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Necessity of Information Collection
The Ensuring Continued Access to Student Loans Act of 2008 (Pub. L. No. 110-227) (the ECASLA), which was signed into law on May 7, 2008, amended the Higher Education Act of 1965, as amended (the HEA) by adding a new Section 459A that provides the U.S. Department of Education (the Department) with temporary authority to purchase student loans from Federal Family Education Loan (FFEL) Program lenders. This is one of several authorities that the ECASLA provided to the Department in order to address concerns about the availability of student loans under the FFEL Program.
Section 459A of the HEA provides that the Secretary of Education, the Secretary of the Treasury, and the Director of the Office of Management and Budget must jointly determine the terms and conditions of the loan purchase program. Public Law 110-350, signed into law on October 7, 2008 extends the timeframe for the Secretary’s student loan purchase authority to September 30, 2010.
The documents included with this submission explain the terms and conditions of the program and collect information from FFEL Program lenders related to their interest in participating in the loan purchase programs. Additionally, collection of information to specifically support a lender’s request that the Department purchase FFEL loans or participation interests in loan facilities is required. Such information includes details of the lender’s funding request and the loans that provide support for the request.
The web page http://federalstudentaid.ed.gov/ffelp/ contains information on the Loan Purchase Programs as well as all forms and data formats for participation in the program.
Purpose and Use of Information Collected
The documents associated with this collection are as follows:
Notice of Intent to Participate - Submitted to the Department’s Federal Student Aid office (ED/FSA) by FFEL lenders that wish to establish eligibility to participate in the loan purchase programs. The submission will be used by ED/FSA to establish the lender’s loan purchase eligibility date. The Notice of Intent to Participate is included as Exhibit H in the Master Participation Agreement and as Exhibit F in the Master Loan Sale Agreement. These agreements are described below.
Master Participation Agreement – Submitted by FFEL lenders to ED/FSA to establish the legal relationships and contractual conditions of the lenders’ participation in the “Loan Participation Purchase Program”.
Master Loan Sale Agreement - Submitted by FFEL lenders to ED/FSA to establish the legal relationships and contractual conditions of the lenders’ participation in the “Loan Purchase Commitment Program”.
Operational Documents – Submitted by FFEL lenders to ED/FSA to request purchase of loans or interest in loans under the loan purchase programs and to provide loan level documentation to support such requests. These documents are included as attachments to this Supporting Statement.
Consideration of Improved Information Technology
The information will be submitted as follows:
1. Notice of Intent to Participate - Submitted electronically as a PDF attachment to an email to ED/FSA by FFEL lenders that wish to establish eligibility to participate in the loan purchase programs. The Notice of Intent to Participate is included as Exhibit H in the Master Participation Agreement and as Exhibit F in the Master Loan Sale Agreement.
2. Master Participation Agreement Adoption Forms – Submitted in paper form by FFEL lenders and participation custodians that wish to execute a Master Participation Agreement with the Department. Since the Agreement creates a binding contract between multiple parties it must be executed with “pen and ink” signatures.
3. Master Loan Sale Agreement Adoption Forms - Submitted in paper form by FFEL lenders and participation custodians that wish to execute a Master Participation Agreement with the Department. Since the Agreement creates a binding contract between multiple parties it must be executed with “pen and ink” signatures.
4. Operational Documents – Submitted by FFEL lenders and participating custodians to ED/FSA. Requests for funds will be in paper format because of the need for “pen and ink” signatures. Supporting loan information will be submitted using secure electronic formats.
Efforts to Identify Duplication
There is no information available from other sources that could be used for the purposes described in Item 2.
Burden Minimization as Applied to Small Businesses
No small businesses are affected by this information collection.
Consequences of Less Frequent Data Collection
Without this collection of information, it would not be possible for the Department to administer the loan purchase programs described in Item 1.
