Regents (Board Of), Administration

Rule R765-612

Lender Participation

Notice of Proposed Rule

(Repeal)

DAR File No.: 34721
Filed: 04/26/2011 04:53:53 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule outlines lender requirements to participate as an originator of federal student loans in the Utah Higher Education Assistance Authority loan program. Federal law (H.R. 4872) passed by Congress and signed by the President in March 2010 ended the Federal Family Education Loan Program in which private lenders participated. Since lenders, including Utah banks and credit unions, no longer make federal student loans, there is no reason to maintain this rule.

Summary of the rule or change:

This rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Title 53B, Chapter 12

Anticipated cost or savings to:

the state budget:

There is no cost nor savings to any state budget by repealing this rule since this rule only applied to commercial lenders who formerly participated in the federal student loan program.

local governments:

There is no cost nor savings to any local government by repealing this rule since this rule only applied to commercial lenders who formerly participated in the federal student loan program.

small businesses:

There is no cost nor savings to any small businesses by repealing this rule since this rule only applied to commercial lenders who formerly participated in the federal student loan program.

persons other than small businesses, businesses, or local governmental entities:

There is no cost nor savings to any individual by repealing this rule since this rule only applied to commercial lenders who formerly participated in the federal student loan program.

Compliance costs for affected persons:

There are no compliance costs for anyone as there are no affected persons. Lenders who provided funds for federal student loans can no longer offer those loans due to changes in federal law. Students were directly affected by this law but the repeal of this rule does not require their compliance nor assess any cost to them or the lenders.

Comments by the department head on the fiscal impact the rule may have on businesses:

With the demise of privately-funded federal student loans, there is no purpose in maintaining this rule.

William Sederburg, Commisioner of Higher Education

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Regents (Board Of)
Administration
60 SOUTH 400 WEST
SALT LAKE CITY, UT 84101-1284

Direct questions regarding this rule to:

• Ronell Crossley at the above address, by phone at 801-321-7291, by FAX at 801-321-7299, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

06/14/2011

This rule may become effective on:

06/23/2011

Authorized by:

William Sederburg, Commissioner

R765. Regents (Board of), Administration.

[ R765-612. Lender Participation.

R765-612-1. Purpose.

To establish the lender eligibility requirements for participation as an originating lender in the UHEAA loan program.

 

R765-612-2. References.

2.1 Utah Code Annotated Title 53B, Chapter 12.

2.2 Higher Education Act of 1965, as amended.

 

R765-612-3. Definitions.

3.1 Originating Lender. A lending institution which originates Federal Stafford, PLUS, SLS or Consolidation Loans.

3.2 Located in Utah. With respect to this rule, a lender is located in Utah if the lender has an office in Utah where the lender's full range of products and services is available to the lender's customers for routine business transactions. An office established for the sole purpose of collecting student loan applications is not sufficient to qualify a lender as being located in Utah.

 

R765-612-4. Policy.

4.1 To participate as an originating lender in the UHEAA loan program, a lender must:

4.1.1 be located in Utah;

4.1.2 be an eligible lender as defined by the Higher Education Act of 1965, as amended;

4.1.3 obtain a six-digit lender identification number issued by the U.S. Department of Education; and

4.1.4 execute an "Agreement to Guarantee Loans" with UHEAA.

4.2 A lender which meets the requirements of 4.1 may make loans guaranteed by UHEAA to any eligible borrower.

4.3 A lender which participates in the UHEAA loan program is considered pre-approved.

4.4 By disbursing the loan, the lender acknowledges its approval of the loan.

4.5 A guarantee issued by UHEAA may be cancelled by the lender, if the lender does not grant approval of the loan.

4.6 If the lender violates or fails to comply with the provisions of this policy or the Higher Education Act of 1965, as amended, the lender will be liable for any penalties, claims, actions and expenses relating to the violation. In addition, the lender may be subject to limitation, suspension or termination under the Higher Education Act of 1965, as amended.

 

KEY: higher education, student loans

Date of Enactment or Last Substantive Amendment: October 19, 2004

Notice of Continuation: October 20, 2006

Authorizing, and Implemented or Interpreted Law: 53B-12-101(6)]