Transcript Agenda
Higher Education Opportunity Act
Overview of Title X
Private Student Loan Transparency &
Improvement Act
Presented by:
Cherrie Champie
AVP-Account Manager
Citi-The Student Loan Corporation
For FAA Use Only
Agenda
• Regulatory Overview
• Process Changes for Students and
Families
• Process Changes for Financial Aid Offices
• Q&A
For FAA Use Only
Regulatory Overview - HEOA
Higher Education Opportunity Act (HEOA) signed into law
August 2008:
• Includes legislation to specifically regulate private education loans
through amendments to the Truth in Lending Act.
• Mandatory compliance date of February 14, 2010.
Key concern of Congress and policymakers:
• Data indicates that many students obtain private education loans
without first taking advantage of less expensive options such as
federal loans.
Intent of the Act:
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Provide greater transparency.
Improve the information provided to students regarding cost.
Ensure students are aware of federal loan options.
Encourage students to consult with their Financial Aid Office before
making education financing decisions to prevent over-borrowing.
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Regulatory Overview – Key Changes
1. Provide students with three new disclosures:
– Application Disclosure
– Approval Disclosure
– Final Disclosure
2. Allow students at least a 30-day period after approval to
accept the loan offer.
3. Students must complete a Self-certification Form and
submit it to the lender prior to disbursement.
4. Lenders must provide a three business day ‘right to
cancel’ period after customer receipt of the Final
Disclosure. Loan funds cannot be disbursed until after
the end of the cancellation period.
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Regulatory Overview Transparency
Lenders are required to clearly communicate loan information in a
consistent format, facilitating comparisons between lenders and loan
products.
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Regulatory Overview
Improved Information on Cost
Cost examples must be provided several times during the origination
process:
– With the application
– At approval
– Prior to disbursement
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Regulatory Overview
Federal Loan Options
Highlighting federal loan options on the Application and Approval
Disclosures ensures students are aware of all their education financing
options.
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Process Changes - Overview
New regulations expand the timeline to
process private student loans , due to the
right of rescission (which includes
notification days) so encourage your
students to begin the process early
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Process Changes
Students and Families
Lender Discussion
Step 1.
Submit your
application
Step 2.
Get approved
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Step 3.
Get your money
Process Changes – Application
Lender Discussion cont.
Step 1.
Submit your
application
■ Application Process for Co-Signed Loans
- Will the applicant be able to submit co-signer data
on application?
■ Electronic Delivery of Disclosure Documents
-Will students be required to opt-in for electronic
document delivery?
■ Will students be required to open the Application
Disclosure?
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Regulatory Overview – Financial Aid Office
Involvement
The Self-certification Form must be completed prior to loan disbursement and
suggests the student contact the FAA to discuss education financing options
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Process Changes – Application
Lender Discussion cont.
Step 2.
Get approved
■ How many days will student (and co-signer) have to accept loan offer?
■ Can students download the Self-certification Form from website?
When will it be available for download?
■ Will lenders accept faxed copy of Self-certification Form?
■ How will lenders handle missing information on the Self-certification Form?
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Process Changes – Disbursement
Lender Discussion cont.
Step 3.
Get your money
■ Final
Disclosure details rescission process
- How many days will the lender use for the rescission
period before disbursing?
For FAA Use Only
Process Changes for
Financial Aid Offices
■ Impact on School Certification Process and Timing
■ Identification of Missing Information
■ Impact of Hold/Release
-Loan changes are prohibited between
Final Disclosure issuance and first
disbursement.
-If a borrower or school try to cancel or
change a loan after the final approval
disclosure is issued, a new application is
required
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Process Changes for
Financial Aid Offices
School Discussion
■
What role will your office play in distributing and collecting
the Self-certification Form?
■
How will you provide Cost of Attendance information to
borrowers?
■
Will you proactively communicate these requirements on
your website (or some other means) or will you rely on the lender?
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Questions
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CHANGES TO PREFERRED LENDER
ARRANGEMENTS
•To be considered a Preferred Lender, a school or lender must:
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• Respond to an RFP
• List lender on a lender list located on the school’s website or on a third party site
• Provide the school with interest rates, fees, repayment terms, and eligibility requirements
for each applicable private loan
•If a school includes certain lenders on the list and leaves off other lenders, the
Department of Education will view the school as recommending or endorsing the
lenders on the list over the lenders not included in the list
•If a school has a preferred lender list, they must:
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• Clearly disclose why the school participates in a preferred lender arrangement with each
lender on the list
• State that applicants do not have to borrow from a lender on the list
• Indicate if a lender is affiliated with another lender on the list
• Include at least two lenders of private education loans that are not affiliated with each other
• Disclose the method used by the school in selecting the lenders
• Not impeded certification for applicants who choose a lender not listed on the preferred
lender list
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