§292n Additional Requirements for Institutions and Lenders

Summary

The Secretary can make rules for schools and lenders that deal with loans insured under this program. The rules can require fiscal audits; set basic financial and administrative standards for qualifying schools; let the Secretary limit, suspend, or end a school’s eligibility after notice and a hearing; require collection of information from borrowers, lenders, or schools to enforce the law; make sure borrowers are charged no more in tuition and fees than nonborrowers; require reporting of loan details to the Office of Health Education Assistance Loan Default Reduction; allow schools to withhold services like transcripts or alumni services if a borrower defaults (except for a borrower in bankruptcy); and require lenders to offer different repayment plans, including fixed-rate, graduated (which may allow negative amortization), and short-term income-dependent payments followed by level payments. Eligible schools must keep and give the Secretary and lenders the student’s name, address, postgraduate destination, and other reasonable identifying information for each student with an insured loan. Each participating school must hold a required workshop at the start of every academic year that all student borrowers must attend.