- Truth in Lending (TILA) for Institutional Loans
On July 30, 2009, the Federal Reserve Board approved final amendments to Regulation Z (TRUTH IN LENDING) that revise the disclosure requirements for private education loans, also known as Institutional 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 (institutional 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 new disclosure requirements for private education loans (Institutional Loans) will change the process for applying for and receiving private education loans. The process will take longer from application(sent with the award letter) to disbursement, and the borrower will have additional responsibilities beyond the application, including acknowledgement of disclosure statements and completion of the Self-Certification form.
Any student awarded an Institutional Loan from Suffolk University will be required to complete and confirm loan documents. These documents include a Master Promissory Note, Entrance Counseling, a yearly Disclosure Statement, and a yearly confirmation and completion of Truth in Lending (TILA) documents.
Please Note: These loan funds will not be disbursed to your student account until after all the required documents are completed and confirmed. Failure to complete the loan signing process will result in the cancellation of the loan award.
The amendments implement provisions of the Higher Education Opportunity Act (HEOA) enacted in August 2008. Under the amendments, creditors that extend private education loans (institutional 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 new disclosure requirements for private education loans (Institutional Loans) will change the process for applying for and receiving private education loans. The process will take longer from application(sent with the award letter) to disbursement, and the borrower will have additional responsibilities beyond the application, including acknowledgement of disclosure statements and completion of the Self-Certification form.
Any student awarded an Institutional Loan from Suffolk University will be required to complete and confirm loan documents. These documents include a Master Promissory Note, Entrance Counseling, a yearly Disclosure Statement, and a yearly confirmation and completion of Truth in Lending (TILA) documents.
Please Note: These loan funds will not be disbursed to your student account until after all the required documents are completed and confirmed. Failure to complete the loan signing process will result in the cancellation of the loan award.