Student Loan Regulations

How to make sense of federal student loan laws and regulations

As you research private student loans to supplement the federal loans and aid you've received, you might be wondering what steps the government has taken to protect your rights as a borrower. In fact, you’ll find the federal government is consistently working on new student loan laws and regulations to ensure responsible lending practices among all lenders. The federal government has always required student loan lenders to exercise the same responsibility, equal access and fairness it requires of every financial institution that lends money to the public. Because of this commitment to student borrowers, the government continuously reevaluates laws and regulations around student loans to ensure that borrowers are protected. You can learn more about how these student loan laws and regulations impact you as a borrower in this guide from Citizens Bank.

How do federal student loan laws benefit the borrower?

The federal government continuously passes new student loan laws (and refines existing legislation) in order to ensure all borrowers are subject to fair lending practices. These student loan laws and regulations are designed to do the following:

  • Ensure students have access to all lenders of their choice, including those not found on schools' preferred lender lists.

  • Mandate all preferred lender lists be created with borrowers’ best interests in mind.

  • Require lenders to fully and prominently disclose all terms, conditions and incentives of each loan.

  • Ban lenders from staffing school financial aid offices.

  • Prohibit gifts and revenue-sharing agreements between lenders and schools.

  • Require all educational institutions to disclose any relationships with lenders.

  • Prohibit lenders from marketing loans so as to imply institutional endorsement.

  • Require educational institutions to inform all students that funds from any eligible lender will be accepted.

  • Protect students from aggressive marketing practices.

  • Require lenders to inform potential borrowers that federal aid is available and that federal loans may have different terms than private alternatives.

  • Provide students with information on all federal student aid opportunities through a "one-stop" link on the U.S. Department of Education's website.

For more details on how federal laws and regulations govern student loans, talk to the financial aid office of the institution you're attending or considering attending.

Learn more about student loan options from Citizens Bank

As a preferred lender at many institutions, Citizens Bank has a history of consistently providing high-quality service and competitive products designed with borrowers’ best interests in mind. The Citizens Bank Student Loan™ and the Citizens Bank Student Loan™ for Parents are two options featuring competitive interest rates, flexible repayment plans and a variety of terms for borrowers to choose from. If you’re interested in learning more about either loan or have questions about how Citizens Bank ensures our offerings are aligned with all federal student loan laws and regulations, contact a Student Lending Specialist today.

Additional student loan and college planning resources

What is the Difference Between Stafford and Perkins Student Loans?
When to File as an Independent Student
What Can Private Student Loan Money Be Spent On?
Choosing a Lender for Your Student Loans
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