Special Circumstances Governing Data Collection
With two exceptions, this information collection does not involve any of the conditions listed in 5 CFR 1320.5(d)(2). Respondents may be required to report information more than quarterly in order to document ongoing student loan activity related to the loan purchase program. In addition, record retention requirements may exceed three years in some cases based on FFEL Program regulatory requirements.
Consultations Outside the Agency
In developing the documents associated with this collection, the Department worked closely with the Department of the Treasury, the Office of Management and Budget, and FFEL Program lenders. The Department will also publish the appropriate Federal Register notices inviting public comment.
Payments or Gifts to Respondents
No payments or gifts will be provided to respondents.
Assurance of Confidentiality
Loan level data for the Master Loan Sale Agreement will be collected and held in the Federal Family Education Loan Servicing System that is included under the Common Services for Borrowers System of Record Notice, number 18-11-16. Loan level data for the Master Participation Agreement will be collected and held in the Financial Management System with the System of Record Notice, number 18-11-17.
Questions of a Sensitive Nature
The documents associated with this collection do not require respondents to provide any information that would be considered sensitive.
Annual Hour Burden for Respondents/Recordkeepers
The total estimated number of respondents for this information collection is 2,085. The total estimated annual reporting hour burden is 26,980 hours, calculated as follows:
1. Notice of Intent to Participate – [MPA Exhibit H, MLSA Exhibit F] Action Order 1 on chart below
Estimated Number of Respondents = 1,000 FFEL lenders. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 1,000. Notice of Intent only needs to be filed once for the duration of the program.
Burden Hours per Response = 1 hour. Includes time for lender review, internal consultation, form completion, and submittal.
Total Burden Hours = 1,000 hours.
2. Master Participation Agreement Adoption Forms– [MPA Exhibits A, E, F] – Action Order MPA 1 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Only FFEL lenders that will place at least $50 million can participate). These are a subset of the 1000 FFEL lenders.
Number of Responses = 50. The agreement only needs to be executed once for the duration of the program.
Burden Hours per Response = 20 hours. Includes time for lender review, including senior management and counsel, internal consultation, form completion, compiling attachments and submittal.
Total Burden Hours = 1,000 hours.
3. Master Loan Sale Agreement Adoption Forms – [MLSA Exhibits A, C, D] – Action Order MLSA 1 on chart below
Estimated Number of Respondents = 100 FFEL lenders. Expected number of FFEL lenders that will sell loans to the Department. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program. These are a subset of the 1000 FFEL lenders.
Number of Responses = 100. The agreement only needs to be executed once for the duration of the program.
Burden Hours per Response = 12 hours. Includes time for lender review, including senior management and counsel, internal consultation, form completion, and submittal.
Total Burden Hours = 1,200 hours.
4. Master Loan Sale Agreement 2007-2008 Forms – [MLSA Exhibits A, C, D] – Action Order 07-08 MLSA 1 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders that will sell loans to the Department. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 50. The agreement only needs to be executed once for the duration of the program.
Burden Hours per Response = 3 hours. Includes time for lender review, including senior management and counsel, internal consultation, form completion, and submittal.
Total Burden Hours = 150 hours.
5. Operational Documents – Master Participation Agreement – Only those who have completed the Master Participation Agreement can complete any of the documents below.
Rolling Monthly Forecast - Action Order MPA 2 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders who will sell participation interests to the Department. Estimate based upon minimum activity requirement (not less than $50 million), community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 600. Monthly reporting requirement is one submission per month.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports that are submitted electronically.
Total Burden Hours = 600 hours.
Funding Request [MPA Exhibits B, C, D, G] – Action Order MPA 3a on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders who will sell participation interests to the Department. Estimate based upon minimum activity requirement (not less than $50 million), community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 1,250. Frequency depends upon lender need for funding, its business processes, and its internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 2,500 hours.
Loan Schedule and Custodial Certification Data File – Includes Personally Identifiable Information - Action Order MPA 3b on chart below
Estimated Number of Respondents = 50 FFEL lenders.
Number of Responses = 1,250. Frequency depends upon lender need for funding, its business processes, and its internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports that are submitted electronically.
