Printer-friendly
Adobe .pdf
MAR 6 1996
To: Schools and Lenders
Participating in the Health Education Assistance Loan (HEAL) Program
Subject: Fiscal Year
(FY) 1996/1997 HEAL Insurance Authority Allocations by Lender and Discipline
Lender Policy Memorandum L-96-6
School Policy Memorandum S-96-6
Purpose
The purpose of this
memorandum is to notify the HEAL community which lenders will receive
the balance of FY 1996 HEAL insurance authority beginning July 1, 1996
and FY 1997 HEAL insurance authority beginning October 1, 1996.
Background
The Division of Student
Assistance (DSA) changed the FY 1996/1997 HEAL allocation process so that
(1) early notification of insurance authority would be made to schools,
lenders, and borrowers, and (2) our process would be synchronized to that
of the academic year of most schools, (i.e., July 1 through June 30).
As was the case in FY 1996, insurance authority in FY 1997 will only cover
loans made to previous HEAL borrowers.
Approach
The methodology used
to determine which lenders successfully bid for and will be given a FY
1996/1997 insurance authority, included ranking lenders on cost-to-the-borrower
and constructing "bands" of lenders that had costs within $650
of each other.
FY 1996/1997 contracts
will cover a full 12 month period and straddle two fiscal years. The initial
FY 1996/1997 contracts will cover 3 months from July 1, 1996 through September
30, 1996. DSA will allocate any remaining FY 1996 insurance authority
by discipline to these lenders. If a discipline has no remaining insurance
authority an allocation for that discipline will not be made. On or about
October 1, 1996 the FY 1996/1997 contracts will be amended to cover the
period through June 30, 1997 and will include insurance authority appropriated
by Congress for FY 1997. This insurance authority will be allocated to
the lenders according to the above methodology.
Outcome
Tables 1 and 2 display
lender requests and rank the lenders according to the cost-to-the-borrower.
The $650 bands are also depicted. Allopathic and Osteopathic Medicine
allocations were determined using the costs reflected in Table 1. The
remaining discipline allocations are based on the costs reflected in Table
2. Table 3 displays each FY 1996/1997 lender, address, telephone number,
the discipline(s) they will service, any geographic restrictions, and
their interest rates and terms. Every lender that has an insurance authority
allocation through June 30, 1996 will be participating July 1, 1996 through
June 30, 1997. Two lenders will join this group of lenders. They are Dartmouth
Educational Loan Corporation and PNC Bank. Household Bank, Mellon Bank,
and Vermont Student Assistance Corporation will lower their interest rates
starting July 1, 1996. Interest rates and terms for all the other lenders
will not change.
Thank you for participating
in the FY 1996/1997 HEAL insurance authority allocation process. If you
have any questions regarding this policy memorandum please contact Terri
Ehrenfeld of the HEAL Branch at (301) 443-1540.
Stephen J. Boehlert
Associate Director, HEAL
Division of Student Assistance
|