WASHINGTON (CN) – The Department of Education has proposed major changes to notification and repayment requirements of student loans under the Higher Education Opportunity Act of 2008.
Educational institutions and loan originators would be required to provide extensive entrance and exit counseling to recipients, that would include information on repayment plans, including a description of the different features of each plan and samples showing average anticipated monthly payments with the difference in interest paid and total payments shown with each plan, information on the effect of secondary sales of loans to third parties, and information on repayment options and loan consolidation.
In addition, educational institutions are required to develop a code of conduct that must prohibit revenue-sharing arrangements with any lender, soliciting or accepting gifts, fees, payments, or other financial benefit as compensation for any type of consulting or any contractual relationship with a lender. The proposed rules include a massive expansion of cancellation benefits for Perkins Loan borrowers, including cancellation benefits for teachers and staff members in an educational service agency; attorneys employed in a Federal Public Defender Organization or community Defender Organization; fire fighters, and faculty members of a Tribal College or University.
Click the document icon beneath “TTB Eliminates Annual Registration,” for this and other new regulations.