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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: Electronic Disclosure Statements

Problem:

Students need information regarding their student loans and federal regulations state that it is the responsibility of you, the school, to get it to them. Information is sent in the form of disclosure statements and usually contains: Date of Disbursement(s), Amount(s) Borrowed, Cumulative Balance Amount, Interest Rate(s), Rights to Cancel, Amortization Schedules, etc., etc., etc. For those institutions that do not have an automated, electronic solution in place, sending disclosures can be a very daunting, and costly, task.

Regulation:

Section 34 CFR 674.42 of the Federal Perkins Loan Program states:

"(a) Disclosure of repayment information. The institution must disclose the following information in a written statement provided to the borrower either shortly before the borrower ceases at least half-time study at the institution or during the exit interview. If the borrower enters the repayment period without the institution's knowledge, the institution must provide the required disclosures to the borrower in writing immediately upon discovering that the borrower has entered the repayment period. The institution must disclose the following information:

  1. The name and address of the institution to which the debt is owed and the name and address of the official or servicing agent to whom communications should be sent.
  2. The name and address of the party to which payments should be sent.
  3. The estimated balance owed by the borrower on the date on which the repayment period is scheduled to begin.

    4. . . .

  4. An explanation that if a borrower is required to make minimum monthly repayments, and the borrower has received loans from more than one institution, the borrower must notify the institution if he or she wants the minimum monthly payment determination to be based on payments due to other institutions."

For a complete listing of this regulation, please visit: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title34/34cfr674_main_02.tpl

Solution:

Automation. ECSI’s Electronic Disclosure Solution provides your school, and your borrowers, a real-time Electronic Disclosure Statement process that is clear, concise, and simple to access. Get away from the cost of postage and paper, and give your borrowers a solution that will deliver their Disclosure Statement in the most efficient way possible.

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