20 U.S.C. § 1087cc–1 | Student loan information by eligible…

(a)

Disclosure required prior to disbursement

Each institution of higher education shall, at or prior to the time such institution makes a loan to a student borrower which is made under this part, provide thorough and adequate loan information on such loan to the student borrower. Any disclosure required by this subsection may be made by an institution of higher education as part of the written application material provided to the borrower, or as part of the promissory note evidencing the loan, or on a separate written form provided to the borrower. The disclosures shall include—

(1)

the name of the institution of higher education, and the address to which communications and payments should be sent;

(2)

the principal amount of the loan;

(3)

the amount of any charges collected by the institution at or prior to the disbursal of the loan and whether such charges are deducted from the proceeds of the loan or paid separately by the borrower;

(4)

the stated interest rate on the loan;

(5)

the yearly and cumulative maximum amounts that may be borrowed;

(6)

an explanation of when repayment of the loan will be required and when the borrower will be obligated to pay interest that accrues on the loan;

(7)

a statement as to the minimum and maximum repayment term which the institution may impose, and the minimum monthly payment required by law and a description of any penalty imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the Secretary or institutions to collect on a loan;

(8)

a statement of the total cumulative balance, including the loan applied for, owed by the student to that lender, and an estimate of the projected monthly payment, given such cumulative balance;

(9)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

(10)

10 U.S.C. 16302 a statement that the borrower has the right to prepay all or part of the loan, at any time, without penalty, a statement summarizing circumstances in which repayment of the loan or interest that accrues on the loan may be deferred, and a brief notice of the program for repayment of loans, on the basis of military service, pursuant to the Department of Defense educational loan repayment program ();

(11)

a definition of default and the consequences to the borrower if the borrower defaults, together with a statement that the disbursement of, and the default on, a loan under this part, shall be reported to a consumer reporting agency;

(12)

to the extent practicable, the effect of accepting the loan on the eligibility of the borrower for other forms of student assistance;

(13)

an explanation of any cost the borrower may incur in the making or collection of the loan;

(14)

a notice and explanation regarding the end to future availability of loans made under this part;

(15)

a notice and explanation that repayment and forgiveness benefits available to borrowers of loans made under part D are not available to borrowers participating in the loan program under this part;

(16)

a notice and explanation regarding a borrower’s option to consolidate a loan made under this part into a Federal Direct Loan under part D, including any benefit of such consolidation;

(17)

section 1087aa(b)(1)(A) of this title section 1087e(a)(2) of this title with respect to new undergraduate Federal Perkins loan borrowers, as described in , a notice and explanation providing a comparison of the interest rates of loans under this part and part D and informing the borrower that the borrower has reached the maximum annual borrowing limit for which the borrower is eligible as referenced under subparagraphs (A) and (D) of ; and

(18)

section 1087aa(b)(1)(B) of this title section 1087e(a)(2)(A) of this title with respect to current undergraduate Federal Perkins loan borrowers, as described in , a notice and explanation providing a comparison of the interest rates of loans under this part and part D and informing the borrower that the borrower has reached the maximum annual borrowing limit for which the borrower is eligible on Federal Direct Stafford Loans as referenced under .

(b)

Disclosure required prior to repayment

Each institution of higher education shall enter into an agreement with the Secretary under which the institution will, prior to the start of the repayment period of the student borrower on loans made under this part, disclose to the student borrower the information required under this subsection. Any disclosure required by this subsection may be made by an institution of higher education either in a promissory note evidencing the loan or loans or in a written statement provided to the borrower. The disclosures shall include—

(1)

the name of the institution of higher education, and the address to which communications and payments should be sent;

(2)

the scheduled date upon which the repayment period is to begin;

(3)

the estimated balance owed by the borrower on the loan or loans covered by the disclosure as of the scheduled date on which the repayment period is to begin (including, if applicable, the estimated amount of interest to be capitalized);

(4)

the stated interest rate on the loan or loans, or the combined interest rate of loans with different stated interest rates;

(5)

the nature of any fees which may accrue or be charged to the borrower during the repayment period;

(6)

the repayment schedule for all loans covered by the disclosure including the date the first installment is due, and the number, amount, and frequency of required payments;

(7)

an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan;

(8)

the projected total of interest charges which the borrower will pay on the loan or loans, assuming that the borrower makes payments exactly in accordance with the repayment schedule; and

(9)

a statement that the borrower has the right to prepay all or part of the loan or loans covered by the disclosure at any time without penalty.

(c)

Costs and effects of disclosures

Such information shall be available without cost to the borrower. The failure of an eligible institution to provide information as required by this section shall not (1) relieve a borrower of the obligation to repay a loan in accordance with its terms, (2) provide a basis for a claim for civil damages, or (3) be deemed to abrogate the obligation of the Secretary to make payments with respect to such loan.

