Publication Date: May, 2001
DCL ID: GEN-01-06
Summary: Use of Electronic Signatures in the Federal Student Loan Programs
The attachment to this Dear Partner Letter was revised on August 17, 2001.
May 2001
GEN-01-06
Subject: Use of Electronic Signatures in the Federal Student Loan Programs
Dear Partner:
The purpose of this letter is to inform the student financial aid community
that, with the passage of the Electronic Signatures in Global and National Commerce
Act (E-Sign Act), lenders and borrowers in the federal student loan programs
will soon have the option of using electronic promissory notes and signatures.
The E-Sign Act provides, in part, that a signature, contract, or other record
may not be denied legal effect, validity, or enforceability solely because it
is in electronic form or because an electronic signature or electronic record
was used in its formation. The E-Sign Act will allow the Department, guaranty
agencies, lenders, schools, and borrowers to use electronic records and electronic
signatures in place of traditional paper records and handwritten signatures.
To facilitate the development of electronic processes under the E-Sign Act,
we are providing the attached Standards for Electronic Signatures in Electronic
Student Loan Transactions (Standards). These Standards provide guidance to FFEL
Program lenders and guaranty agencies, and to schools in their role as lenders
under the Federal Perkins Loan Program, regarding the use of electronic signatures
in conducting student loan transactions, including using electronic promissory
notes. We plan to review the guidance provided in the Standards as it is used
by program participants and issue revisions as appropriate.
As discussed more fully in the Standards, a borrower may use a "personal
identification number" (PIN) as part of the electronic signature process.
In the process we will develop for the Direct Loan Program, borrowers will use
the SFA-PIN that we provide to them as part of the financial aid application
process. To support the use of PINs by borrowers in the FFEL and Perkins Loan
programs, we are committed to providing, at lender option, a way to enable a
student to use that same SFA-PIN to sign an FFEL or Perkins promissory note
electronically.
If you have general questions regarding this letter, please contact John Kolotos
at (202)708-8901 or by e-mail at john_kolotos@ed.gov.
If you have any technical questions or questions regarding our SFA-PIN initiative
for FFEL and Perkins borrowers, please contact Neil Sattler at (202) 205-4348
or by e-mail at neil_sattler@ed.gov.
Sincerely,
Greg Woods
Chief Operating Officer
Student Financial Assistance
Maureen A. McLaughlin
Deputy Assistant Secretary
Office of Postsecondary Education
Attachments/Enclosures:
Standards for Electronic Signatures in Electronic Student Loan Transactions in PDF, 79KB, 15 pgs
