The special code master file was created to establish descriptions/definitions for each special code. In the DOS system, end users would enter special codes on borrower's accounts and then the user would be reassigned to another position at the school. The new user coming in wouldn't have any idea what the special codes meant. On the Windows version there is a description associated with every special code.

The "setup special codes" button will allow the user to add, change or delete a special code from the master special code list. ECSI reserves 13 special codes for internal use, so every school has the ability to use 37 of their own special codes. ECSI's 13 reserved special codes cannot be changed or deleted. The change button will let the user change the description of the special code. The delete button will allow the user to delete the special code out of the master special code list and will also search all borrower's accounts and remove any special codes that match the code that was deleted.

The "assign individual" button (displayed on page 1) allows the user to assign one, some or all loans to a particular special code. The left side of the window will display the fund type, current special code, new special code, loan balance and months past due for all loans. The right side of the window will display all of the available special codes (with descriptions) that the user may assign to any loan(s). To add or change a special code on a borrower's account, click on the fund type that you wish to change. Then click on the special code that you want applied to the chosen fund type. Before you have saved your changes (clicking on the accept button), if you decide you don't want to accept the changes, either click on the "X" button or the undo button. Change all loans button will allow the user to change all of the loans for a borrower to a particular special code, with 1 click. If a borrower had 5 loans, the user could click on all 5 loans and then click 5 more additional times on the special code that you want to apply. This way the user can click on the "change all loans" button 1 time and then click on the appropriate special code only 1 time also. This is a much more efficient way to handle multiple loans.

The "mass change - reassign special codes" button allows one type of special code, for all borrowers to be changed to a different type of special code. Example, all borrower's loans special coded "L1" change to "L2". The program will then check every borrower's account to make the necessary special code change.

The collector code windows are identical to the special code windows. They both have the same 3 functions: setup button, assign individual account and mass code changes. The only additional button that the collector code window has that the special code window doesn't is the collector history button. The collector history button will show the user the entire history of when collector codes were changed and what were the codes changed from and to.

Website Services

Internet Update

Before breaking new ground, I'd like to say that I was glad to see so many people sign up for the Web update notification. So to the many people who signed up, we hope you find the updates to be a useful addition to our Web site. If you have not signed up yet, you can find the Update Notifications on the Client page, under Client Application.

Regulation Changes

Its that time of year when the regulations have been released. You will find information in another part of this newsletter. Of course the web site was updated in November to alert you to the changes. Each regulation announcement links to the full text of the amendments in the Federal Register.

Borrower Account Information

Starting in August 1998, ECSI provided the facility for borrowers to check the status of their student loan accounts using their web browser. Since May of 1999 we have been tracking in detail the number of borrowers accessing their account information using ECSI's web site.

During the first few months, we were excited when forty borrowers used the Account Information page in a week. Now, on an average day there are usually fifty borrowers checking their accounts. Weekends and holidays are especially popular, with over 300 borrowers accessing the site some days. All totaled, since May there have been over 6,000 borrowers accessing their information a total of 26,000 times. That means each person comes back on average four times.

One of the most frequent suggestions is to present full account history, similar to the account profile. Another suggestion was to place a link on the account information page directly back to the school's site. We are considering these enhancements for the first part of 2000. If you think something would be valuable to your borrowers, please let us know. We are always open to suggestions to make the site better.

ECSI 2000 Conference

Start making your plans to attend the 2000 ECSI User's Group conference. We will hold our annual conference here in Pittsburgh at the Sheraton Station Square. The dates are April 10, 11 and 12.

We are working on the conference materials and will be posting information on our web site as it becomes available. Starting in January, look in the Client Section for all the details. We are thinking of doing a pre-conference survey so if you think you might attend, please watch the web site and give us your opinions. This conference is intended for you and we want your input.

1098-E

Tis the season to begin preparing tax documents. ECSI will again provide the same services we offered for tax year 1998. Our rates have not changed but we will be adding one additional service. This year borrowers will have the ability to review their 1098-E as part of their account information. The information will be available on our web site the day the forms are prepared.

CD-ROM for Reports

We briefly spoke in the last issue about providing reports on CD-ROM. So far the responses to CD-Reports has been very positive. In November we announced (on our web site) that all clients receiving Micro-fiche will be converted to the new CD-Reports.

Several clients have asked if they will be converted from diskettes to CD-Reports. Our intention is to begin an orderly conversion starting in January. We anticipate that all clients will be converted prior to the Users' Conference in April. If you have a special need and cannot wait, please let us know. We will try to accommodate your needs.

Y2K-Ok?

We've discussed that the DOS version of SAL has no known Y2k glitches and therefore should perform normally before, on and after January 1, 2000. Of course if you are one of the schools already converted to SAL for Windows, you have nothing to worry about either. Our Windows product was written from the ground-up to be Y2k compliant.

Are you out of the woods yet? In order for SAL to work properly, your PC hardware and operating system must pass the Y2k test. Also, if you use SAL data in any other application (such as Excel or Lotus), you will need to ensure that those applications are compliant also.

Typically you should consult your technical staff for assistance. But, if you are just curious or have to resolve this issue yourself, take a look at the ECSI web site. In the news section you will find some background on this topic. In the Links section you will find many Y2k resources. There are links to educational resources explaining the problem, utilities that can check your hardware and places where you can verify your version of popular software packages passes the test.

Close Out Dates

	Jan	Feb	Mar
Mid-month Billing Calc	12	14	13
End-month Billing Calc	31	29	31
Final Transmission date for reports	30	28	30
Reports mailed to schools	1/2	2/2	3/2

National Student Loan Clearinghouse

ECSI Automates Interface with the National Student Loan Clearinghouse

Regulation change in October 1999 allows automatic deferment processing without a borrower signature.

