§ 1019b. Loan information to be disclosed and model disclosure form for covered institutions, institution-affiliated organizations, and lenders participating in preferred lender arrangement
(a)
Duties of the Secretary
(1)
Determination of minimum disclosures
(A)
In general
Not later than 18 months after August 14, 2008, the Secretary, in coordination with the Board of Governors of the Federal Reserve System, shall determine the minimum information that lenders, covered institutions, and institution-affiliated organizations of such covered institutions participating in preferred lender arrangements shall make available regarding education loans described in section
1019
(3)(A) of this title that are offered to students and the families of such students.
(B)
Consultation and content of minimum disclosures
In carrying out subparagraph (A), the Secretary shall—
(i)
consult with students, the families of such students, representatives of covered institutions (including financial aid administrators, admission officers, and business officers), representatives of institution-affiliated organizations, secondary school guidance counselors, lenders, loan servicers, and guaranty agencies;
(ii)
include, in the minimum information under subparagraph (A) that is required to be made available, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section
1638
(e)(1) of title
15, modified as necessary to apply to such loans; and
(iii)
consider the merits of requiring each covered institution, and each institution-affiliated organization of such covered institution, with a preferred lender arrangement to provide to prospective borrowers and the families of such borrowers the following information for each type of education loan offered pursuant to such preferred lender arrangement:
(I)
The interest rate and terms and conditions of the loan for the next award year, including loan forgiveness and deferment.
(II)
Information on any charges, such as origination and Federal default fees, that are payable on the loan, and whether those charges will be—
(IV)
The average amount borrowed from the lender by students who graduated from such institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable, and who obtained loans of such type from the lender for the preceding year.
(V)
The amount the borrower may pay in interest, based on a standard repayment plan and the average amount borrowed from the lender by students who graduated from such institution in the preceding year and who obtained loans of such type from the lender for the preceding year, for—
(2)
Required disclosures
After making the determinations under paragraph (1), the Secretary, in coordination with the Board of Governors of the Federal Reserve System and after consultation with the public, shall—
(A)
(i)
provide that the information determined under paragraph (1) shall be disclosed by covered institutions, and institution-affiliated organizations of such covered institutions, with preferred lender arrangements to prospective borrowers and the families of such borrowers regarding the education loans described in section
1019
(3)(A) of this title that are offered pursuant to such preferred lender arrangements; and
(B)
develop a model disclosure form that may be used by covered institutions, institution-affiliated organizations, and preferred lenders that includes all of the information required under subparagraph (A)(i) in a format that—
(i)
is easily usable by students, families, institutions, institution-affiliated organizations, lenders, loan servicers, and guaranty agencies; and
(ii)
is similar in format to the form developed by the Board of Governors of the Federal Reserve System under paragraphs (1) and (5)(A) of section
1638
(e) [1] of title
15, in order to permit students and the families of students to easily compare private education loans and education loans described in section
1019
(3)(A) of this title; and
(b)
Duties of lenders
Each lender that has a preferred lender arrangement with a covered institution, or an institution-affiliated organization of such covered institution, with respect to education loans described in section
1019
(3)(A) of this title shall annually, by a date determined by the Secretary, provide to such covered institution or such institution-affiliated organization, and to the Secretary, the information the Secretary requires pursuant to subsection (a)(2)(A)(i) for each type of education loan described in section
1019
(3)(A) of this title that the lender plans to offer pursuant to such preferred lender arrangement to students attending such covered institution, or to the families of such students, for the next award year.
(c)
Duties of covered institutions and institution-affiliated organizations
(1)
Providing information to students and families
(A)
In general
Each covered institution, and each institution-affiliated organization of such covered institution, that has a preferred lender arrangement shall provide the following information to students attending such institution, or the families of such students, as applicable:
(i)
The information the Secretary requires pursuant to subsection (a)(2)(A)(i), for each type of education loan described in section
1019
(3)(A) of this title offered pursuant to a preferred lender arrangement to students of such institution or the families of such students.
(ii)
(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 to the covered institution, for each type of private education loan offered pursuant to such preferred lender arrangement to students of such institution or the families of such students.
(II)
In the case of an institution-affiliated organization, 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 such preferred lender arrangement to students of the institution with which such organization is affiliated or the families of such students.
(2)
Annual report
Each covered institution, and each institution-affiliated organization of such covered institution, that has a preferred lender arrangement, shall—
(A)
prepare and submit to the Secretary an annual report, by a date determined by the Secretary, that includes, for each lender that has a preferred lender arrangement with such covered institution or organization—
(ii)
a detailed explanation of why such covered institution or institution-affiliated organization entered into a preferred lender arrangement with the lender, including why the terms, conditions, and provisions of each type of education loan provided pursuant to the preferred lender arrangement are beneficial for students attending such institution, or the families of such students, as applicable; and
(3)
Code of conduct
(B)
Applicable code of conduct
For purposes of subparagraph (A), an institution-affiliated organization of a covered institution shall—
(i)
comply with the code of conduct developed and published by such covered institution under subparagraphs (A) and (B) of section
1094
(a)(25) of this title;
[1] See References in Text note below.