July 30, 2009
Federal Reserve approves final amendments to Regulation Z that revise disclosure requirements for private education loans
For immediate release
The Federal Reserve Board on Thursday approved final amendments to Regulation Z (Truth in Lending) that revise the disclosure requirements for private education loans.
The amendments implement provisions of the Higher Education Opportunity Act (HEOA) enacted in August 2008. Under the amendments, creditors that extend private education loans must provide disclosures about loan terms and features on or with the loan application and must also disclose information about federal student loan programs that may offer less costly alternatives. Additional disclosures must be provided when the loan is approved and when the loan is consummated. The Board is also providing model disclosure forms that creditors could use to comply with the new disclosure requirements.
The new disclosure requirements apply to loans made expressly for postsecondary educational expenses but do not apply where educational expenses are funded by credit card advances, or real-estate-secured loans. In addition, the amendments do not apply to education loans made, insured, or guaranteed by the federal government, which are subject to disclosure rules issued by the Department of Education.
The Board's amendments also implement the HEOA's restrictions on using the name, emblem, or mascot of an educational institution in a way that implies that the institution endorses the creditor's loans.
The mandatory effective date for the amendments is 180 days after publication in the Federal Register, which is expected shortly.
Model forms and samples:
- H-18 (68 KB PDF) Private Education Loan Application and Solicitation Model Form
- H-19 (70 KB PDF) Private Education Loan Approval Model Form
- H-20 (63 KB PDF) Private Education Loan Final Model Form
- H-21 (188 KB PDF) Private Education Loan Application and Solicitation Sample
- H-22 (86 KB PDF) Private Education Loan Approval Sample
- H-23 (75 KB PDF) Private Education Loan Final Sample