Maryland Legislation Recap
Maryland passed student debt letter legislation in May 2017. However, prior to implementation the legislation was repealed but then also simultaneously re-enacted. In the first version from 2017, legislators limited the requirement to post-secondary schools that received state funds. In the new 2018 legislation, they made the requirement broader, encompassing any post-secondary school that offers an educational program in the state and receives education loan information from the U.S. Department of Education (ED).
These schools must provide each undergraduate student enrolled in the school who applies for federal student aid in the applicable award year with specific information as reported on the student’s Student Aid Report (SAR). The communication should be provided to students annually with the student’s financial aid award notice.
What information must schools report in order to meet the requirements of the law?
Schools must provide an estimate of:
- The total amount of outstanding loans (not Parent Plus or Private loans) taken out by the student, not limited to what they received at the current school.
- The monthly repayment amount for a 10-year period for every $1,000 owed by the borrower. With a statement saying “The actual repayment amount is dependent on the following factors:
a. The total amount borrowed.
b. The interest rate at the time the funds are borrowed and the amount of interest that accrues over the course of the loan.
c. The length of the repayment term of the loans.
d. The decisions a student makes relating to Income-Based Repayment Plans, Deferments and Loan Forgiveness."
- The lifetime limit for undergraduate student borrowers.
- A link to the NSLDS student website and an Income Driven Repayment Plan website.
- The address of the financial aid office where the student may seek financial aid counseling.
Are there any additional requirements or statements?
Schools may include the following statement:
The information provided by [school’s name] was obtained from your SAR issued by ED for the most recent award year. It is based on assumptions made by ED as reported in your SAR and is not meant as a guarantee or promise. This information does not include Parent Plus or private student loans.
Here's how to navigate it
Student debt letters are a great way to help you retain the students you've worked so hard to enroll. But for an already overworked staff, debt letter legislation can feel like just one more area requiring compliance. Our free downloadable resources can help you find your way!
