This Electronic Announcement reminds all holders of loans eligible for consolidation into a Direct Consolidation Loan of the long-held policy for handling underpayments and overpayments that may occur when the Department of Education pays off the underlying loans. This guidance does not apply to payoffs of federally-owned loans serviced by the Department’s federal loan servicers. For both underpayments and overpayments, the tolerances provided below apply to the aggregate eligible balance of principal, interest, fees, and collections costs.
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