Publication Date: July
2005
DCL ID: CB-05-11
Subject: New Process
for Federal Perkins Loan Program Default Reduction Assistance Program
Summary: This letter provides
information on changes to the process by which schools participate in the Default
Reduction Assistance Program.
Posted on 07-07-2005
Dear Colleague:
The Default Reduction Assistance
Program (DRAP) assists schools in bringing defaulted Federal Perkins Loan (Perkins
Loan) borrowers into repayment. Specifically, we mail a letter, using the Department
of Education's (the Department's) letterhead, to a borrower identified by a
school as being in default on repayment of a Perkins Loan. This letter informs
the Perkins Loan borrower of the serious consequences of default and encourages
him or her to contact the school to initiate repayment arrangements.
The intent of the DRAP
is to get the defaulted Perkins Loan borrower back into repayment before the
account goes to a collection agency. Therefore, a school should not request
this service once the account has been referred to a collection agency. DRAP
service is usually provided during the 30-day period when the school is waiting
for the defaulted borrower to respond to the final demand letter.
Participation in the DRAP
is at no cost to a school and is completely voluntary. Participation in this
program may significantly reduce the number of defaults and the cohort default
rate for the school.
To improve the DRAP for
schools, we will be implementing changes to the DRAP process. These changes
will eliminate the need for a school to manually request a DRAP package, create
a DRAP file, and send the file to the Department via the Student Aid Internet
Gateway (SAIG). The questions and answers that follow explain the new fully
electronic DRAP process.
Q1: What changes will
be made to the DRAP process?
A1: The DRAP process,
and its related functions, will be initiated via the eCampus-Based (eCB) Web
site. Under the new process, a school or its third party servicer will log in
to the eCB Web site and enter information about borrowers who have defaulted
on their Perkins Loans. The information may be entered for each borrower or
it may be uploaded from a file. Following submission of this information, a
letter will be printed and mailed by the Department to each borrower. As explained
above, the letter will be printed on the Department's letterhead and will encourage
the borrower to contact the school to initiate repayment arrangements.
Q2: When will the new
electronic DRAP process begin?
A2: The new DRAP
process is expected to begin in late July 2005. Until then, a school or its
third party servicer may continue to submit borrower data using the current
process. However, we strongly encourage schools and third party servicers to
hold any data not submitted by July 13, 2005, until the new process is available.
Q3: How do we access
DRAP on the eCB Web site?
A3: To access the
DRAP section of the eCB Web site, log in to the eCB Web site at www.cbfisap.ed.gov,
and then select the "DRAP" link on the top navigation bar. From that
point, you will follow the instructions for performing the identified functions.
Q4: What are some of
the features of the new electronic DRAP process?
A4: A school or
its third party servicer will be able to do the following:
1) Maintain borrower information;
2) Edit DRAP contact information
without the Department's intervention;
3) Update borrower information,
such as his or her address;
4) Run a report that assists
in monitoring the letters mailed to borrowers;
5) Run a report that assists
in tracking the total number of letter requests submitted;
6) Determine when a letter
was mailed by the Department; and
7) Determine if a letter
was returned to the Department as "undeliverable" and if an address
has been determined to be invalid.
Q5: What will happen
when a letter mailed to a borrower is returned as "undeliverable"
to the Department?
A5: Through the
DRAP, we will send only one letter to a particular address. A school will be
informed in the DRAP section of the eCB Web site of all letters determined to
be "undeliverable." Following this determination, the school or its
third party servicer can update the borrower's address with a more current address.
After a different address has been submitted by the school or the third party
servicer, a second letter will be mailed to the borrower.
Q6: What if we do not
have an updated address for a borrower?
A6: Another program
offered at no cost to a Perkins Loan school is the IRS Skiptracing Program.
Its function is to provide schools with updated addresses for borrowers who
may have relocated. A school must contact Rhonda Herbert by e-mail at Rhonda.Herbert@ed.gov
to become a participant in this program.
Q7: What if we have
additional questions about the new electronic DRAP process?
A7: For additional
information about the new DRAP process, contact the Campus-Based Call Center
at 877/801-7168. Customer service representatives are available Monday through
Friday from 8:00 A.M. until 8:00 P.M. (ET).
We look forward to working
with schools under the new DRAP process.
Sincerely,
Kathleen Wicks, Acting
Director
Campus-Based Systems and Operations Division
Federal Student Aid
Attachments/Enclosures:
CB-05-11:
New Process for Federal Perkins Loan Program Default Reduction Assistance Program
in PDF Format, 3.02MB, 3 pages
