[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: 34CFR682.414]



[Page 752-754]

 

                           TITLE 34--EDUCATION

 

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

 

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

 

 Subpart D_Administration of the Federal Family Education Loan Programs 

                          by a Guaranty Agency

 

Sec. 682.414  Records, reports, and inspection requirements for guaranty 

agency programs.



    (a) Records. (1)(i) The guaranty agency shall maintain current, 

complete, and accurate records of each loan that it holds, including, 

but not limited to, the records described in paragraph (a)(1)(ii) of 

this section. The records must be maintained in a system that allows 

ready identification of each loan's current status, updated at least 

once every 10 business days. Any reference to a guaranty agency under 

this section includes a third-party servicer that administers any aspect 

of the FFEL programs under a contract with the guaranty agency, if 

applicable.

    (ii) The agency shall maintain--

    (A) All documentation supporting the claim filed by the lender;

    (B) Notices of changes in a borrower's address;

    (C) A payment history showing the date and amount of each payment 

received from or on behalf of the borrower by the guaranty agency, and 

the amount of each payment that was attributed to principal, accrued 

interest, and collection costs and other charges, such as late charges;

    (D) A collection history showing the date and subject of each 

communication between the agency and the borrower or endorser relating 

to collection of a defaulted loan, each communication between the agency 

and a credit bureau regarding the loan, each effort to locate a borrower 

whose address was unknown at any time, and each request by the lender 

for default aversion assistance on the loan;

    (E) Documentation regarding any wage garnishment actions initiated 

by the agency on the loan;

    (F) Documentation of any matters relating to the collection of the 

loan by tax-refund offset; and

    (G) Any additional records that are necessary to document its right 

to receive or retain payments made by the Secretary under this part and 

the accuracy of reports it submits to the Secretary.

    (2) A guaranty agency must retain the records required for each loan 

for not less than 3 years following the date the loan is repaid in full 

by the borrower, or for not less than 5 years following the date the 

agency receives payment in full from any other source. However, in 

particular cases, the Secretary may require the retention of records 

beyond these minimum periods.

    (3) A guaranty agency shall retain a copy of the audit report 

required under Sec. 682.410(b) for not less than five years after the 

report is issued.

    (4)(i) The guaranty agency shall require a participating lender to 

maintain current, complete, and accurate records of each loan that it 

holds, including, but not limited to, the records described in paragraph 

(a)(4)(ii) of this section. The records must be maintained in a system 

that allows ready identification of each loan's current status.

    (ii) The lender shall keep--

    (A) A copy of the loan application if a separate application was 

provided to the lender;

    (B) A copy of the signed promissory note;

    (C) The repayment schedule;

    (D) A record of each disbursement of loan proceeds;

    (E) Notices of changes in a borrower's address and status as at 

least a half-time student;

    (F) Evidence of the borrower's eligibility for a deferment;

    (G) The documents required for the exercise of forbearance;

    (H) Documentation of the assignment of the loan;

    (I) A payment history showing the date and amount of each payment 

received from or on behalf of the borrower, and the amount of each 

payment that was attributed to principal, interest, late charges, and 

other costs;

    (J) A collection history showing the date and subject of each 

communication between the lender and the borrower or endorser relating 

to collection of a delinquent loan, each communication other than 

regular reports by the lender showing that an account is current, 

between the lender and a credit bureau regarding the loan, each effort 

to locate a borrower whose address is unknown at any time, and each 

request by the lender for default aversion assistance on the loan;

    (K) Documentation of any MPN confirmation process or processes; and



[[Page 753]]



    (L) Any additional records that are necessary to document the 

validity of a claim against the guarantee or the accuracy of reports 

submitted under this part.

    (iii) Except as provided in paragraph (a)(4)(iv) of this section, a 

lender must retain the records required for each loan for not less than 

3 years following the date the loan is repaid in full by the borrower, 

or for not less than five years following the date the lender receives 

payment in full from any other source. However, in particular cases, the 

Secretary or the guaranty agency may require the retention of records 

beyond this minimum period.

