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Required Due Diligence Timeframes

In servicing student loans, lenders/servicers are required to follow federally mandated due diligence procedures. (In at least one of a lender/servicer's collection efforts, a borrower must be informed of the availability of assistance offered by the US Department of Education's Student Loan Ombudsman's Office.)

Those procedures are outlined in this section.  For more detailed information, please refer to the Common Manual.

Monthly Payment Accounts

No gaps of greater than 45 days can occur through the 270th day of delinquency for loans on monthly repayment plans.

If no rolling delinquency and no special circumstances exist on the account, lenders/servicers must perform the following activities:

Day 1 – 15

  • Send minimum of 1 written notice or collection letter
  • Notice/Letter must contain lender/servicer contact information, including phone number
  • Notice/Letter must include a prominent statement informing borrower that assistance is available if there is difficulty making payments

Day 16 – 180

  • Make minimum of 4 diligent efforts to contact the borrower by telephone
    • Each effort must equal 1 successful contact or 2 unsuccessful attempts
    • One effort must be on or before the 90th day of delinquency
    • One effort must be after the 90th day of delinquency
  • Send minimum of 4 written notices or collection letters
  • Information on repayment options such as deferment, forbearance, Income Sensitive Repayment (ISR), loan consolidation and other available options must be included.
  • At least 2 of the letters must include warnings on the consequences of default.

Day 16 – 90

  • Make minimum of 1 diligent effort to contact the borrower by telephone
  • Send minimum of 2 collection letters

Day 60

  • Provide notice to the borrower, in simple and understandable terms of:
    • date on which loan will default if no payment is made
    • minimum payment to avoid default
    • description of options to avoid default (and any fees or costs) including a description of deferment and forbearance
    • discharge options to which the borrower may be entitled

Day 60 – 120

Day 91 – 180

  • Make minimum of 1 diligent effort to contact the borrower by telephone
  • Send minimum of 2 collection letters

Day 181 – 240

  • Engage in collection efforts

Day 241 to Claim Filing

  • Send final demand letter on or after 241st day
  • Must allow minimum 30 days after date letter sent for borrower to respond
  • Must file default claim before 360th day of delinquency

Monthly Installment Accounts with Rolling Delinquency/Special Occurrence

Rolling Delinquency

  • Occurs when delinquent status of a loan is increased or reduced, but not completely eliminated.
  • Could be result of:
    • Payment
    • Reversal of payment
    • Expiration of deferment or forbearance 
    • Receipt of new out-of-school date

Special Occurrence

  • When lender’s due diligence requirements may be affected by event that does not change borrower’s payment due date
  • Could be result of:
    • Receipt of valid telephone number for borrower
    • Receipt of valid address for borrower

If 16 or more days delinquent as a result of rolling delinquency or at time of special occurrence

Day 1 – 15

  • Make 4 efforts to contact borrower by telephone
  • Send minimum 4 collection letters
    • 1 effort must be made on or before 90th day
    • 1 effort must be made after 90th day

Day 16 – 90

  • Make 2 efforts to contact borrower by telephone before 181st day
    • Each effort must be 1 successful contact or 2 unsuccessful contacts by phone
    • If unable to contact by telephone, must send minimum 2 collection letters
    • If phone efforts result in single contact w/borrower, must send minimum 1 letter

Day 91 – 120

  • Make 1 telephone attempt by 181 day
    • Must be 1 successful contact or 2 unsuccessful attempts to contact by telephone
    • If unable to contact by phone, must send minimum 1 collection letter

More than 120 days

  • Send final demand letter
    • No letter needed if borrower remains 241 days or more delinquent & final demand letter previously mailed & then rolling delinquency/special occurrence occurs

Payments Due Less Frequently than Monthly

For loans with repayment plans less frequent than monthly, no gaps can occur through the 330th day of delinquency .

Day 1 – 15

  • Send minimum 1 collection letter

Day 16 – 240

  • Make minimum 4 attempts to contact borrower by telephone
    • Each effort must be 1 successful contact or 2 unsuccessful attempts by telephone
    • 1 effort must occur on or before 120th day
    • 1 effort must occur after 120th day
  • Send minimum 4 collection letters

Day 60 – 120

Day 241 – 300

  • Engage in collection efforts

Day 301 or More

  • If more than 301 days, send final demand letter
    • New final demand letter not necessary if borrower remains 301 days or more delinquent & borrower had invalid address or letter was previously sent prior to rolling delinquency or special occurrence
    • Must allow 30 days after letter sent for borrower to respond

Day 331 – 420

  • Must file a default claim on or after 360th day

Payments Due Less Frequently than Monthly with Rolling Delinquency/Special Occurrence

Day 1 – 15

  • Make minimum 4 attempts to contact borrower by telephone
  • Send minimum 4 collection letters
    • 1 effort must be done on or before 120th day
    • 1 effort must be done after 120th day

Day 16 – 120

  • Make 2 efforts to contact borrower by telephone before 241st day
    • Each effort must be 1 successful contact or 2 unsuccessful contacts by phone 
    • Unable to contact by telephone, send minimum 2 letters
    • If 1 single contact with borrower, send minimum 1 letter

Day 121 – 180

  • Make 1 effort to contact borrower by telephone before 241st day
    • Must be 1 successful contact or 2 unsuccessful attempts to contact by phone
    • If unable to contact by telephone, send minimum 1 letter

More than 180 days

  • If more than 180 days, send final demand letter
  • New final demand letter not necessary if borrower remains 301 days or more delinquent & borrower had invalid address or letter was previously sent prior to rolling delinquency or special occurrence