Total Burden Hours = 2,500 hours.
Monthly Aggregate Settlement Date Report – Action Order MPA 4a on chart below
Estimated Number of Respondents = 50 FFEL lenders.
Number of Responses = 600. One submission for each month.
Burden Hours per Response = 1 hour. This report is a variation of the funding request schedules and the custodian will only need to make minor adjustments to the process that it uses for those reports. This report is submitted electronically.
Total Burden Hours = 600 hours.
Monthly Loan Schedule - Includes Personally Identifiable Information – Action Order MPA 4b on chart below
Estimated Number of Respondents = 50 FFEL lenders.
Number of Responses = 600. One submission for each month.
Burden Hours per Response = 2 hours. This report is a variation of the funding request schedules and the custodian will only need to make minor adjustments to the process that it uses for those reports. This report is submitted electronically.
Total Burden Hours = 1,200 hours.
Estimated Number of Respondents = 15 FFEL lenders.
Number of Responses = 15. Agreement only needs to be executed once for the duration of the program.
Burden Hours per Response = 10 hours. Includes time for lender review, including senior management and counsel, form completion, compiling documents and submittal.
Total Burden Hours = 150 hour.
5. Operational Documents - Master Loan Sale Agreement - Only those who have completed the Master Loan Sales Agreement can complete any of the documents below.
Estimated Number of Respondents = 100 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 2,000. Frequency depends upon lender need for funding, its business processes, the 45 day notice requirement, and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports that are submitted electronically.
Total Burden Hours = 4,000 hours
Estimated Number of Respondents = 100 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 2,000. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports that are submitted electronically.
Total Burden Hours = 4,000 hours.
Bill of Sale and Loan Schedule Summaries [MLSA Exhibit B] – Action Order MLSA 4a on chart below
Estimated Number of Respondents = 100 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 2,000. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 2,000 hours.
Schedule of Loan – Contains Personally Identifiable Information – Action Order MLSA 4b on chart below
Estimated Number of Respondents = 100 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 2,000. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports that are submitted electronically.
Total Burden Hours = 4,000 hours.
Security Release Certification [MLSA Exhibit E] – Action Order MLSA 4c on chart below
Estimated Number of Respondents = 30 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 600. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 600 hours.
Notice of Assignment and Designation of Payee – Action Order MLSA 4d on chart below
Estimated Number of Respondents = 20 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 400. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 400 hours.
Operational Documents - Master Loan Sale Agreement
Offer to Sell Form – Action Order 07-08 MLSA 2 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 200. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 400 hours.
Bill of Sale [MLSA Exhibit B] – Action Order 07-08 MLSA 3 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 200. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 200 hours.
Security Release Certification [MLSA Exhibit E] – Action Order 07-08 MLSA 4 on chart below
Estimated Number of Respondents = 20 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 80. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 1 hour. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 80 hours.
Loan Purchase Commitment Program Loan Transfer/Conversion File – Action Order 07-08 MLSA 5 on chart below
Estimated Number of Respondents = 50 FFEL lenders. Expected number of FFEL lenders who will sell loans to the Department, either directly or when closing a participation interest facility. Estimate based upon community input and other indicators of the number of lenders who want to preserve their right to participate in the Loan Purchase Program.
Number of Responses = 200. Frequency depends upon lender need for funding, its business processes and the lender’s internal capacities related to how long it can carry loan financing without ED support.
Burden Hours per Response = 2 hours. Assumes that, after initial start-up, the lender has developed an automated process for these reports.
Total Burden Hours = 400 hours.
Affected Entities: Private Sector
Totals:
# Respondents = 2,085 # Responses = 15,195 # Annual Hour Burden = 26,980
On the table below, the Electronic Announcements include the instruments used to gather data either in forms requiring signatures or in data formats to provide individual and aggregate loan information. The Action Order identifies the order that participants must complete the forms and formats to utilize the Loan Purchase Program.
