Date: Mon Dec 03 2007 - 13:46:45 EST
FYI, I am forwarding a correction to a previous post regarding the new restrictions on collection costs.
Patrick Piper
Administrative Services Coordinator
University of Florida
University Financial Services
S-113 Criser Hall, PO Box 114050, Gainesville, FL 32611
Voice: (352) 392-0766 Fax: (352) 392-3448
ppiper@ufl.edu <blocked::mailto:ppiper@ufl.edu>
http://fa.ufl.edu/ufs/ <blocked::http://fa.ufl.edu/ufs/>
Correspondent, Florida Association of Bursars and Student Accounting Administrators (FABSAA)
http://www.fabsaa.fsu.edu <http://www.fabsaa.fsu.edu/>
The information transmitted is intended solely for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you received this email in error, please contact the sender and delete the material from your computer.
________________________________
From: Smith, Brian [mailto:Brian.Smith@ed.gov]
Sent: Monday, December 03, 2007 1:17 PM
To: Piper,Patrick G
Cc: McLarnon, Gail; Moran, Pamela; Watson, Donald; Utz, Jon
Subject: RE: [lms] Restriction on Collection Costs
My apologies, Pat. My earlier response to the question on whether the new caps on collection costs chargeable to the borrower apply to a school's internal collection efforts was incorrect. The new caps on collection costs chargeable to the borrower only apply to "loans placed with a collection firm on or after July 1, 2008". They do not apply to collection activities carried out by a school's own personnel.
We had intended the caps to apply to both internal and external collection efforts, but, as written, the regs only apply the caps to external collection efforts. We're looking into what we'll need to do to modify the regs so that the caps apply to internal collection efforts as well.
Please post this correction to the listserv.
Thanks.
Brian
-----Original Message-----
From: Piper,Patrick G [mailto:ppiper@ufl.edu]
Sent: Wednesday, November 14, 2007 10:26 AM
To: Smith, Brian
Cc: McLarnon, Gail; Moran, Pamela; Watson, Donald; Utz, Jon
Subject: RE: [lms] Restriction on Collection Costs
Brian,
Thanks for the clarification which I am sharing with the listserv. I trust that this dialogue has been mutually beneficial.
Patrick Piper
Administrative Services Coordinator
University of Florida
University Financial Services
S-113 Criser Hall, PO Box 114050, Gainesville, FL 32611
Voice: (352) 392-0766 Fax: (352) 392-3448
ppiper@ufl.edu <blocked::mailto:ppiper@ufl.edu>
http://fa.ufl.edu/ufs/ <blocked::http://fa.ufl.edu/ufs/>
Correspondent, Florida Association of Bursars and Student Accounting Administrators (FABSAA)
http://www.fabsaa.fsu.edu <http://www.fabsaa.fsu.edu/>
The information transmitted is intended solely for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you received this email in error, please contact the sender and delete the material from your computer.
________________________________
From: Smith, Brian [mailto:Brian.Smith@ed.gov]
Sent: Wednesday, November 14, 2007 9:45 AM
To: Piper,Patrick G
Cc: McLarnon, Gail; Moran, Pamela; Watson, Donald; Utz, Jon
Subject: RE: [lms] Restriction on Collection Costs
Pat,
The regs don't specify that the 30% cap is for internal collection efforts and the 40% cap is for accounts referred to collection agencies. In practice, that's how it would work out for a school that does its own collection efforts in the first year, and then refers the account to a collection agency for the second year, if needed.
But, some schools refer the account to a collection agency for first year efforts, and then refer the account to a different collection agency for second year efforts. The cap for the first year collection efforts would still be 30%, even if the account has been referred to a collection agency for those collection efforts.
Brian
-----Original Message-----
From: Piper,Patrick G [mailto:ppiper@UFL.EDU]
Sent: Tuesday, November 13, 2007 4:47 PM
To: Smith, Brian
Subject: FW: [lms] Restriction on Collection Costs
Brian,
Can you answer Karen's question? I just got off the phone with someone else that interpreted your response the same way.
