Student Loan Information
Subject Area
Entrance Counseling for Student Loan Borrowers
Requirement Applies to
Institutions Participating in Title IV, HEA Loan Programs
Requirement
- HEOA Sec. 488(g) amended HEA Sec. 485 (20 U.S.C. 1092): added HEA Sec. 485(l)
- HEOA amendment effective August 14, 2008
- October 28, 2009 FR notice (revised 34 CFR 685.304(a), 34 CFR 682.604(f))
Note: The final regulations include the entrance counseling requirements separately for each loan program. See the program regulations for complete information.
Prior to the first disbursement, each institution must provide to a first-time borrower of a FFELP or a Federal Direct Loan (other than consolidated or Parent PLUS loans) comprehensive information on the terms and conditions of the loan and of the borrower's responsibilities. The information is to include
- the effect of the loan on the eligibility of the borrower for other forms of aid
- an explanation of the use of the Master Promissory Note
- the seriousness and importance of the students' repayment obligation
- information on the accrual and capitalization of interest
- borrowers of unsubsidized loans have the option of paying interest while in school
- definition of half-time enrollment and the consequences of not maintaining half-time enrollment
- importance of contacting appropriate offices if student withdraws prior to completion of program of study
- sample monthly repayment amounts
- the obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services the borrower purchased from the school
- consequences of default
- information about the NSLDS and how the borrower can access the borrower's records
- name and contact information for individual the borrower may contact with questions about the borrower's rights and responsibilities or the terms and conditions of the loan
How Disclosed
Information provided to each borrower
Links:
Subject Area
Exit Counseling for Student Loan Borrowers
Requirement Applies to
Institutions Participating in Title IV, HEA Loan Programs
Requirement
- HEOA Sec. 488(b) amended HEA Sec. 485(b) (20 U.S.C. 1092(b)): new HEA Sec. 485(b)(1)(A)
- HEOA amendment effective August 14, 2008
- October 28, 2009 FR notice (revised 34 CFR 668.42, 34 CFR 685.304(b), 34 CFR 674.42(b), 34 CFR 682.604(g))
Note: The final regulations include the exit counseling requirements separately for each loan program. See the program regulations for complete information..
Each institution must provide counseling to borrowers of loans under the FFEL, Federal Direct Loan, or Perkins Loan programs (other than consolidated or Parent PLUS loans) shortly before the student borrower ceases at least half-time study at the institution. The counseling will provide information on
- average anticipated monthly repayment amount
- repayment plan options
- options to prepay or pay on shorter schedule
- debt management strategies
- use of Master Promissory Note
- the seriousness and importance of student's repayment obligation
- terms and conditions for forgiveness or cancellation
- copy of information provided by the Department of Education (see subject # L-2)
- terms and conditions for deferment or forbearance
- consequences of default
- options and consequences of loan consolidation
- tax benefits available to borrowers
- the obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or did not receive the educational or other services the borrower purchased from the institution
- availability of the Student Loan Ombudsman's office
- information about the NSLDS. The Department of Education is required to provide a disclosure form for students and prospective students about the NSLDS (HEOA Sec. 489(3), HEA Sec. 485B)
How Disclosed
Information provided to each student borrower
Links:
Subject Area
Code of Conduct for Education Loans
Requirement Applies to
Institutions Participating in Title IV, HEA Loan Programs
Requirement
- HEOA Sec. 493(a)(1) and HEOA Sec. 493(c) amended HEA Sec. 487 (20 U.S.C. 1094):
- added HEA Sec. 487(a)(25)
- new HEA Sec. 487(e) - HEOA amendments effective August 14, 2008
- October 28, 2009 FR notice (added 34 CFR 601.2, 34 CFR 601.21, 34 CFR 668.14(b)(27))
Each institution must prominently publish on the institution's website a code of conduct that prohibits a conflict of interest with the responsibilities of an agent of the institution with respect to FFELP or private education loans. All agents with responsibility for loans must be informed annually of the provisions of the code. The code of conduct must prohibit
- revenue-sharing arrangements with any lender
- receiving gifts from a lender, a guarantor, or a loan servicer
- contracting arrangement providing financial benefit from any lender or affiliate of a lender
- directing borrowers to particular lenders, or refusing or delaying loan certifications
- offers of funds for private loans
- call center or financial aid office staffing assistance
- advisory board compensation
How Disclosed
Published on website
All relevant agents must be annually informed of the provisions of the code of conduct
Subject Area
Preferred Lender Lists
Requirement Applies to
Institutions Participating in Title IV, HEA Programs That Participate in a Preferred Lender Arrangement
Requirement
- HEOA Sec. 493(a)(1), HEOA Sec. 493(c), and HEOA Sec. 493(d) amended HEA Sec. 487 (20 U.S.C. 1094):
- added HEA Sec. 487(a)(27)
- added HEA Sec. 487(h)
- new HEA Sec. 487(i) - HEOA amendments effective August 14, 2008
- October 28, 2009 FR notice (added 34 CFR 601.2, 34 CFR 601.10
- 34 CFR 668.14(b)(28))
Each institution must annually make available in print or other medium to students attending the institution and their families a list of the specific lenders for private education loans or for Title IV, HEA loans that the institution recommends, promotes, or endorses in accordance with a preferred lender arrangement.
