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(GEN-01-06) Use of Electronic Signatures in the Federal Student Loan Programs

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

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 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


Greg Woods
Chief Operating Officer
Student Financial Assistance

Maureen A. McLaughlin
Deputy Assistant Secretary
Office of Postsecondary Education


Last Modified: 05/01/2001