On August 14, the Federal Reserve Board issued final rules that will affect schools that offer institutional loans (including some emergency loans) or have any students that utilize private education loans. These final rules will become effective Feb. 14, 2010, and aid administrators should start becoming familiar with them now in preparation for their implementation.

Title X of the Higher Education Opportunity Act (HEOA) - enacted just over a year ago - amends the Truth in Lending Act (TILA) by adding disclosure and timing requirements that apply to creditors - including institutions - making private education loans. The HEOA also amends TILA by adding limitations on certain practices by creditors, including limitations on co-branding. The proposal requires that creditors obtain a self-certification form signed by the consumer before consummating the loan. The form is completed using information provided by the student's institution to the student or lender. The amended TILA also requires creditors with preferred lender arrangements with educational institutions to provide certain information to those institutions.

On March 24, the Federal Reserve released proposed rules on the Truth in Lending Act (TILA) regulations that were being updated in accordance with changes from the Higher Education Opportunity Act (HEOA). Four other higher education associations joined with NASFAA in submitting comments to the Federal Reserve on proposed TILA regulations in May.

NASFAA has provided a preliminary summary of the final rules that will most affect schools, and more will be shared through a NASFAA Webinar tentatively scheduled for mid-November. Members with questions or concerns on these final rules should direct them to policy@nasfaa.org in preparation for that Webinar.

Posted 08/25/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.