The list must prominently disclose the method and criteria used by the institution in selecting lenders for preferred lender arrangements to ensure that such lenders are selected on the basis of the best interests of the borrower. The list must also clearly and fully disclose
- the minimum information determined by the Department of Education (HEA Sec. 153(a)) (see subject # L-9)
- why the institution participates in a preferred lender arrangement with each lender, particularly with respect to terms and conditions or provisions favorable to the borrower
- that the students or their families do not have to borrow from a lender on the list
The list must have at least three FFELP lenders that are not affiliates of each other. If the list includes lenders of private education loans, there must be at least two lenders who are not affiliates. The list must indicate for each lender whether it is or is not an affiliate of the other lenders on the list. The details of each affiliation are to be disclosed. The Department of Education is required to provide to institutions a list of the lender affiliates of all eligible lenders.
How Disclosed
Made available to students and families in print or other medium
Links:
Subject Area
Preferred Lender Arrangements
Requirement Applies to
Institutions Receiving Any Federal Funding That Participate in a Preferred Lender Arrangement
Requirement
- HEOA Sec. 120 amended HEA Title I: added HEA Title I, Part E (HEA Sec. 151-154) (20 U.S.C. 1019, 1019a-1019c).
- (HEOA Title X also amended the Truth in Lending Act.)
- HEOA amendments effective August 14, 2008 (unless otherwise specified)
- October 28, 2009 FR notice (added 34 CFR 601.2, 34 CFR 601.10, 34 CFR 601.12, 34 CFR 601.20, 34 CFR 601.21))
An institution or institution-affiliated organization (e.g., alumni organizations, foundations) that participates in a preferred lender arrangement must comply with the code of conduct provisions in HEA Sec. 487(a)(25) and HEA Sec. 487(h). Institution-affiliated organizations are required to prominently publish the code of conduct on their websites (if any) and annually inform agents with responsibility for education loans of the provisions of the code.
By February 14, 2010, the Department of Education is required to determine the minimum information to be disclosed to current and prospective students regarding preferred lender arrangements. The Department is also required to then develop model disclosure forms for FFELP and Federal Direct Loans that may be used by institutions or institution-affiliated organizations.
In addition to the information required for the Preferred Lender Lists, each institution or institution-affiliated organization in a preferred lender arrangement must disclose information on its website and in publications, mailings, or electronic messages, or materials that are distributed to prospective or current students and their families that describe the financial aid opportunities available to students attending the institution and that describe or discuss education loans (see also subject # 3 for Sec. 485(a) requirements).
The information must include
- the maximum amount of Title IV, HEA grant and loan aid available to students
- the information on the model disclosure form provided by the Department of Education (described above) for each type of loan offered pursuant to a preferred lender arrangement; and
- a statement that the institution is required to process documents for a FFELP loan from any eligible lender the student selects.
How Disclosed
- Published on website. All relevant agents must be annually informed of the provisions of the code of conduct.
- Published on website. Provided in publications, mailings, or electronic messages or materials that are distributed to prospective or current students and their families
Links:
Subject Area
Private Education Loans
Requirement Applies to
Institutions Receiving Any Federal Funding That Participate in a Preferred Lender Arrangement
Requirement
Each institution must provide on its website, and in publications, mailings, or electronic messages, or materials that are distributed to prospective or current students and their families that describe the financial aid opportunities available to students attending the institution and that describe or discuss private education loans, the information required to be disclosed under Sec. 128(e)(11) of the Truth in Lending Act (15 U.S.C. 1638(e)(11)) for each type of private loan offered pursuant to a preferred lender arrangement.
Each institution-affiliated organization must provide on its website, and in publications, mailings, or electronic messages, or materials distributed to students and families that describe private education loans the information required to be disclosed under Sec. 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1) for each type of private loan offered pursuant to a preferred lender arrangement.
The name of the lender must be displayed in all information and documentation related to private education loans.
The information in the model disclosure form and the Truth in Lending Act information must be provided annually in a manner that allows students and families to take the information into account before selecting a lender or applying for an education loan.
How Disclosed
Published on website. Provided in publications, mailings, or electronic messages or materials that are distributed to prospective or current students and their families
Links:
Subject Area
Annual Report on Preferred Lender Arrangements
Requirement Applies to
Institutions Receiving Any Federal Funding That Participate in a Preferred Lender Arrangement
Requirement
Each institution and each institution-affiliated organization must make an annual report to the Department of Education that includes for each lender in a preferred lender arrangement with the institution or institution-affiliated organization
- the minimum information the Department determines must be disclosed (described above)
- information required for private loans under the Truth in Lending Act
- detailed explanation of the reasons an institution or institution-affiliated organization participates in a preferred lender arrangement with the lender, including why the terms, conditions, and provisions of each type of loan are beneficial to the institution's students or their families
The information in the report must be made available to the public and provided to current students and students planning to attend the institution and their families.
How Disclosed
Made available to the public and provided to current students and students planning to attend the institution and their families
Links: