§292n Additional requirements for institutions and lenders

Summary

The Secretary can make rules that require schools and lenders to follow certain steps for loans insured under this program. These rules can require fiscal audits of schools, set standards for a school’s financial responsibility and ability to run aid programs, and allow the Secretary to limit or end a school’s eligibility after giving notice and a chance for a hearing. The rules can also require collection of borrower/lender/school information to follow section 292d, require borrowers be charged no more than other students, require loan reporting to the Office of Health Education Assistance Loan Default Reduction (including origination and sale dates, loan holder, and borrower status), allow schools to withhold services from borrowers who default (except if the borrower has filed for bankruptcy), and require lenders to offer repayment choices such as fixed-rate plans, graduated plans (negative amortization allowed), and short-term income-based payments followed by level payments. Each school must keep and give the lender and the Secretary, on request, a student’s name, address, postgraduate destination, and other ID info for anyone with an insured loan. Each school must also hold a required workshop at the start of each academic year that all student borrowers must attend.