AwardYear: 1998-1999 EnterChapterNo: 6 EnterChapterTitle: Federal Perkins Loan Program SectionNumber: 10 SectionTitle: Credit Bureau Reporting PageNumbers: 103-104 [[34 CFR 674.31]] A promissory note for a Federal Perkins or National Direct Student Loan (NDSL) made by a school on or after July 23, 1992 must state that the school is required to disclose to any one national credit bureau the amount of the loan made to the borrower and that if the borrower defaults on the loan, the school must disclose that the borrower has defaulted, along with other relevant information, to the same national credit bureau to which it originally reported the loan. [[Provide information to student]] Before a school makes its first disbursement to a student, the school must provide the student with certain information, including a written statement indicating that the school must report any default on the loan to a national credit bureau. This statement may be on the written application material, on the promissory note, or on a separate written form. [[Report disbursement to credit bureau]] At the time each disbursement is made, the school must report to any one national credit bureau with which the U.S. Department of Education has an agreement the amount of the disbursement, the date the disbursement was made, and the balance outstanding on the loan. [[Credit bureaus with which the Department has agreements]] The Department has entered into an agreement with each of the four national credit bureaus listed below. In order to comply with the credit-bureau reporting requirement, schools should enter into an agreement with any of the following national credit bureaus: Trans Union: contact Jeff Bugajski 312/466-7862 Experience (formerly TRW): 800/831-5614 contact "Customer Service" Ext. 3 CBI Equifax: ask for the telephone number of 770/740-4376 the CBI Equifax "territory" servicing your school Consumer Credit Association, Inc.: contact the 713/589/1190 Manager of Data Management Services Ext. 2101 Each credit bureau charges a fee for its services. These fees differ from national credit bureau to national credit bureau. These bureaus also have affiliated credit bureaus, which may have different fees from those of the national credit bureaus. The Department does not keep a list of these affiliated bureaus and their fees. A school must obtain the Department's approval before using an affiliated credit bureau. The cost associated with reporting Perkins Loan disbursements to a national credit bureau may not be charged against the Perkins Loan Fund. However, the school may use its administrative cost allowance to pay for these charges. Collection costs, which include the costs associated with reporting a defaulted Perkins Loan borrower to a national credit bureau, must be charged to the borrower. The fund can be charged for these costs only in relation to the amount collected from the bureau, as described in Section 7 of this chapter. [[Disclosure of borrower's account information]] The Privacy Act authorizes disclosure of a borrower's account information to creditors without the borrower's consent if such a disclosure would help enforce the terms and conditions of the loan. This authorization permits the release of information concerning loans in both default and nondefault status, and the authorization applies whether the reporting takes place at the time the loan is being disbursed or at the time the loan is in default status. Reporting good credit history (as well as reporting defaulted loans) is essential to ensure that current and future creditors have complete information regarding the credit obligations of the borrower. The Fair Credit Reporting Act allows a borrower/debtor to appeal the accuracy and validity of the information reported to the credit bureau and reflected in the credit report. The school should be aware of this right and should be prepared to handle and potentially accept the borrower's correction of information in accordance with the provisions of the act. |