loans in Population 2 will automatically be assigned to departments for service by the new servicer at a later date, so students do not need to sign a confirmation that the loans are transferred.

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