[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: 34CFR682.201]



[Page 636-639]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 682_FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM--Table of Contents

 

                      Subpart B_General Provisions

 

Sec. 682.201  Eligible borrowers.



    (a) Student borrower. Except for a refinanced SLS/PLUS loan made 

under Sec. 682.209 (e) or (f), a student is eligible to receive a 

Stafford loan, and an independent undergraduate student, a graduate or 

professional student, or, subject to paragraph (a)(3) of this section, a 

dependent undergraduate student, is eligible to receive an unsubsidized 

Stafford loan, if the student who is enrolled or accepted for enrollment 

on at least a half-time basis at a participating school meets the 

requirements for an eligible student under 34 CFR part 668, and--

    (1) In the case of an undergraduate student who seeks a Stafford 

loan or unsubsidized Stafford loan for the cost of attendance at a 

school that participates in the Pell Grant Program, has received a final 

determination, or, in the case of a student who has filed an application 

with the school for a Pell Grant, a preliminary determination, from the 

school of the student's eligibility or ineligibility for a Pell Grant 

and, if eligible, has applied for the period of enrollment for which the 

loan is sought;

    (2) In the case of any student who seeks an unsubsidized Stafford 

loan for the cost of attendance at a school that participates in the 

Stafford Loan Program, the student must--

    (i) Receive a determination of need for a subsidized Stafford loan; 

and

    (ii) If the determination of need is in excess of $200, have made a 

request to a lender for a subsidized Stafford loan;

    (3) For purposes of a dependent undergraduate student's eligibility 

for an additional unsubsidized Stafford loan amount, as described at 

Sec. 682.204(d), is a dependent undergraduate student for whom the 

financial aid administrator determines and documents in the school's 

file, after review of the family financial information provided by the 

student and consideration of the student's debt burden, that the 

student's parents likely will be precluded by exceptional circumstances 

(e.g., denial of a PLUS loan to a parent based on adverse credit, the 

student's parent receives only public assistance or disability benefits, 

is incarcerated, or his or her whereabouts are unknown) from borrowing 

under the PLUS Program and the student's family is otherwise unable to 

provide the student's expected family contribution. A parent's refusal 

to borrow a PLUS loan does not constitute an exceptional circumstance;

    (4)(i) Reaffirms any FFEL loan amount on which there has been a 

total cessation of collection activity,



[[Page 637]]



including all principal, interest, collection costs, legal costs, and 

late charges that have accrued on that amount up to the date of 

reaffirmation.

    (ii) For purposes of this section, reaffirmation means the 

acknowledgement of the loan by the borrower in a legally binding manner. 

The acknowledgement may include, but is not limited to, the borrower--

    (A) Signing a new promissory note that includes the same terms and 

conditions as the original note signed by the borrower or repayment 

schedule; or

    (B) Making a payment on the loan.

    (5) The suspension of collection activity has been lifted from any 

loan on which collection activity had been suspended based on a 

conditional determination that the borrower was totally and permanently 

disabled under Sec. 682.402(c).

    (6) In the case of a borrower whose prior loan under title IV of the 

Act was discharged after a final determination of total and permanent 

disability, the student must--

    (i) Obtain certification from a physician that the borrower is able 

to engage in substantial gainful activity;

    (ii) Sign a statement acknowledging that the FFEL loan the borrower 

receives cannot be discharged in the future on the basis of any 

impairment present when the new loan is made, unless that impairment 

substantially deteriorates; and

    (iii) In the case of a borrower whose previous loan under title IV 

of the Act was discharged due to a total and permanent disability on or 

after July 1, 2001 and before July 1, 2002, meets the requirements of 

paragraphs (a)(6)(i) and (a)(6)(ii) of this section. If the borrower 

applies for another loan within three years from the date that the 

borrower became totally and permanently disabled, as certified by the 

physician, the borrower must reaffirm the previously discharged loan 

before receiving the new loan.

    (7) In the case of a borrower whose prior loan under title IV of the 

HEA was conditionally discharged based on an initial determination that 

the borrower was totally and permanently disabled, the borrower must--

    (i) Comply with the requirements of paragraphs (a)(6)(i) and 

(a)(6)(ii) of this section; and

    (ii) Sign a statement acknowledging that--

    (A) The loan that has been conditionally discharged prior to a final 

determination of total and permanent disability cannot be discharged in 

the future on the basis of any impairment present when the borrower 

applied for a total and permanent disability discharge or when the new 

loan is made unless that impairment substantially deteriorates; and

    (B) Collection activity will resume on any loans in a conditional 

discharge period, as described in paragraph 682.402(c)(16).

    (8) In the case of any student who seeks a loan but does not have a 

certificate of graduation from a school providing secondary education or 

the recognized equivalent of such a certificate, the student meets the 

requirements under 34 CFR part 668.32(e).

    (9) Is not serving in a medical internship or residency program, 

except for an internship in dentistry.

