California’s new Student Loan Servicing Act (Cal. A.B. 2251) goes into effect on July 1, 2018. Its requirements reach beyond schools in California – it requires student loan servicers (including schools) located in California servicing loans made to residents of any state, as well as servicers (including schools) located outside of California servicing loans made to California residents, to obtain a license from the Department of Business Oversight.
Does this affect you?
Do you represent a for-profit postsecondary educational institution?
If not, then this act does not affect you.
If you do, then you must be licensed by the state if you have students with loans/payment plans:
- That include interest
-or-
- Extend beyond graduation
This regulation applies to all for-profit postsecondary schools that are located in California as well as schools outside of California that have students who live in California with such loans/payment plans.
What about existing loans that we have already set up with students?
The law also applies to existing as well as new loan agreements.
Why is this important?
If you are not licensed, you will not be compliant. Penalties for violations are substantial – up to $2,500 for each violation.
What’s the good news?
TFC Tuition Financing is licensed in California. An industry leader for nearly 50 years, TFC has partnered with thousands of schools nationwide. Transferring existing accounts is simple. Experience best-in-class servicing and account management with our web-based technology platform, ensured regulatory compliance and data security.
Please contact TFC with any questions or to get started now by clicking here.