Action Order |
Electronic Announcement # - Name [Instruments] |
Action |
Estimated # of Respondents |
Number of Responses |
Burden Hours/ Response |
Total Burden Hours |
1 |
EA9 – Notice of Intent to Participate |
File Notice of Intent to Participate |
1,000 |
1,000 |
1 hour |
1,000 |
Master Participation Agreement (MPA) 2008-2009 and Operational Documents
Under the Loan Participation Purchase Program (Master Participation Agreement), the Department purchases “participation interests” in FFEL loans. Generally, the lender transfers the title to the loan to an unrelated entity, the Custodian. The transferred loans are place in a “participation facility” under the control of the Custodian. The Custodian sells a participation interest in the loans to the Department on behalf of the lender. The Department buys the participation interest by providing the Custodian with funds equal to the disbursed amounts of the loans. The Custodian provides those funds to the lender, giving liquidity to the FFEL lender specifically and the FFEL Program generally.
Action Order |
Electronic Announcement # - Name [Instruments] |
Action
|
Estimated # of Respondents |
Number of Responses |
Burden Hours/ Response |
Total Burden Hours |
MPA1
|
EA8 – Loan Purchase Agreements
EA10 – Initial Document Submission Instructions |
Execute Master Participation Agreement (MPA) [Exhibits A, E, F] Follow instructions for document submission |
50 |
50 |
20 hours |
1,000 |
MPA2 |
EA15 – Monthly Rolling Forecast Reporting Process |
File Rolling Monthly Forecast |
50* |
600 |
1 |
600 |
MPA3a |
EA8 - Loan Purchase Agreements
EA16 – Revised Document Submission Process |
File Funding Request/Actual Sale of Interest in Loans [Exhibits B, C, D, G] Follow instructions for data submission |
50* |
1,250 |
2 |
2,500
|
MPA3b |
EA16 - Revised Document Submission Process |
File Loan Schedule Custodial Cert. Data File (PII) |
50* |
1,250 |
2 |
2,500 |
MPA4a |
EA17 - Monthly Aggregate Settlement Date Report Submission Procedures EA29 – Loan Participation Monthly Reporting and Payment Remittance Procedures |
File Monthly Aggregate Settlement Report
Follow procedures for reporting data and filing for payment |
50* |
600 |
1 |
600 |
MPA4b |
EA16 - Revised Document Submission Process EA29 - Loan Participation Monthly Reporting and Payment Remittance Procedures |
File Monthly Loan Schedule (PII)
Follow procedures for reporting data and filing for payment |
50* |
600 |
2 |
1,200 |
MPA4c |
EA14 – Document Submission Instructions for Banks Wishing to Perform as Custodians EA16 - Revised Document Submission Process EA20 – Loan Schedule and Custodial Certification Table Load Procedures |
File forms for Custodian Approval
Submit Custodial Certification
Follow prescribed table load procedures |
15* |
15 |
10 |
150 |
* = These actions can only be taken if the respondent has completed MPA1.
Action Order |
Electronic Announcement # - Name [Instruments] |
Action
|
Estimated # of Respondents |
Number of Responses |
Burden Hours/ Response |
Total Burden Hours |
MLSA1 |
EA8 - Loan Purchase Agreements
EA23 – Initial Document Submission for the Loan Purchase Commitment Program |
Execute Master Loan Sale Agreement (MLSA) [Exhibits A, C, D] Follow instructions for document submission |
100 |
100 |
12 hours |
1,200 |
MLSA2 |
EA23 - Initial Document Submission for the Loan Purchase Commitment Program |
File 45-Day Notice of Intent to Sell Loans & Projected Loan Schedule Summary of Loans to Be Sold |
100* |
2,000 |
2 |
4,000 |
MLSA3 |
EA27 – Loan Purchase Commitment Program Loan Transfer/Conversion File |
File Loan Transfer/Conversion File (PII) |
100* |
2,000 |
2 |
4,000 |
MLSA4a |
EA26 – MLSA Bill of Sale Submission Instructions |
Instructions for Filing Bill of Sale/Loan Schedule Summary [Exhibit B] |
100* |
2,000 |
1 |
2,000 |
MLSA4b |
EA26 – MLSA Bill of Sale Submission Instructions |
Schedule of Loans (PII) |
100* |
2,000 |
2 |
4,000 |
MLSA4c |
EA26 – MLSA Bill of Sale Submission Instructions |
Security Release Certification [Exhibit E] |
30* |
600 |
1 |
600 |
MLSA4d |
EA26 – MLSA Bill of Sale Submission Instructions |
Notice of Assignment and Designation of Payee |
20* |
400 |
1 |
400 |
* = These actions can only be taken if the respondent has completed MLSA1.