    (b) Parent borrower. (1) A parent borrower, is eligible to receive a 

PLUS Program loan, other than a loan made under Sec. 682.209(e), if the 

parent--

    (i) Is borrowing to pay for the educational costs of a dependent 

undergraduate student who meets the requirements for an eligible student 

set forth in 34 CFR part 668;

    (ii) Provides his or her and the student's social security number;

    (iii) Meets the requirements pertaining to citizenship and residency 

that apply to the student in 34 CFR 668.33;

    (iv) Meets the requirements concerning defaults and overpayments 

that apply to the student in 34 CFR 668.35 and meets the requirements of 

judgment liens that apply to the student under 34 CFR 668.32(g)(3);

    (v) Except for the completion of a Statement of Selective Service 

Registration Status, complies with the requirements for submission of a 

Statement of Educational Purpose that apply to the student in 34 CFR 

part 668;

    (vi) Meets the requirements of paragraphs (a)(4), (a)(5), (a)(6), 

and (a)(7) of this section, as applicable; and



[[Page 638]]



    (vii) In the case of a Federal PLUS loan made on or after July 1, 

1993, does not have an adverse credit history or obtains an endorser who 

has been determined not to have an adverse credit history as provided in 

paragraph (b)(2)(ii) of this section.

    (2)(i) For purposes of this section, the lender must obtain a credit 

report on each applicant from at least one national credit bureau. The 

credit report must be secured within a timeframe that would ensure the 

most accurate, current representation of the borrower's credit history 

before the first day of the period of enrollment for which the loan is 

intended.

    (ii) Unless the lender determines that extenuating circumstances 

existed, the lender must consider each applicant to have an adverse 

credit history based on the credit report if--

    (A) The applicant is considered 90 or more days delinquent on the 

repayment of a debt; or

    (B) The applicant has been the subject of a default determination, 

bankruptcy discharge, foreclosure, repossession, tax lien, wage 

garnishment, or write-off of a Title IV debt, during the five years 

preceding the date of the credit report.

    (iii) Nothing in this paragraph precludes the lender from 

establishing more restrictive credit standards to determine whether the 

applicant has an adverse credit history.

    (iv) The absence of any credit history is not an indication that the 

applicant has an adverse credit history and is not to be used as a 

reason to deny a PLUS loan to that applicant.

    (v) The lender must retain a record of its basis for determining 

that extenuating circumstances existed. This record may include, but is 

not limited to, an updated credit report, a statement from the creditor 

that the borrower has made satisfactory arrangements to repay the debt, 

or a satisfactory statement from the borrower explaining any 

delinquencies with outstanding balances of less than $500.

    (3) For purposes of paragraph (b)(1) of this section, a ``parent'' 

includes the individuals described in the definition of ``parent'' in 34 

CFR 668.2 and the spouse of a parent who remarried, if that spouse's 

income and assets would have been taken into account when calculating a 

dependent student's expected family contribution.

    (c) Consolidation program borrower. (1) An individual is eligible to 

receive a Consolidation loan if the individual--

    (i) On the loans being consolidated--

    (A) Is, at the time of application for a Consolidation loan--

    (1) In a grace period preceding repayment;

    (2) In repayment status;

    (3) In a default status and has either made satisfactory repayment 

arrangements as defined in applicable program regulations or has agreed 

to repay the consolidation loan under the income-sensitive repayment 

plan described in Sec. 682.209(a)(7)(viii);

    (B) Not subject to a judgment secured through litigation, unless the 

judgment has been vacated; or

    (C) Not subject to an order for wage garnishment under section 488A 

of the Act, unless the order has been lifted;

    (ii) Certifies that no other application for a Consolidation loan is 

pending;

    (iii) Agrees to notify the holder of any changes in address; and

    (iv)(A) Certifies that the lender holds at least one outstanding 

loan that is being consolidated; or

    (B) Applies to any eligible consolidation lender if the borrower--

    (1) Has multiple holders of FFEL loans; or

    (2) Has been unable to receive from the holder of the borrower's 

outstanding loans, a Consolidation loan or a Consolidation loan with 

income-sensitive repayment.

    (2) A married couple is eligible to receive a Consolidation loan in 

accordance with this section if each--

    (i) Agrees to be held jointly and severally liable for the repayment 

of the total amount of the Consolidation loan;

    (ii) Agrees to repay the debt regardless of any change in marital 

status; and

    (iii) Meets the requirements of paragraph (c)(1) of this section, 

and only one must have met the requirements of paragraph (c)(1)(iv) of 

this section.

    (d) A borrower's eligibility to receive a Consolidation loan 

terminates upon



[[Page 639]]



receipt of a Consolidation loan except that--

    (1) Eligible loans received prior to the date a Consolidation loan 

was made and loans received during the 180-day period following the date 

a Consolidation loan was made, may be added to the Consolidation loan 

based on the borrower's request received by the lender during the 180-

day period after the date the Consolidation loan was made;

    (2) A borrower who receives an eligible loan after the date a 

Consolidation loan is made may receive a subsequent Consolidation loan; 

and

    (3) A Consolidation loan borrower may consolidate an existing 

Consolidation loan only if the borrower has at least one other eligible 

loan made before or after the existing Consolidation loan that will be 

consolidated.

    (e) In the case of a married couple, the loans of a spouse that are 

to be included in a Consolidation loan are considered eligible loans for 

the other spouse.



(Authority: 20 U.S.C. 1077, 1078, 1078-1, 1078-2, 1078-3, 1082, and 

1091)



[57 FR 60323, Dec. 18, 1992, as amended at 59 FR 25745, May 17, 1994; 59 

FR 33349, June 28, 1994; 59 FR 61215, Nov. 29, 1994; 60 FR 61756, 61815, 

Dec. 1, 1995; 60 FR 65021, Dec. 18, 1995; 62 FR 63433, Nov. 28, 1997; 64 

FR 18975, Apr. 16, 1999; 64 FR 58952, Nov. 1, 1999; 65 FR 65619, 65691, 

Nov. 1, 2000; 66 FR 44007, Aug. 21, 2001; 68 FR 75428, Dec. 31, 2003]