Title 20 — EducationRelease 119-73not60

§1019a Responsibilities of Covered Institutions, Institution-affiliated Organizations, and Lenders

Title 20 › Chapter 28— HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE › Subchapter I— GENERAL PROVISIONS › Part E— Lender and Institution Requirements Relating to Education Loans › § 1019a

Last updated Apr 5, 2026|Official source

Summary

Covered colleges and groups tied to them that use a preferred-lender agreement must give clear loan information online and in any materials about financial aid. They must show how much federal grant and loan money a student can get under subchapter IV. They must give the same loan details federal law requires for each loan the school recommends. They must say the school will process the paperwork if a student picks any eligible lender. For private education loans, schools and their related groups must post the disclosures the Federal Reserve requires. When giving a student information about a private loan, the school or group must give the Federal Reserve’s required facts, tell the student they might qualify for federal loans or other help under subchapter IV, and say that federal loan terms may be better. Information about private loans must look different from federal loan information. Schools and their groups cannot let a lender use the school’s name, logo, mascot, or other identifying symbols in a way that makes the loan look like the school is the lender. The lender’s name must appear on all materials about the private loan. Lenders must give required written disclosures to borrowers before they send out loan money. Lenders making federal loans must follow the federal loan disclosure rules. Lenders must report yearly to the Secretary any payments or expenses they give to school staff or to people from school-affiliated groups who help promote loans. Each report must list the amount, who got it, when, and what it was for. The Secretary will summarize these reports each year for the authorizing committees. Within 18 months after August 14, 2008, lenders in preferred-lender arrangements must annually certify they follow these rules, and auditors must report and attest to compliance when an audit is required.

Full Legal Text

Title 20, §1019a

Education — Source: USLM XML via OLRC

(a)(1)(A)In addition to the disclosures required by subsections (a)(27) and (h) of section 1094 of this title (if applicable), a covered institution, or an institution-affiliated organization of such covered institution, that participates in a preferred lender arrangement shall disclose—

(i)on such covered institution’s or institution-affiliated organization’s website and in all informational materials described in subparagraph (C) that describe or discuss education loans—

(I)the maximum amount of Federal grant and loan aid under subchapter IV available to students, in an easy to understand format;

(II)the information required to be disclosed pursuant to section 1019b(a)(2)(A)(i) of this title, for each type of loan described in section 1019(3)(A) of this title that is offered pursuant to a preferred lender arrangement of the institution or organization to students of the institution or the families of such students; and

(III)a statement that such institution is required to process the documents required to obtain a loan under part B of subchapter IV from any eligible lender the student selects; and

(ii)on such covered institution’s or institution-affiliated organization’s website and in all informational materials described in subparagraph (C) that describe or discuss private education loans—

(I)in the case of a covered institution, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section 1638(e)(11) of title 15, for each type of private education loan offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and

(II)in the case of an institution-affiliated organization of a covered institution, the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 1638(e)(1) of title 15, for each type of private education loan offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students.

(B)A covered institution, or an institution-affiliated organization of such covered institution, that provides information regarding a private education loan from a lender to a prospective borrower shall—

(i)provide the prospective borrower with the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 1638(e)(1) of title 15 for such loan;

(ii)inform the prospective borrower that—

(I)the prospective borrower may qualify for loans or other assistance under subchapter IV; and

(II)the terms and conditions of loans made, insured, or guaranteed under subchapter IV may be more favorable than the provisions of private education loans; and

(iii)ensure that information regarding private education loans is presented in such a manner as to be distinct from information regarding loans that are made, insured, or guaranteed under subchapter IV.

(C)The informational materials described in this subparagraph are publications, mailings, or electronic messages or materials that—

(i)are distributed to prospective or current students of a covered institution and families of such students; and

(ii)describe or discuss the financial aid opportunities available to students at an institution of higher education.

(2)A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans shall not agree to the lender’s use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols readily identified with such institution or organization, in the marketing of private education loans to students attending such institution in any way that implies that the loan is offered or made by such institution or organization instead of the lender.

(3)A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans shall ensure that the name of the lender is displayed in all information and documentation related to such loans.

(b)(1)(A)(i)For each education loan that is made, insured, or guaranteed under part B or D of subchapter IV (other than a loan made under section 1078–3 of this title or a Federal Direct Consolidation Loan), at or prior to the time the lender disburses such loan, the lender shall provide the prospective borrower or borrower, in writing (including through electronic means), with the disclosures described in subsections (a) and (c) of section 1083 of this title.

(ii)For each of a lender’s private education loans, the lender shall comply with the disclosure requirements under section 1638(e) of title 15.

(B)(i)Each lender of a loan made, insured, or guaranteed under part B of subchapter IV shall, on an annual basis, report to the Secretary—

(I)any reasonable expenses paid or provided under section 1085(d)(5)(D) of this title or paragraph (3)(B) or (7) of section 1094(e) of this title to any agent of a covered institution who—

(aa)is employed in the financial aid office of a covered institution; or

(bb)otherwise has responsibilities with respect to education loans or other financial aid of the institution; and

(II)any similar expenses paid or provided to any agent of an institution-affiliated organization who is involved in the practice of recommending, promoting, or endorsing education loans.

(ii)Each report described in clause (i) shall include—

(I)the amount for each specific instance in which the lender provided such expenses;

(II)the name of any agent described in clause (i) to whom the expenses were paid or provided;

(III)the dates of the activity for which the expenses were paid or provided; and

(IV)a brief description of the activity for which the expenses were paid or provided.

(iii)The Secretary shall summarize the information received from the lenders under this subparagraph in a report and transmit such report annually to the authorizing committees.

(2)Not later than 18 months after August 14, 2008—

(A)in addition to any other disclosure required under Federal law, each lender of a loan made, insured, or guaranteed under part B of subchapter IV that participates in one or more preferred lender arrangements shall annually certify the lender’s compliance with the requirements of this chapter; and

(B)if an audit of a lender is required pursuant to section 1078(b)(1)(U)(iii) of this title, the lender’s compliance with the requirements under this section shall be reported on and attested to annually by the auditor of such lender.

Reference

Citations & Metadata

Citation

20 U.S.C. § 1019a

Title 20 — Education

Last Updated

Apr 5, 2026

Release point: 119-73not60