[Code of Federal Regulations] [Title 34, Volume 3] [Revised as of July 1, 2005] From the U.S. Government Printing Office via GPO Access [CITE: 34CFR682.100] [Page 626-629] TITLE 34--EDUCATION CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION PART 682_FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents Subpart A_Purpose and Scope Sec. 682.100 The Federal Family Education Loan programs. Subpart A_Purpose and Scope Sec. 682.100 The Federal Family Education Loan programs. 682.101 Participation in the FFEL programs. 682.102 Obtaining and repaying a loan. 682.103 Applicability of subparts. Subpart B_General Provisions 682.200 Definitions. 682.201 Eligible borrowers. 682.202 Permissible charges by lenders to borrowers. 682.203 Responsible parties. 682.204 Maximum loan amounts. 682.205 Disclosure requirements for lenders. 682.206 Due diligence in making a loan. 682.207 Due diligence in disbursing a loan. 682.208 Due diligence in servicing a loan. 682.209 Repayment of a loan. 682.210 Deferment. 682.211 Forbearance. 682.212 Prohibited transactions. 682.213 Prohibition against the use of the Rule of 78s. 682.214 Compliance with equal credit opportunity requirements. 682.215 Teacher loan forgiveness program. Subpart C_Federal Payments of Interest and Special Allowance 682.300 Payment of interest benefits on Stafford and Consolidation loans. 682.301 Eligibility of borrowers for interest benefits on Stafford and Consolidation loans. 682.302 Payment of special allowance on FFEL loans. 682.303 [Reserved] 682.304 Methods for computing interest benefits and special allowance. [[Page 627]] 682.305 Procedures for payment of interest benefits and special allowance and collection of origination and loan fees. Subpart D_Administration of the Federal Family Education Loan Programs by a Guaranty Agency 682.400 Agreements between a guaranty agency and the Secretary. 682.401 Basic program agreement. 682.402 Death, disability, closed school, false certification, unpaid refunds, and bankruptcy payments. 682.403 Federal advances for claim payments. 682.404 Federal reinsurance agreement. 682.405 Loan rehabilitation agreement. 682.406 Conditions for claim payments from the Federal Fund and for reinsurance coverage. 682.407 [Reserved] 682.408 Loan disbursement through an escrow agent. 682.409 Mandatory assignment by guaranty agencies of defaulted loans to the Secretary. 682.410 Fiscal, administrative, and enforcement requirements. 682.411 Lender due diligence in collecting guaranty agency loans. 682.412 Consequences of the failure of a borrower or student to establish eligibility. 682.413 Remedial actions. 682.414 Records, reports, and inspection requirements for guaranty agency programs. 682.415 Special insurance and reinsurance rules. 682.416 Requirements for third-party servicers and lenders contracting with third-party servicers. 682.417 Determination of Federal funds or assets to be returned. 682.418 Prohibited uses of the assets of the Operating Fund during periods in which the Operating Fund contains transferred funds owed to the Federal Fund. 682.419 Guaranty agency Federal Fund. 682.420 Federal nonliquid assets. 682.421 Funds transferred from the Federal Fund to the Operating Fund by a guaranty agency. 682.422 Guaranty agency repayment of funds transferred from the Federal Fund. 682.423 Guaranty agency Operating Fund. Subpart E_Federal Guaranteed Student Loan Programs 682.500 Circumstances under which loans may be guaranteed by the Secretary. 682.501 Extent of Federal guarantee under the Federal GSL programs. 682.502 The application to be a lender. 682.503 The guarantee agreement. 682.504 Issuance of Federal loan guarantees. 682.505 Insurance premium. 682.506 Limitations on maximum loan amounts. 682.507 Due diligence in collecting a loan. 682.508 Assignment of a loan. 682.509 Special conditions for filing a claim. 682.510 Determination of the borrower's death, total and permanent disability, or bankruptcy. 682.511 Procedures for filing a claim. 682.512 Determination of amount payable on a claim. 682.513 Factors affecting coverage of a loan under the loan guarantee. 682.514 Procedures for receipt or retention of payments where the lender has violated program requirements for Federal GSL loans. 682.515 Records, reports, and inspection requirements for Federal GSL program lenders. Subpart F_Requirements, Standards, and Payments for Participating Schools 682.600 [Reserved] 682.601 Rules for a school that makes or originates loans. 682.602 [Reserved] 682.603 Certification by a participating school in connection with a loan application. 682.604 Processing the borrower's loan proceeds and counseling borrowers. 682.605 Determining the date of a student's withdrawal. 682.606 [Reserved] 682.607 Payment of a refund or a return of title IV, HEA program funds to a lender upon a student's withdrawal. 682.608 Termination of a school's lending eligibility. 682.609 Remedial actions. 682.610 Administrative and fiscal requirements for participating schools. 682.611 Foreign schools. Subpart G_Limitation, Suspension, or Termination of Lender or Third- party Servicer Eligibility and Disqualification of Lenders and Schools 682.700 Purpose and scope. 682.701 Definitions of terms used in this subpart. 682.702 Effect on participation. 