Pat
Patrick Piper
Administrative Services Coordinator
University of Florida
University Financial Services
S-113 Criser Hall, PO Box 114050, Gainesville, FL 32611
Voice: (352) 392-0766 Fax: (352) 392-3448
ppiper@ufl.edu
http://fa.ufl.edu/ufs/
Correspondent, Florida Association of Bursars and Student Accounting Administrators (FABSAA)
http://www.fabsaa.fsu.edu <http://www.fabsaa.fsu.edu/>
The information transmitted is intended solely for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you received this email in error, please contact the sender and delete the material from your computer.
________________________________
From: bounce-18954288-350589@listserv.unc.edu [mailto:bounce-18954288-350589@listserv.unc.edu] On Behalf Of Derouen, Karen M
Sent: Tuesday, November 13, 2007 3:59 PM
To: LMS Mailing List
Subject: RE: [lms] Restriction on Collection Costs
Pat,
We, like you, have in-house collectors who work our Perkins loans before they are sent to a collection agency. Am I interpreting Brian Smith's response correctly? It sounds like the in-house limitation would be 30% and the 40% limit would apply to accounts subsequently sent to collection agencies after the in-house collection efforts failed. If that's the case, this would not negatively impact us because we add 33 1/3% collection fee for collection agencies regardless of whether it's the first time or second time they're sent to an agency.
Karen DeRouen
******************************************
Manager
Student Receivables/Loans
The University of Texas at Austin
Direct Number: (512)232-4063
Fax: (512)471-0212
*******************************************
This email is intended only for the party to whom it is addressed. This document may contain information that is privileged, confidential and exempt from disclosure under applicable law. Any dissemination, distribution or copying of this communication is strictly prohibited without the written consent of the University of Texas at Austin.
________________________________
From: bounce-18952622-1933023@listserv.unc.edu [mailto:bounce-18952622-1933023@listserv.unc.edu] On Behalf Of Piper,Patrick G
Sent: Tuesday, November 13, 2007 1:50 PM
To: LMS Mailing List
Cc: bursar-l@virginia.edu
Subject: RE: [lms] Restriction on Collection Costs
Colleagues:
I must say I'm a bit surprised by the lack of response to my last posting, especially considering all the comments submitted during the NPRM process. I assume everyone understands the new regulations and/or does not yet have an action plan on dealing with the new limit on collection costs and mandatory assignment requirement.
At any rate, I did receive two responses; one from Dennis at Ball State (below) and the other from Brian Smith at ED (attached). Since Brian's response provides additional guidance and answers Dennis' questions, I am attaching it for your information in addition to additional guidance from ED on my questions.
Patrick Piper
Administrative Services Coordinator
University of Florida
University Financial Services
S-113 Criser Hall, PO Box 114050, Gainesville, FL 32611
Voice: (352) 392-0766 Fax: (352) 392-3448
ppiper@ufl.edu <blocked::mailto:ppiper@ufl.edu>
http://fa.ufl.edu/ufs/ <blocked::http://fa.ufl.edu/ufs/>
Correspondent, Florida Association of Bursars and Student Accounting Administrators (FABSAA)
http://www.fabsaa.fsu.edu <http://www.fabsaa.fsu.edu/>
The information transmitted is intended solely for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you received this email in error, please contact the sender and delete the material from your computer.
________________________________
From: bounce-18709992-350589@listserv.unc.edu [mailto:bounce-18709992-350589@listserv.unc.edu] On Behalf Of Swartz, Dennis L.
Sent: Friday, November 02, 2007 9:18 AM
To: LMS Mailing List
Subject: RE: [lms] Restriction on Collection Costs
Pat,
No takers yet! Someone has to start this so here goes.
Question 1 - No impact.
Question 2 - It must be exclusive since the terms "contingency fees" and "additional expenses" do not appear in CFR 674. This is based on a search of the eCFR online.
If so, a school could contractually authorize a collection agency to assess and recover the debtor (borrower) "additional expenses" outside the realm of the "contingency fee" portion of the contract so long as the school is never billed for the "additional expenses".
