If we closed a loan prior to the new private education loan rules and the purpose was to pay-off a student loan at another FI, is it considered a PEL if we renew it today? I believe it is because we will be refinancing a loan org. to pay-off a student loan, but I want to be sure.

thanks,

Bump

If it's a renewal (no new money) do we need to do PEL disclosures?

Yes.In reviewing the final student loan regulations released by the Federal Reserve on August 14, 2009, the following is found in the discussion within the preamble to the regulations.



“The final rules require a complete disclosure at the time the credit is extended. In addition, new disclosures are required under § 226.20(a) in the case of a refinancing of a loan.”



So, unfortunately, the refinancing of any current loan will fall under all the new student loan requirements, which will include the application disclosures, the pre-closing disclosures and the final disclosures at loan closing along with the right of rescission.

If it isn't a new note (it's only an extension of the current terms) you still have to do the disclosures?

You would have to look at 226.20 to determine whether it is a refinance or not. No refinance - no new disclosures, regardless of the subsection of Reg. Z the loan would fall under.

Thank you

The bank made some education loans prior to Feb. 14, 2010 which are now maturing. The customer would like to consolidate these "student loans" into one loan. So it sounds like the application disclosure must be given with a consolidation loan. I'm a little confused as to how to complete the Loan Cost Examples which state under Repayment Option, "while enrolled in school."