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Private Education Lenders and Student Loan Servicers Bond

What is a Nevada Private Education Lenders and Student Loan Servicers Bond?

Any person or entity responsible for the servicing of any student education loan to any student loan borrower may be considered a Student Loan Servicer by the state of Nevada.  Section 15 of the state code requires Student Loan Servicers to obtain a license before engaging in student loan servicing. Furthermore, a surety bond in an amount to be determined by the Commissioner is required in conjunction with the license. Non-education related loan servicers in the state mat also be subject to surety bond requirements.

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Why is a Nevada Loan Lender or Servicer Bond Required?

The surety bonds helps ensure a Private Education Lender or Servicer adheres to the specified standards, including:

  • Complying with notice and cosigner release requirements as they relate to borrowers and cosigners;
  • Refraining from including provisions in loans made  which allow the private education lender to accelerate payments (except in cases of a loan default)
  • Refraining from accelerating payments on loans made unless the loan explicitly authorizes an acceleration and only for the reasons stated in the relevant note or agreement;
  • Refraining from placing any private education loan or account into default or accelerating a private education loan while a private education loan borrower is seeking a loan modification or enrollment in a flexible repayment plan until 90 days following the private education loan borrower’s default;
  • Releasing and refraining from collecting from any cosigner of a private education loan if notified of the total and permanent disability of a private education loan borrower or cosigner;
  • Complying with disclosures and procedural requirements regarding refinancing and flexible repayment of private education loans;
  • Refraining from engaging in any unfair, deceptive, or abuses acts or practices and making false, misleading, or deceptive statements;
  • Refraining from making a private education loan secured by wages or other compensation for services earned or to be earned; and
  • Complying with all relevant recordkeeping requirements.

Loan Lender or Servicer Bonds And Getting Your Nevada Business License/Registration

Potential private education loan lender and servicer licensees must submit an application containing the following:

  • A financial statement prepared by a certified public accountant;
  • A non-refundable licensing fee;
  • A non-refundable investigation fee;
  • Any other information requested by the Commissioner;
  • A surety bond in an amount to be determined by the Commissioner;
  • The social security numbers of the applicant if the applicant is a natural persons or of each control person if the applicant is not a natural person; and
  • The statement prescribed by the Division of Welfare and Supportive Services of the Departments of Health Human Services pursuant to Nev. Rev. Stat. § 425.520.