This poses more questions:
Could schools have been doing this all along?
What qualifies as "additional fees?" Skip tracing? Credit bureau? Any external costs incurred by the collection agency?
Dennis
Ball State
Click here for the Office of Account Services <http://www.bsu.edu/bursar/accountservices>
Dennis L. Swartz, CTC
Fed Regs Analyst/Acct Specialist
Ball State University
Account Services
LU B7
Muncie, IN 47306 <http://maps.yahoo.com/py/maps.py?Pyt=Tmap&addr=LU+B7&csz=Muncie%2C+IN++47306&country=us>
dswartz@bsu.edu <mailto:dswartz@bsu.edu>
tel:
tel2:
fax:
765-285-5822 <http://www.plaxo.com/click_to_call?src=jj_signature&To=765-285-5822&Email=dswartz@bsu.edu>
800-446-5324 ext:4 <http://www.plaxo.com/click_to_call?src=jj_signature&To=800-446-5324+ext:4&Email=dswartz@bsu.edu>
765-285-5535
Want to always have my latest info? <https://www.plaxo.com/add_me?u=4295485453&src=client_sig_212_1_banner_join&invite=1>
Want a signature like this? <http://www.plaxo.com/signature?src=client_sig_212_1_banner_sig>
-----Original Message-----
From: bounce-18697981-115589@listserv.unc.edu [mailto:bounce-18697981-115589@listserv.unc.edu] On Behalf Of Piper,Patrick G
Sent: Thursday, November 01, 2007 4:56 PM
To: LMS Mailing List
Subject: [lms] Restriction on Collection Costs
Dear Colleagues:
The new regulations and comments are out and it seems our comments did not do a lot of good as not a whole lot of changes were made.
Although I haven't had the chance to review the entire document, one of our biggest concerns is the restriction on collection costs:
Sec. 674.45 Collection procedures.
* * * * *
(e) * * *
(3) For loans placed with a collection firm on or after July 1,
2008, reasonable collection costs charged to the borrower may not
exceed--
(i) For first collection efforts, 30 percent of the amount of
principal, interest, and late charges collected;
(ii) For second and subsequent collection efforts, 40 percent of
the amount of principal, interest, and late charges collected; and
(iii) For collection efforts resulting from litigation, 40 percent
of the amount of principal, interest, and late charges collected plus
court costs.
The current regulation does not define "reasonable" costs:
(e)(1) Subject to §674.47(d), the institution shall assess against the borrower all reasonable costs incurred by the institution with regard to a loan obligation.
The new regulation defines "reasonable" and restricts the amount that can be assessed against the borrower. Unless your contract with your collection agencies fits under the new restrictions, this will result in charging the difference to the Perkins loan fund, thus reducing the funds that could have been lent to students. Not good.
My questions to schools that have contracts with fees that do not fit under the new restrictions:
1. What is your plan of action? Will you be seeking new contracts with lower fees that will assure that your loan fund is "made whole"? Will your current agencies adjust their fees to keep your business? Will this result in increased assignments for your school?
2. What is your interpretation of the following comment posted today with the final regulations:
With regard to contingency fees, the Department is not abandoning
the make whole rate for Perkins Loan collections. The Department does
not regulate the establishment of fees in a contract between a Perkins
Loan Program school and a collection agency. However, institutional
contracts must provide for the recovery to the Perkins Loan Fund of the
outstanding balance of the loan. Since a collection agency incurs
additional expenses associated with collecting these amounts, the
school may authorize the collection agency to also recover these
expenses from the borrower.
My question regards that last sentence. I assume the "additional expenses" are still subject to the new limits, but the "also" suggests that these amounts are exclusive to amounts collected under the new limits.
Any thoughts? The final regulations with comments can be reviewed at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/07-5332.htm
Patrick Piper
Administrative Services Coordinator
University of Florida
University Financial Services
S-113 Criser Hall, PO Box 114050, Gainesville, FL 32611
Voice: (352) 392-0766 Fax: (352) 392-3448
ppiper@ufl.edu
Correspondent, Florida Association of Bursars and Student Accounting Administrators (FABSAA)
The information transmitted is intended solely for the person(s) or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon this information by persons or entities other than the intended recipient is prohibited. If you received this email in error, please contact the sender and delete the material from your computer.
