Loan Discharges and the "Hardship" Forbearance Just
Got Simpler
by Kathy Cathcart, Customer Service Manager, WSLC
It's hard to believe that we would ever see these two words paired together: "Regulation Simplification". Great strides were made by members of the student loan community to simplify many processes that impact our WSLC FFELP customers.
Two simplifications rise to the top of the list for their positive impact on our FFELP customers: changes to the disability or death discharge for spousal consolidation loans and hardship forbearance.
- Spousal consolidation loans may be partially discharged due to the death or total and permanent disability of one of the loan's co-makers. The portion of the loan eligible for discharge is the amount outstanding for the co-maker who is disabled or who has died. This is available regardless of the date on which the consolidation loan was made or the date the discharge condition was met.
- WSLC is no longer required to obtain a signed agreement for hardship forbearance. We are now able to make verbal arrangements with customers to process this forbearance. An approval letter mailed to the customer outlines the terms of the agreement, such as the next payment due and interest capitalization, significantly speeding up the process.
There are also helpful changes to the unemployment deferment. Written certification, or an approved equivalent such as verification of unemployment benefits, is now acceptable proof that a customer is seeking fulltime employment. No more completing the six places in section (D) of the deferment form. This was often the most challenging information to get from customers.
The list of regulations that were simplified is lengthy. Because we believe "simpler is better" for customers, WSLC will implement the simplified regulations in February, prior to the mandatory July 2003 deadline. An internal review of our procedures and how they can improve is already completed and under final review by WSLC's compliance department.
For additional details regarding Regulation Simplification, FFELP regulations or WSLC procedures please contact Kathy Cathcart or Janet Tilton at (800) 999-6541, or visit our Web site www.wslc.com.
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