Private Education Lenders and Student Loan Servicers Bond
Nevada Private Education Lenders and Student Loan Servicers Bond Information
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.
What Does a Loan Lender or Servicer Bond Protect Against?
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.
Getting Your Nevada Business License or 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.