Luckily we have managed to avoid (though not purposefully) applications for education loans.

Low and behold, our bank President walks in with an approval for a personal unsecured loan and the purpose is to pay tuition for his daughters. I think it is for private school tuition (for high school).

So, can someone direct me to something that explains what the heck we need to do in terms of disclosures, etc?

The disclosures are awful so we decided not to do any closed end loans for education purposes. Advise your President to take out a Home Equity Line of Credit instead. Loans secured by a residence are not covered by the new rules......

To my knowledge, PEL loans cover post-secondary education loans. Your loan for high school tuition should be fine.


Sec. 226.46 (b)(2)Institution of higher education has the same meaning as in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001–1002) and the implementing regulations published by the U.S. Department of Education.

From 20 USC 1001-1002
"(a) Institution of higher education For purposes of this chapter, other than subchapter IV, the term "institution of higher education" means an educational institution in any State that - (1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate; (2) is legally authorized within such State to provide a program of education beyond secondary education; (3) provides an educational program for which the institution awards a bachelor's degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree; (4) is a public or other nonprofit institution; and (5) is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for the granting of preaccreditation status, and the Secretary has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time."

If I'm not mistaken this would not be considered a post secondary education loan and therefore would not fall under the Private Education Loan requirements.

What are the Private Education Loan requirements?

Click on "Read a Reg" at the top of the page then click on Reg Z and then go to Subpart F.

A search will also produce a lot of discussion.

Due to the disclosure requirements and the fact we only did maybe 5 or 6 per year we have discontinued making loans for educational purposes.

Thanks for the quick response Dan.