Beginning October 1999, ECSI started processing student deferments without borrower signatures. The interface between ECSI and NSLC works as follows:

ECSI sends a file of all borrowers in grace and repayment to NSLC. NSLC then compares their database (which consists of 90% of all schools in the U.S.) Against the ECSI database, anyone registered at another school will be added to an interface file which will be transmitted back to ECSI. Previously, ECSI sent a letter to each borrower, stating where the student is now attending, what their current status is (full-time, half-time, leave of absence), when they are expected to graduate and reminded them they are eligible for a deferment if they sign and return this letter to ECSI.

With the new regulation changes, we are able to automatically process all deferments without signatures. Our system checks for continuity from previously applied deferments and extends the deferment range up to 12 additional months. Each borrower receives an audit statement, showing the new deferment date range. We will also create a collection memo0 starting which school they attend, their status and expected graduation date. If the status of the borrower changes, NSLC notifies ECSI immediately. Any borrower that withdrawals from school or falls below "half-time status" will be changed, automatically, to repayment status. ECSI will also create and provide each school with a report, in detail, showing who was effected by this interface. ECSI anticipates a tremendous time savings in processing deferments and a significant reduction in delinquency. The NSLC performed an analysis and found, 10 - 20% of all borrowers eligible for deferments never filed the proper paperwork.

Federal Perkins Loan Regulation Changes

Peace Corps

• To allow Peace Corps volunteers who are ineligible for deferment or cancellation of their federal student loans based solely on Peace Corps service to automatically qualify for economic hardship deferments while they are serving in the Peace Corps.
• To allow borrowers to receive economic hardship deferments for longer than a one-year period for each request while serving as Peace Corps volunteers.
• The borrower is not required to provide evidence of receiving payment from the Peace Corps to establish eligibility for the economic hardship deferment.
• The period of an economic hardship deferment under the new provision is the lesser of the borrower's full term of service in the Peace Corps or the borrower's remaining period of economic hardship deferment eligibility under the statutory three-year maximum.
• The Peace Corp certification form has been revised to include the borrower's dates of service and to make it suitable for use as supporting documentation of Peace Corps service for both categories of borrowers serving in the Peace Corps.
• Authorize a loan holder to grant a categorical deferment, including a deferment in anticipation of cancellation in the Federal Perkins Loan Program, for the borrower's full term of service in the Peace Corps, not to exceed three years.

Deferments

• An institution can determine a borrower's eligibility and grant an in-school deferment based on the institution's receipt of student enrollment information from the school in which the borrower is enrolled or from a third-party servicer. The institution must notify the borrower that a deferment has been granted and provide the borrower with the option to continue paying on the loan.
• The Secretary also amends the Federal Perkins Loan Program regulations to eliminate the provision that requires a borrower to submit a request for a loan deferment, including a deferment in anticipation of cancellation, in writing.

Changes to Bankruptcy of Borrower (Sec. 674.49)

• Reflect the change to the bankruptcy code that eliminates a borrower's ability to discharge a loan in bankruptcy on the basis of the loan being in repayment for more than seven years, and require all borrowers who seek discharge of a Perkins loan to prove undue hardship.
• Clarify that the seven year repayment period on bankruptcies filed before October 8, 1998, excludes applicable suspensions of the repayment period.
• Insert language stating that the institution must use diligence and may assert any defense consistent with its status under applicable law to avoid the discharge of the loan.

Incentive Repayment Program (Sec. 674.33)

An institution may establish the following repayment incentives:

• A reduction of no more than one percent of the interest rate on a loan on which the borrower has made 48 consecutive, monthly repayments.
• A discount of no more than five percent on the balance owed on a loan which the borrower pays in full prior to the end of the repayment period.
• With the Secretary's approval, any other incentive the institution determines will reduce defaults and replenish its Fund.

Limitation on the use of funds:

• The institution must reimburse its Fund, on at least a quarterly basis, for money lost to its Fund that otherwise would have been paid by the borrower as a result of establishing a repayment incentive.
• An institution may not use Federal funds, including Federal funds from the student loan fund, or institutional funds from the student loan fund to pay for any repayment incentive authorized by this section.

Loan Rehabilitation (Sec. 674.39)

Each institution must establish a loan rehabilitation program for all borrowers for the purpose of rehabilitating defaulted loans made under this part. The institution's loan rehabilitation program must provide that:

• A defaulted borrower is notified of the option and consequences of rehabilitating a loan.
• A loan is rehabilitated if the borrower makes an on-time, monthly payment, as determined by the institution, each month for twelve consecutive months and the borrower requests rehabilitation.
• A borrower who wished to rehabilitate a loan on which a judgement has been entered must sign a new promissory note after rehabilitating the loan.

Within 30 days of receiving the borrower's last on-time, consecutive, monthly payment, the institution must:

• Return the borrower to regular repayment status.
• Treat the first payment made under the 12 consecutive payments as the first payment under the 10-year repayment maximum.
• Instruct any credit bureau to which the default was reported to remove the default from the borrower's credit history.

Collection costs on a rehabilitated loan:

• If charged to the borrower, may not exceed 24 percent of the unpaid principal and accrued interest as of the date following application of the twelfth payment.
• That exceed the amounts specified in the above sentence of this section may be charged to an institution's Fund until July 1, 2002 in accordance with Sec. 674.47(e)(5).

After rehabilitating a defaulted loan and returning to regular repayment status, the borrower regains the balance of the benefits and privileges of the promissory note as applied prior to the borrower's default on the loan. Nothing in this paragraph prohibits an institution from offering the borrower flexible repayment options following the borrower's return to regular repayment status on a rehabilitated loan.

The borrower may rehabilitate a defaulted loan only one time.