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APR - 5 1993 To: Lenders Participating in the Health Education Assistance Loan (HEAL) Program Subject: HEAL Application
and Manifest Data Editing Criteria 1. The HEAL program is revising the calculation of the academic year loan amount ceilings as described in the HEAL Application Editing Criteria, Lender Policy Memorandum 92-5, dated May 8, 1992, based on a concern by schools and lenders that the current methodology does not recognize academic years which are approximately nine-months, as "complete" academic years. Therefore, in order to accommodate these institutions and remedy this situation, the following calculation should be used: Determine the number of days in an academic year by calculating the difference between the "Academic Year From" and the "Academic Year To" fields. That number is divided by 30 to determine the number of months. The remaining days are prorated on a half month basis, such that 15 days or less is rounded to the next lower month and 16 days or more is rounded to the next higher month. For example, 7 months and 10 days would be calculated as 7 months, and 7 months and 20 days would be calculated as 8 months. In the instance where the number of months is equal to or greater than 8 (240 days) and equal to or less than 9 (270 days), the borrower is given credit for a full 9-month allocation. This allocation would be $20,000 or $12,500 depending on the borrower's discipline as described in the Editing Criteria. If the number of months is greater than 9, the allocation would continue to be calculated as described above. Please refer to the attached chart to determine the maximum loan amount allowed based on length of academic year. 2. Section 708(c) of the Health Professions Education Extension Amendment of 1992 provides that, lenders shall reduce by 50 percent the risk-based premium to eligible borrowers, if a credit-worthy cosigner cosigns a HEAL loan. In order that the HEAL program may account for all loans with cosigners and reduced insurance premiums, it is requested that lenders use the enclosed revised HEAL application tape specifications. If the borrower has a cosigner, column 322 of the tape specifications should indicate a "Y", otherwise it should remain blank. There are no other changes to the tape specifications. We have also modified error numbers 44 and 23 of the Application and Manifest Editing Criteria, respectively to accommodate new insurance premium calculations that are now based on the school's risk category, as well as the disbursement amount. The current error messages refer only to an 8 percent insurance premium calculation. Attached are replacements for pages 7, 9, 12, and 15 of the HEAL Lender Policy Memorandum 92-5 that reflect this text modification. If you have any questions regarding this policy memorandum, or need a copy of HEAL Lender Policy Memorandum 92-5, please call Ms. Jennifer Dozier of the HEAL Branch (301) 443-1540. Michael Heningburg | ||||||||||||||||||||||||||||||||||||
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