Under the Short-term Purchase Program, the Department is extending the offer to purchase fully disbursed loans made for the 2007-2008 academic year. The Department agrees to purchase loans for 97 percent of the total of the outstanding principal balance, plus accrued but unpaid interest as of the purchase date. The lender completes the “Offer to Sell” and the lender and Department work to finalize the roster of loans to be sold and the purchase price. Thus liquidity is provided to the FFEL lender specifically and to the FFEL Program generally.
Action Order |
Electronic Announcement # - Name [Instruments] |
Action
|
Estimated # of Respondents |
Number of Responses |
Burden Hours/ Response |
Total Burden Hours |
07-08 MLSA1 |
EA36 – Master Loan Sales Agreement for 2007-2008 Short-Term Purchase Program
EA37 - Initial Document Submission Instructions |
Execute Master Loan Sale Agreement (MLSA) [Exhibits A, C, D]
Follow instructions for document submission |
50 |
50 |
3 hours |
150 |
07-08 MLSA2 |
EA38 – “Offer to Sell” Pursuant to MLSA 2007-2008 Short-Term Purchase Program |
Submit “Offer to Sell” form |
50 |
200 |
2 hours |
400 |
07-08 MLSA 3 |
EA36 – Master Loan Sales Agreement for 2007-2008 Short-Term Purchase Program
EA39 – Submission of Bill of Sale and Data Files for Loan Sales under the 2007-2008 Short-Term Purchase Program |
File Bill of Sale [Exhibit B] |
50 |
200 |
1 hour |
200
|
07-08 MLSA 4 |
EA36 – Master Loan Sales Agreement for 2007-2008 Short-Term Purchase Program
EA39 – Submission of Bill of Sale and Data Files for Loan Sales under the 2007-2008 Short-Term Purchase Program |
Security Release Certification [Exhibit E] |
20 |
80 |
1 hour |
80
|
07-08 MLSA 5 |
EA27 – Loan Purchase Commitment Program Loan Transfer/Conver-sion File
EA39 – Submission of Bill of Sale and Data Files for Loan Sales under the 2007-2008 Short-Term Purchase Program |
File Loan Transfer Conversion forms
Instructions for Submitting Bill of Sale and Loan Detail File and Borrower Benefit Data File. |
50 |
200 |
2 hours |
400 |
Annual Cost Burden to Respondents
There are no annual capital/startup costs to respondents, nor are there any annual costs to respondents associated with operating or maintaining systems or purchasing services.
Estimated Annual Cost to the Federal Government
See ED/OMB costs estimates included in other documents related to these programs.
Reasons for Changes to Burden Hour Estimated
The burden hours are based primarily on the development of new forms required since the initial collection projections.
Collection of Information with Published Results
The results of this information collection will not be published.
Approval Not to Display Expiration Date
The Department is not seeking this approval.
Exceptions to the Certification Statement
The Department is not requesting any exceptions to the “Certification for Paperwork Reduction Act Submissions” of OMB Form 83-I.
This information collection does not employ statistical methods.
| File Type | application/msword |
| File Title | Supporting Statement |
| Author | epjutz |
| Last Modified By | doritha.ross |
| File Modified | 2008-12-19 |
| File Created | 2008-12-19 |