Current through Register Vol. 54, No. 45, November 9, 2024
Section 121.181 - Submission and processing of applications(a)Applicant. An applicant desiring to secure a Federal Consolidation Loan guaranty shall obtain from a participating lender or from the Agency a loan application packet containing the Federal Consolidation Loan Application/Promissory Note form. The information provided on the form will be used to determine the eligibility of the applicant to receive a Federal Consolidation Loan. The applicant shall complete the loan application and read, sign and date the promissory note that is part of the loan application form. After completing this form, the applicant shall retain a copy and forward the remaining copies of the form to the lender or to the Agency as instructed on the form.(b)Lender. If the form is sent to the lender, the lender shall make sure the applicant has completed the application/promissory note and signed and dated the form. The lender shall obtain loan payoff data concerning the loans to be consolidated from the creditors holding the loans. The lender shall determine to its satisfaction that each loan being consolidated is a legal, valid and binding obligation of the borrower, that each loan was made and serviced in compliance with applicable law and regulations, and, in the case of Federal Family Education Loans that the guaranty on the loan is still in effect. The lender shall electronically or by other means forward a copy of the application/promissory note form to the Agency.(c)PHEAA. The Agency will complete processing of the loan application and make a final determination of the amount of loan assistance the applicant is entitled to obtain. The Agency will then electronically or by other means inform the lender of the amount of the guaranty.(d)Lender. The lender shall provide the borrower with a Federal Consolidation Loan Repayment Schedule Disclosure Statement and issue sufficient loan disbursement checks to discharge the borrower's liability on the loans selected and approved for consolidation. An adverse action notice will be provided to the borrower by the lender if Federal Consolidation Loan assistance is denied.The provisions of this §121.181 adopted July 22, 1988, effective 7/23/1988, 18 Pa.B. 3208; amended July 12, 1996, effective 7/13/1996, 26 Pa.B. 3321.The provisions of this §121.181 issued under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. § 5104); amended under section 4 of the act of August 7, 1963 (P. L. 549, No. 290) (24 P. S. § 5104); section 1 of the act of January 25, 1966 (P. L. 1546, No. 541) (24 P. S. § 5151); the act of July 18, 1974 (P. L. 483, No. 174) (24 P. S. §§ 5181-5189); the act of July 1, 1988 (P. L. 1259, No. 155) (24 P. S. §§ 5191-5197); and the act of June 26, 1992 (P. L. 322, No. 64) (24 P. S. §§ 5198.1-5198.7).