PDF Higher Education Student Assistance Authority Defaulted FFELP ...

Higher Education Student Assistance Authority

Defaulted FFELP Policy and Procedures Manual

For Law Firms

August 2018

TABLE OF CONTENTS

Purpose................................................................................................................................................ 1 Account Placements............................................................................................................................ 1 Account Transfers............................................................................................................................... 2 Administrative Review Requests ........................................................................................................ 2 Administrative Wage Garnishment (AWG) ....................................................................................... 2 Administrative Wage Garnishment Hearings ..................................................................................... 3 Appellate Work................................................................................................................................... 3 Application for Discharge by a Borrower........................................................................................... 4 Application of Payments..................................................................................................................... 4 Attorney Meeting ................................................................................................................................ 5 Bankruptcy.......................................................................................................................................... 5 Business Continuity/Disaster Plans .................................................................................................... 6 Collection Cost Rate Change .............................................................................................................. 6 Complaints .......................................................................................................................................... 6 Compliance ......................................................................................................................................... 7 Compromise/Write-offs ...................................................................................................................... 7 Credit Bureau Reporting ..................................................................................................................... 7 Data Loss ? Data Breach .................................................................................................................... 7 Deposits .............................................................................................................................................. 7 Direct Payment Reporting .................................................................................................................. 9 Discharge Due to Death ...................................................................................................................... 9 Discharge Due to Total and Permanent Disability ........................................................................... 10 Due Diligence ................................................................................................................................... 10 Electronic Payment File.................................................................................................................... 10 Forbearance....................................................................................................................................... 11 HESAA System Access .................................................................................................................... 11 Interest Accrual................................................................................................................................. 11 Law Firm Fees .................................................................................................................................. 12 Loan Consolidation ........................................................................................................................... 13 Lawsuits ............................................................................................................................................ 13

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Non-Compliance ............................................................................................................................... 13 Notifications ..................................................................................................................................... 13 Office Site Visits............................................................................................................................... 14 Offset Appeals .................................................................................................................................. 14 Paid-in-full Accounts ........................................................................................................................ 14 Privacy of Borrower's Information................................................................................................... 15 Reconciliation of Law Firm Portfolios ............................................................................................. 15 Records Retention ............................................................................................................................. 15 Refunds ............................................................................................................................................. 16 Remittance Reporting ....................................................................................................................... 16 Requests for Information .................................................................................................................. 16 Retaining Other Attorneys ................................................................................................................ 17 Return of Portfolio ............................................................................................................................ 17 Returned Items .................................................................................................................................. 17 Reviews by HESAA Staff................................................................................................................. 17 Status Reporting................................................................................................................................ 18 Tax Information ................................................................................................................................ 18 Statute of Limitations........................................................................................................................ 19 Termination....................................................................................................................................... 19 Third Party Vendors.......................................................................................................................... 19

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Purpose

This manual comprises the policies and procedures that law firms retained by the Higher Education Student Assistance Authority ("HESAA") to recover monies owed to HESAA or its clients and to protect the interests of HESAA. While this manual is a component of the retainer agreement between each law firm and HESAA, law firms should not rely upon this manual to provide interpretation of Federal or State laws or regulations. As HESAA's legal representation, it is each firm's duty to provide interpretations of Federal and State laws, rules and regulations for its client, HESAA.

Account Placements

Accounts are assigned to various law firms by HESAA based upon the firm's overall performance factors. Operational and/or compliance issues may preclude the assignment of accounts in order to protect the Federal fiscal interest and the interests of HESAA.

At the time of placement, HESAA shall provide the law firm with a copy of the borrower's account summary screen. This screen provides the current outstanding account balance and the underlying components. The screen also contains the demographic information related to the borrower. Included in the referral packet are the borrower's payment history to-date, a copy of the claim payment to a lender and a copy of the promissory note(s).

Upon receiving new accounts, the law firm shall load the accounts onto the law firm's system within five business days, or the amount of business days specified in the law firm's retainer agreement. Interest shall accrue from the date shown on the borrower's account summary screen provided by HESAA. The date of assignment is obtained from the account summary screen. At the time HESAA refers the account to the firm, the law firm's system becomes the system of record for this account and the law firm shall provide an acknowledgement letter, email or report to HESAA confirming the amount of the balance as well as the date that the account and balance were loaded onto the law firm's system.

Within five (5) days of placement of a debt with the law firm, the law firm shall send a written notification to the borrower. The notification shall contain at a minimum the following information:

1. The amount of the debt. 2. That the debt was placed by New Jersey Higher Education Student Assistance

Authority (HESAA) with the law firm. 3. The type of debt that has been placed, e.g. student loan.

This letter must meet borrower notification requirements under the Fair Debt Collections Act.

If the receivable is placed by the law firm with an associate law firm during the first thirty calendar days an additional thirty calendar days is permitted before the notification is sent to the individual(s). The notification requirement is not waived if a law firm is unable to place the receivable with an associate law firm within thirty calendar days of placement.

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If the law firm has questions and/or concerns regarding the placement, they need to be forwarded to HESAA's Recovery Support Section.

Account Transfers

If HESAA recalls or reassigns the receivable, the receivable shall be closed by the law firm and returned to HESAA. The law firm shall not be entitled to any future fees on monies received from the individual. The law firm shall obtain a copy of the payment history from HESAA and reconcile the individual's payment history to HESAA's system records to verify that all payments/adjustments have been properly posted prior to transferring the file. At the time the matter is closed, the following information shall be forwarded to HESAA:

? A copy of all pleadings; ? A copy of the judgment; ? A copy of the Statement of Docketing (if applicable); ? Collection history; ? Payment history showing the application of payments between interest, judgment and

costs; ? Substitution of attorney ? Exemplified judgment (if this is an out of state transfer) ? Documents provided at time of assignment ? The account balance (with a breakdown of the various components) at the time of return; ? Any correspondence; and ? The borrower's demographic information

In the event that an account is closed due to discharge of the debt based on Total and Permanent Disability, bankruptcy or mandatory assignment, the file is to be returned to HESAA with the documents listed above.

Administrative Review Requests

In the event that a borrower requests an administrative review, the law firm shall contact HESAA to provide the borrower with the necessary form. The law firm shall continue attempting to collect on the account. Once HESAA has completed the review, HESAA will advise both the borrower and the law firm of the outcome.

Administrative Wage Garnishment (AWG)

AWG shall only be initiated by HESAA, the guaranty agency, to collect student loan debt. A law firm may request that HESAA initiate AWG for a receivable placed with the firm where the firm is unable to obtain a judicial garnishment or when it is more expedient to use AWG. The use of AWG shall not weaken or hinder HESAA's ability to litigate against other parties to the loan(s) subject to AWG. In the event that a law firm requests that HESAA initiate AWG, and there is an

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