    (iv) A lender shall retain a copy of the audit report required under 

Sec. 682.305(c) for not less than five years after the report is 

issued.

    (5)(i) A guaranty agency or lender may store the records specified 

in paragraphs (a)(4)(ii)(C)-(L) of this section in accordance with 34 

CFR 668.24(d)(3)(i) through (iv).

    (ii) If a promissory note was signed electronically, the guaranty 

agency or lender must store it electronically and it must be retrievable 

in a coherent format.

    (iii) A lender or guaranty agency holding a promissory note must 

retain the original or a true and exact copy of the promissory note 

until the loan is paid in full or assigned to the Secretary. When a loan 

is paid in full by the borrower, the lender or guaranty agency must 

return either the original or a true and exact copy of the note to the 

borrower or notify the borrower that the loan is paid in full, and 

retain a copy for the prescribed period.

    (b) Reports. A guaranty agency shall accurately complete and submit 

to the Secretary the following reports:

    (1) A report concerning the status of the agency's reserve fund and 

the operation of the agency's loan guarantee program at the time and in 

the manner that the Secretary may reasonably require. The Secretary does 

not pay the agency any funds, the amount of which are determined by 

reference to data in the report, until a complete and accurate report is 

received.

    (2) Annually, for each State in which it operates, a report of the 

total guaranteed loan volume, default volume, and default rate for each 

of the following categories of originating lenders on all loans 

guaranteed after December 31, 1980:

    (i) Schools.

    (ii) State or private nonprofit lenders.

    (iii) Commercial financial institutions (banks, savings and loan 

associations, and credit unions).

    (iv) All other types of lenders.

    (3) By July 1 of each year, a report on--

    (i) Its eligibility criteria for schools and lenders;

    (ii) Its procedures for the limitation, suspension, and termination 

of schools and lenders;

    (iii) Any actions taken in the preceding 12 months to limit, 

suspend, or terminate the participation of a school or lender in the 

agency's program; and

    (iv) The steps the agency has taken to ensure its compliance with 

Sec. 682.410(c), including the identity of any law enforcement agency 

with which the agency has made arrangements for that purpose.

    (4) Information consisting of those extracts from its computer data 

base, and supplied in the medium and the format, prescribed in the 

Stafford, SLS, and PLUS Loan Tape Dump Procedures (ED Forms 1070 and 

1071).

    (5) Any other information concerning its loan insurance program 

requested by the Secretary.

    (c) Inspection requirements. (1) For purposes of examination of 

records, references to an institution in 34 CFR 668.24(f) (1) through 

(3) shall mean a guaranty agency or its agent.

    (2) A guaranty agency shall require in its agreement with a lender 

or in its published rules or procedures that the lender or its agent 

give the Secretary or the Secretary's designee and the guaranty agency 

access to the lender's records for inspection and copying in order to 

verify the accuracy of the information provided by the lender pursuant 

to Sec. 682.401(b) (21) and (22), and the right of the lender to 

receive or retain payments made under this part, or to permit the 

Secretary or the agency to enforce any right acquired by the



[[Page 754]]



Secretary or the agency under this part.



(Approved by the Office of Management and Budget under control number 

1845-0020)



(Authority: 20 U.S.C. 1078, 1078-1, 1078-2, 1078-3, 1082, 1087)



[57 FR 60323, Dec. 18, 1992, as amended at 58 FR 9120, Feb. 19, 1993; 59 

FR 22455, 22489, Apr. 29, 1994; 59 FR 33358, June 28, 1994; 59 FR 34964, 

July 7, 1994; 61 FR 60493, Nov. 27, 1996; 64 FR 58632, Oct. 29, 1999; 64 

FR 58963, Nov. 1, 1999; 65 FR 65621, Nov. 1, 2000; 66 FR 34764, June 29, 

2001; 67 FR 67080, Nov. 1, 2002]