Pub. L. 89–329, title IV, § 463A Pub. L. 99–498, title IV, § 405(a)Oct. 17, 1986100 Stat. 1446 Pub. L. 100–50, § 13(g)June 3, 1987101 Stat. 349 Pub. L. 102–325, title IV, § 463(c)July 23, 1992106 Stat. 579 Pub. L. 103–208, § 2(f)(8)Dec. 20, 1993107 Stat. 2471 Pub. L. 104–106, div. A, title XV, § 1501(e)(4)Feb. 10, 1996110 Stat. 501 Pub. L. 110–315, title IV, § 432(b)(6)Aug. 14, 2008122 Stat. 3246 Pub. L. 111–39, title IV, § 405(3)July 1, 2009123 Stat. 1947 Pub. L. 114–105, § 3Dec. 18, 2015129 Stat. 2220 (, as added , , ; amended , (h), , ; , , ; , , ; , , ; , , ; , , ; , , .)

Editorial Notes

Prior Provisions

Pub. L. 89–329, title IV, § 463A Pub. L. 96–374, title IV, § 447(b)Oct. 3, 198094 Stat. 1443 Pub. L. 97–301, § 13Oct. 13, 198296 Stat. 1405 Pub. L. 98–79, § 3(b)Aug. 15, 198397 Stat. 478 Pub. L. 99–272, title XVI, § 16027Apr. 7, 1986100 Stat. 353 Pub. L. 99–498A prior section 1087cc–1, , as added , , ; amended , , ; , , ; , , , related to student loan information to be provided by institutions, prior to the general revision of this part by .

Amendments

Pub. L. 114–1052015—Subsec. (a)(14) to (18). added pars. (14) to (18).

Pub. L. 111–39 section 1087cc(a)(8) of this title2009—Subsec. (a). struck out “, in order to carry out the provisions of ,” after “Each institution of higher education” in introductory provisions.

Pub. L. 110–3152008—Subsec. (a)(11). substituted “consumer” for “credit bureau or credit”.

Pub. L. 104–106 10 U.S.C. 16302 10 U.S.C. 21721996—Subsec. (a)(10). substituted “()” for “()”.

Pub. L. 103–2081993—Subsecs. (d), (e). struck out subsecs. (d) and (e), which read as follows:

Limitation on Use of Interest Bearing Accounts“(d) .—In carrying out the provisions of subsection (a)(10) of this section, the Secretary may not require that any collection agency, collection attorney, or loan servicer collecting loans made under this part deposit amounts collected on such loans in interest bearing accounts, unless such agency, attorney, or servicer holds such amounts for more than 45 days.

Special Due Diligence Rule“(e) .—In carrying out the provisions of subsection (a)(5) of this section relating to due diligence, the Secretary shall make every effort to ensure that institutions of higher education may use Internal Revenue Service skip-tracing collection procedures on loans made under this part.”

Pub. L. 102–325, § 463(c)(1)1992—Subsec. (a)(11). , substituted “together with a statement that the disbursement of, and the default on, a loan under this part, shall be” for “including a statement that the default may be”.

Pub. L. 102–325, § 463(c)(2)Subsecs. (d), (e). , added subsecs. (d) and (e).

Pub. L. 100–50, § 13(g)1987—Subsec. (a)(8). , added par. (8) and struck out former par. (8) which read as follows: “a statement of the total cumulative balance owed by the student to that institution, the projected level of indebtedness of the student based on a 2- or 4-year college career, and an estimate of the projected monthly repayment given the level of indebtedness over a 2-, 4-, or 5-year college career;”.

Pub. L. 100–50, § 13(h)10 U.S.C. 2172 10 U.S.C. 2141Subsec. (a)(10). , substituted “the Department of Defense educational loan repayment program ()” for “section 902 of the Department of Defense Authorization Act, 1981 (, note)”.

Statutory Notes and Related Subsidiaries

Effective Date of 2009 Amendment

Pub. L. 111–39 Pub. L. 110–315Aug. 14, 2008section 3 of Pub. L. 111–39 section 1001 of this titleAmendment by effective as if enacted on the date of enactment of (), see , set out as a note under .

Effective Date of 1996 Amendment

Pub. L. 104–106 Pub. L. 103–337Oct. 5, 1994section 1501(f)(3) of Pub. L. 104–106 section 113 of Title 10Amendment by effective as if included in the Reserve Officer Personnel Management Act, title XVI of , as enacted on , see , set out as a note under , Armed Forces.

Effective Date of 1993 Amendment

Pub. L. 103–208 Pub. L. 102–325 section 5(a) of Pub. L. 103–208 section 1051 of this titleAmendment by effective as if included in the Higher Education Amendments of 1992, , except as otherwise provided, see , set out as a note under .

Effective Date of 1987 Amendment

Pub. L. 100–50 Pub. L. 99–498 section 27 of Pub. L. 100–50 section 1001 of this titleAmendment by effective as if enacted as part of the Higher Education Amendments of 1986, , see , set out as a note under .

Effective Date

July 1, 1987section 405(b) of Pub. L. 99–498 section 1087dd of this titleSection applicable only to loans made for periods of enrollment beginning on or after , see , as amended, set out as a note under .

Section text and notes