Instructions for Completing Direct Consolidation Loan Verification Certificate
The borrower named in this Loan Verification Certificate (LVC) has
requested a Direct Consolidation Loan to repay one or more eligible
federal education loans. The borrower has identified one or more loans
you hold or service as loans to be consolidated. As part of the
application process for a Direct Consolidation Loan, each loan
holder/servicer identified by the borrower must complete this LVC.
After receiving the LVC from you and determining that the loans are
eligible for consolidation, the U.S. Department of Education (ED) will
pay off the borrower's debt to you using the information you provide on
this LVC or, if you do not return this LVC by the specified deadline, by
using information from ED’s National Student Loan Data System
(NSLDS).
Before paying off the borrower’s loans, ED will send the borrower a
notice that provides information about all of the loans and payoff
amounts that have been verified, and informs the borrower of the
deadline for notifying ED that he or she wants to cancel the Direct
Consolidation Loan, or does not want to consolidate one or more of the
loans listed in the notice.
Upon receipt of payment from ED, you must notify the borrower that
the loans that were with you have been paid in full. An overpayment
from ED or any payments you receive from the borrower after you
receive ED's payment must be sent to ED for application to the
borrower's Direct Consolidation Loan. If the borrower contacts you
about his or her account while the Direct Consolidation Loan application
is in process, you should tell the borrower to continue to make regularly
scheduled payments on the loan to avoid default.
Pursuant to 34 CFR 685.220(f)(1)(i), you must complete and return this
certificate within 10 business days of the date received to the address
provided on page 1 of this LVC.
Holder/Servicer Instructions:
Some of the information may be preprinted. Enter dates as month-day-
year (mm-dd-yyyy). Use only numbers. Example: June 1, 2017 = 06-01-
2017.
Item 1: Enter or correct the holder/servicer information.
Item 2: If the payoff check should be sent to a different institution
and/or address than that in Item 1, enter the requested information.
Item 3: Enter or correct the borrower’s full name, Social Security
Number, current address, and current area code/telephone number.
Item 4: Sign, date, and provide the other requested information.
Item 5: Enter the date you complete this certificate.
Note: If you are no longer the holder/servicer of one or more of the
loans listed, complete the information for the loans you hold and
indicate in Item 19 the new holder/servicer for the other loans, if
known.
Item 6: Enter the account number assigned to each loan for which you
are the holder/servicer. If you have multiple accounts for this borrower,
list them as #1, #2, etc. If the account number is the same for each loan,
enter “same” on the subsequent lines.
Item 7: Enter the loan type, using the codes shown in the chart on page
4.
Note: Loan type W should be used for other types of education
loans that may not be consolidated, but that can be included as
part of the borrower’s total indebtedness when assigning a
repayment term. Explain in Item 19 the reason you believe a loan
may not be eligible for consolidation.
Item 8: Enter the annual interest rate (percent) in effect for the loan as
of the certification date. If this rate is different from the statutory
interest rate for the loan, enter the rate that is in effect as of the
certification date, not the statutory interest rate.
Item 9-12: Provide the payoff amount for each loan, which is the sum of
the following, as of the certification date in Item 5:
Item 9: Principal outstanding (including capitalized interest)
Item 10: Unpaid accrued interest through certification date
Item 11: Unpaid fees and late charges, if applicable (as authorized
by ED’s regulations)
Item 12: Unpaid collection costs, if applicable (as authorized by
ED’s regulations)
Item 13: Enter the total amount of Items 9 through 12.
Item 14: Enter the first, or only, disbursement date for the loan.
Item 15: If the loan is in the grace period, enter the date the borrower
completed his or her program, graduated, or ceased half-time
enrollment.
Item 16: Enter the current status of the borrower’s accounts using the
status codes from the list on page 4.
Item 17: Complete Items 17a and 17b only if: (i) the loan you hold is
loan type A, D, E, or O (see instructions for Item 7); and (ii) the borrower
has repaid or is currently repaying that loan under the Revised Pay As
You Earn Repayment Plan (REPAYE Plan), the Pay As You Earn
Repayment Plan (PAYE Plan), or the Income-Based Repayment Plan (IBR
Plan). Otherwise, leave Items 17a and 17b blank. If (i) and (ii) apply, for
each loan that has been or is currently in repayment under the REPAYE
Plan, the PAYE Plan, or the IBR Plan:
17a: Enter the date the borrower’s REPAYE Plan, PAYE Plan, or IBR
Plan started.
17b: Enter the number of days of economic hardship deferment
the borrower has received since the REPAYE Plan, PAYE Plan, or
IBR Plan started.
Item 18: Enter the total payoff amount due to the holder/servicer
shown on this LVC.
Item 19: Enter any appropriate comments. If unable to complete this
LVC, please provide an explanation here.
Note: When the consolidation process is complete, we will send the
entity listed in Item 1 or 2 a payment for the sum of principal, interest,
and allowable collection costs and fees. We will send a guaranty agency
the payment for allowable collection costs and fees. However, the
guaranty agency’s principal and interest balances will be accounted for
by Treasury form SF 1081.
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