Dear School Partners: 

New Mexico Student Loans will no longer be originating FFELP loans due to the changes to the student loan program that are part of the Health Care and Education Reconciliation Act http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf of 2010 signed by the President on March 30, 2010.

Email your questions to: answers@nmstudentloans.org. There will also be a toll free number which will allow you to connect directly with the Marketing Department (1-866-761-9991). Borrowers can continue to call the Customer Service toll free number  (1-800-279-3070).   PLEASE NOTE:  day-to-day business questions should be addressed to the numbers normally used.

Business Partner - Questions & Answers

Q. Now that NMSL knows that FFELP has been eliminated, and NMSL is losing origination of future loans, will loans be PUT to DOE for 2009-2010 Award Year?
A. NMSL doesn’t have plans to PUT loans at this time.  However, we are evaluating our finances and are in the process of finalizing details for permanent financing.  

Q. What will happen to the borrower benefits that NMSL had committed to borrowers whose loans disbursed prior to June 30, 2009?
A. New Mexico Student Loans evaluates all incentive programs on a yearly basis to ensure that funding is available. No changes will be made to the program this year; however changes may be made in the years to come.

Q. With the decision to move originations to Direct Loans (and to eliminate FFELP completely), will NMSL still be able to secure funding for all remaining disbursements for the 2009-2010 award year?
A. NMSL has committed to making disbursements until June 25, 2010 on loans that are approved by June 18, 2010.

Q. Will SLIM still be released for 2009-2010 award year?
A. At this time SLIM has been put on hold

Q. What will happen to all the loans that are currently in-grace with NMSL?
A. Nothing will change; we will continue to service the loans until they are paid in full.

Q. What will happen to all the loans that are in repayment at NMSL?
A. NMSL will continue to service the loans until the loans are paid in full

Q. Will NMSL be prepared to serve as consultants as we make the switch from FFELP to Direct Loans?
A. As long as the DOE approves the funding proposal to train schools in the transition to Direct Lending, NMSL will serve as consultants.

Q. What will be the future of NMSL?
A. NMSL will service the remaining student loan portfolio for many years to come. Other business opportunities are being explored that would allow us to continue to serve the residents of New Mexico. We will work diligently to secure a contract with the Department of Education to service Direct Loans for New Mexico students and to provide outreach, financial literacy and default prevention services.

Q. What will happen to the rest of our student loan portfolio?
A. NMSL will continue to service the loans until the loans are paid in full.

Q. Will our portfolio be sold ASAP, possibly to DOE?
A. NMSL does not intend to sell its student loan portfolio.

Q. Will we still have the fall training conference?
A. It is unknown at this time as to what DL servicers will be allowed to do for DOE servicing contracts.

Q. How should school employees contact NMSL with questions regarding the transition to Direct Loans?
A. Two toll free numbers are set up: one for borrowers to call into (1-800-279-3070) and another for the financial aid community to connect directly with the Marketing Department (1-866-761-9991). Calls will be screened and passed to appropriate leadership and/or marketing staff.

Q. What additional ways will NMSL communicate vital information about the changes?
A. The website Questions & Answers sections for Borrowers and School Partners will be updated as additional questions arise. The following email address will be available for borrowers, schools and business partners to send us their questions: answers@nmstudentloans.org. Emails will receive responses within 24 hours.

Q. What are the primary differences between Direct Loans and the Federal Family Education Loan Program (FFELP)?
A. The primary difference is the source of the loan funding. Direct Loans come straight from the U. S. Department of Education using funds obtained from the U.S. Treasury.

Q. When will ALL Stafford, PLUS, and Consolidation loans be originated using the Direct Loan program?
A. All Stafford, PLUS, and Consolidation loans made on or after July 1, 2010 will be Direct Loans.

Q. When would NMSL stop making loans?
A. The latest a loan under the FFEL Program will be guaranteed will be June 18, 2010 with the final disbursements to be made by June 25, 2010.

Q. Some Perkins Loans borrowers currently use Mapping Your Future (MYF) to do entrance/exit counseling. How do the changes to the FFEL program and elimination of the NMSL pre-app affect this program?
A. Borrowers that use Mapping Your Future get to the link via MYF and not a link from NMSL. The changes at NMSL will not affect the borrowers’ ability to reach the link. Schools and students should still continue to contact Mapping Your Future for any issues having to do with Perkins entrance/exit counseling.

Q. Will NMSL encourage all your borrowers to consolidate with DL?
A. No, as a lender. NMSLGC has no control if loans are consolidated since this process is borrower driven.

Q. Will NMSL continue to offer alternative loans? If so, which alt loans will you still offer?
A. NMSL is not offering alternative loans at this time because of the current financial market environment. When the financial markets improve, NMSL will start offering Linc alternative loans once again.

Q. Will NMSL continue to offer services to schools such as Entrance/Exit counseling sessions, retention workshops, financial literacy workshops, default prevention services and high school night presentations?
A. We will be offering these services if provided the opportunity by DOE.

Q. How do we respond to borrower questions? Will students have to call DOE?
A. The burden has shifted to students – the servicers’ role now is only to do due diligence. Schools will now be responsible for answering borrower questions.

Q. How will the loans be assigned to DL servicers?
A. 3 million borrower accounts - current servicers
     100,000 borrower accounts - non profits
      It is unclear at this time what methodology DOE will use.

Q. Who are the four current Direct Lending servicers?
A. Nelnet, Sallie Mae, PHEAA, Great Lakes

Q. How long will it take for NMSL to become a servicer for Direct Lending?
A. DOE will determine the date. NMSL should be ready by 7/1/2010, if given the opportunity.

Q. Will servicers offer us representatives for compliance and regulations questions and answers?
A. We will be offering these services if provided the opportunity by DOE.