-----Original Message-----
From: bounce-18568896-350589@listserv.unc.edu [mailto:bounce-18568896-350589@listserv.unc.edu] On Behalf Of Terry Kell
Sent: Friday, October 26, 2007 2:24 PM
To: LMS Mailing List
Subject: RE: [lms] Response to NPRM (August 13 2007)
Penny,
We will not see the compiled comments and response to same until the final rules are published. That could be next week.
If you want to see the 402 comments that the department cataloged:
Go to http://www.regulations.gov/fdmspublic/component/main
1-select ALL DOCUMENTS
2-drop down DEPT of EDUCATION
3-drop down PROPOSED RULES
SUBMIT
(Click on) ED-2007-OPE-0133 (far left column)
Terry Kell
University of Wisconsin-Madison
608-263-7100
-----Original Message-----
From: bounce-18567242-310293@listserv.unc.edu
[mailto:bounce-18567242-310293@listserv.unc.edu] On Behalf Of Penny Becker
Sent: Friday, October 26, 2007 11:59 AM
To: LMS Mailing List
Subject: [lms] Response to NPRM
Does anyone know in which Federal Register the comments and answers to the August 2007 NPRM can be found? I know I should be able to find it on IFAP but I'm not having any luck. Thanks.
--
Penny Becker
Univ of Northern Iowa
Office of Business Operations
1148 Campbell Hall
Cedar Falls, IA 50614-0008
Phone: (319)273-3539
Fax: (319)273-3009
CONFIDENTIAL: The information contained in this email communication is confidential information intended only for the use of the addressee.
Unauthorized use, disclosure, or copying of this communication is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return email and destroy all copies of this communication, including all attachments.
============================================================
To post to the LMS List, send email to: lms@listserv.unc.edu ============================================================
Access the LMS List from the web at http://listserv.unc.edu
You are currently subscribed to lms as: terry.kell@finaid.wisc.edu.
To unsubscribe send a blank email to
leave-18567242-310293.ef7cfcaaea6ea310337ec28d0b2494f8@listserv.unc.edu
============================================================
To post to the LMS List, send email to: lms@listserv.unc.edu
============================================================
Access the LMS List from the web at http://listserv.unc.edu
You are currently subscribed to lms as: dswartz@bsu.edu.
To unsubscribe send a blank email to leave-18697981-115589.458fe73e73a357182f9948119939d87c@listserv.unc.edu
============================================================
To post to the LMS List, send email to: lms@listserv.unc.edu
============================================================
Access the LMS List from the web at http://listserv.unc.edu <http://listserv.unc.edu/>
You are currently subscribed to lms as: ppiper@ufl.edu.
To unsubscribe send a blank email to leave-18709992-350589.37f82f1a38eeb42e72ef321b00ca5e98@listserv.unc.edu
============================================================
To post to the LMS List, send email to: lms@listserv.unc.edu
============================================================
Access the LMS List from the web at http://listserv.unc.edu <http://listserv.unc.edu/>
You are currently subscribed to lms as: oa.kderouen@austin.utexas.edu.
To unsubscribe send a blank email to leave-18952622-1933023.7440272128644db6385d2a107228f0c5@listserv.unc.edu
============================================================
To post to the LMS List, send email to: lms@listserv.unc.edu
============================================================
Access the LMS List from the web at http://listserv.unc.edu <http://listserv.unc.edu/>
You are currently subscribed to lms as: ppiper@ufl.edu.
To unsubscribe send a blank email to leave-18954288-350589.37f82f1a38eeb42e72ef321b00ca5e98@listserv.unc.edu
Bursar-l Archives: http://fa1.finadmin.virginia.edu/bursar/
Subscribe or Unsubscribe: https://list.mail.virginia.edu/mailman/listinfo/bursar-l