682.703 Informal compliance procedure. 682.704 Emergency action. 682.705 Suspension proceedings. 682.706 Limitation or termination proceedings. 682.707 Appeals in a limitation or termination proceeding. 682.708 Evidence of mailing and receipt dates. 682.709 Reimbursements, refunds, and offsets. [[Page 628]] 682.710 Removal of limitation. 682.711 Reinstatement after termination. 682.712 Disqualification review of limitation, suspension, and termination actions taken by guarantee agencies against lenders. 682.713 Disqualification review of limitation, suspension, and termination actions taken by guarantee agencies against a school. Subpart H_Special Allowance Payments on Loans Made or Purchased With Proceeds of Tax-Exempt Obligations 682.800 Prohibition against discrimination as a condition for receiving special allowance payments. Appendixes A-B to Part 682 [Reserved] Appendix C to Part 682--Procedures for Curing Violations of the Due Diligence in Collection and Timely Filing of Claims Requirements Applicable to FISLP and Federal PLUS Program Loans and for Repayment of Interest and Special Allowance Overbillings [Bulletin L-77a] Appendix D to Part 682--Policy for Waiving the Secretary's Right To Recover or Refuse To Pay Interest Benefits, Special Allowance, and Reinsurance on Stafford, Plus, Supplemental Loans for Students, and Consolidation Program Loans Involving Lenders' Violations of Federal Regulations Pertaining to Due Diligence in Collection or Timely Filing of Claims [Bulletin 88-G-138] Authority: 20 U.S.C. 1071 to 1087-2, unless otherwise noted. Source: 57 FR 60323, Dec. 18, 1992, unless otherwise noted. (a) This part governs the following four programs collectively referred to in these regulations as ``the Federal Family Education Loan (FFEL) programs,'' in which lenders use their own funds to make loans to enable a student or his or her parents to pay the costs of the student's attendance at postsecondary schools: (1) The Federal Stafford Loan (Stafford) Program, which encourages making loans to undergraduate, graduate, and professional students. (2) The Federal Supplemental Loans for Students (SLS) Program, as in effect for periods of enrollment that began prior to July 1, 1994, which encouraged making loans to graduate, professional, independent undergraduate, and certain dependent undergraduate students. (3) The Federal PLUS (PLUS) Program, which encourages making loans to parents of dependent undergraduate students. Before October 17, 1986, the PLUS Program also provided for making loans to graduate, professional, and independent undergraduate students. Before July 1, 1993, the PLUS Program also provided for making loans to parents of dependent graduate students. (4) The Federal Consolidation Loan Program (Consolidation Loan Program), which encourages making loans to borrowers for the purpose of consolidating loans: under the Federal Insured Student Loan (FISL), Stafford loan, SLS, ALAS (as in effect before October 17, 1986), PLUS, Perkins Loan programs, the Health Professions Student Loan (HPSL) including Loans for Disadvantaged Students (LDS) Program authorized by subpart II of part A of Title VII of the Public Health Services Act, Health Education Assistance Loans (HEAL) authorized by subpart I of Part A of Title VII of the Health Services Act, Nursing Student Loan Program loans authorized by subpart II of part B of title VIII of the Public Health Service Act, and existing loans obtained under the Consolidation Loan Program, and William D. Ford Direct Loan (Direct Loan) program loans, if the application for the Consolidation loan was received on or after November 13, 1997. (b)(1) Except for the loans guaranteed directly by the Secretary described in paragraph (b)(2) of this section, a guaranty agency guarantees a lender against losses due to default by the borrower on a FFEL loan. If the guaranty agency meets certain Federal requirements, the guaranty agency is reimbursed by the Secretary for all or part of the amount of default claims it pays to lenders. (2)(i) The Secretary guarantees lenders against losses-- (A) Within the Stafford Loan Program, on loans made under Federal Insured Student Loan (FISL) Program; [[Page 629]] (B) Within the PLUS Program, on loans made under the Federal PLUS Program; (C) Within the SLS Program, on loans made under the Federal SLS Program as in effect for periods of enrollment that began prior to July 1, 1994; and (D) Within the Consolidation Loan Program, on loans made under the Federal Consolidation Loan Program. (ii) The loan programs listed in paragraph (b)(2)(i) of this section collectively are referred to in these regulations as the ``Federal Guaranteed Student Loan (GSL) programs.'' (iii) The Federal GSL programs are authorized to operate in States not served by a guaranty agency program. In addition, the FISL and Federal SLS (as in effect for periods of enrollment that began prior to July 1, 1994) programs are authorized, under limited circumstances, to operate in States in which a guaranty agency program does not serve all eligible students. (Authority: 20 U.S.C. 1701 to 1087-2) [57 FR 60323, Dec. 18, 1992, as amended at 59 FR 33348, June 28, 1994; 59 FR 61215, Nov. 29, 1994; 64 FR 18974, 18975, Apr. 16, 1999; 64 FR 58952, Nov. 1, 1999; 66 FR 34762, June 29, 2001]