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ECSI Regulation Bulletin

Working with Federal Student Loans also means working within the Federal Regulations that accompany them. As your servicer, ECSI feels that it is our duty to keep track of these regulations for you, making sure to keep your institution in compliance with all mandatory federal regulations.

Regulation Spotlight: On-Line Entrance Interviews & Electronic Promissory Notes

Problem:

Regulations state that every Master Promissory Note (MPN) must be signed before funds can be disbursed to a borrower. Unfortunately for schools and borrowers, the majority of MPN’s come in for processing at the same time. With manual processes, each and every MPN has to be either signed in person at the school or mailed out to a borrower and returned. For the school, this means time consuming work for their staff and added expenses to the budget. For the borrower, this means possible delays in receiving the aid they need.

Regulation:

Section 34 CFR 674.16 of the Federal Perkins Loan Program states:

"Before an institution makes its first disbursement to a student, the student shall sign the promissory note and the institution shall provide the student with the following information:

  1. The name of the institution and the address to which communications and payments should be sent.
  2. The principal amount of the loan and a statement that the institution will report the amount of the loan to a national credit bureau at least annually.
  3. Any cost that may be assessed on the borrower in the collection of the loan including late charges and collection and litigation costs."

For a complete listing of this regulation, please visit: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div6&view=text&node=34:3.1.3.1.37.1&idno=34

Solution:

By applying our award winning technology and vast industry experience, ECSI (incorporated since 1972) has developed a fully integrated state-of-the-art On-line Entrance Interview & eSignature Solution to help reduce your administrative workload and drastically cut processing times. Also, with ECSI’s On-line Entrance Interview & eSignature Solution, borrowers enjoy the convenience of 24/7 internet access to complete the MPN process from the comfort of their home, dormroom, or local coffee shop.

ECSI’s eSignature Solution includes the lifetime storage of all completed On-line Entrance Interviews & Promissory Notes and a seamless transfer of data into the SAL System for future collection and auditing purposes. As shown below, all the school needs to do is send a file, and ECSI does the rest.

For more information, on this or any other regulation, please contact us.