New Federal Rule Affecting Health Profession and Institutional Student Loans
Michael V. McKee, Assistant Vice President and University Controller
This regulation applies to the Department of Health and Human Services health profession students loans and long-term and short-term institutional loans where the repayment due date is equal to or greater than 90 days from the disbursement date.
The Federal Reserve published a final rule amending Regulation Z (12 C.F.R. Part 226), which implements the Truth in Lending Act (TILA). The regulation is amended by adding disclosure and timing requirements that apply to creditors making private education loans, which are defined as loans made for postsecondary educational expenses. Compliance with the final rule is mandatory beginning February 14, 2010. This memo is to ensure colleges and departments are aware of the new rule.
New Forms required by this federal requirement. To ensure departments/colleges are providing the required disclosures new forms have been created.
1) A “Loan Notification Document” to be completed and submitted to Student Financial Affairs (original) and University Financial Services (copy) documenting compliance at the point the loan is approved. This new document is very similar to the Scholarship Notification Document (SND) and both are located on the Student Financial Affairs website, www.sfa.ufl.edu/pub/forms.html.
If you are a department/college awarding one of these types of loans, you will also be required to provide two additional forms to students:
2) An “Application/Solicitation Disclosure” form – an offer of credit that provides general information about the loan, and
3) An “Approval Disclosure” form – must be provided with notice of approval, contains specific information about the loan and permits the borrower the right to accept the loan at any time within thirty days after receiving the approval disclosure.
Should you want more detailed information about these new federal requirements, it can be found in the final rule available at: www.federalreserve.gov Federal Reserve System 12 CFR Part 226, Regulation Z: Docket No. R-1353.
University Financial Services will provide the necessary tools for creating these disclosures. Therefore, before offering and/or approving a loan, please contact University Financial Services for training, guidance and additional information. If you have questions, please contact Ruth Harris, email@example.com, or Dorothy Etienne, firstname.lastname@example.org, in University Financial Services at (352) 392-0765.