Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Federal Perkins Loan Program - Credit Bureau Reporting

AwardYear: 1997-1998
EnterChapterNo: 6
EnterChapterTitle: Federal Perkins Loan Program
SectionNumber: 10
SectionTitle: Credit Bureau Reporting
PageNumbers: 105-106

[[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 default 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 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 -- Ext. 3
contact "Customer Service"

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

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.

Last Modified: 07/20/1998