{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-2611.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-2611.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-2611.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-2611.html"}],"law_id":77018,"edition_id":1,"section_id":77018,"structure_id":12857,"section_number":"6.2-2611","catch_line":"Affirmative acts required of qualified education loan servicers","history":"2020, cc. 1198, 1250.","full_text":"Except to the extent that this section is inconsistent with any provision of federal law or regulation, and then only to the extent of the inconsistency, a person engaged in qualified education loan servicing shall:\n\n1\n\nEvaluate a qualified education loan borrower for eligibility for an income-driven repayment program prior to placing the borrower in forbearance or default, if an income-driven repayment program is available to the borrower;2\n\nRespond to a written inquiry from a qualified education loan borrower or the representative of a qualified education loan borrower within 10 business days after receipt of the request and, within 30 business days after receipt of the request, provide information relating to the request and, if applicable, to the action the qualified education loan servicer will take to correct the account or an explanation for the qualified education loan servicer’s position that the borrower’s account is correct. Such 30-day period may be extended for not more than 15 days if, before the end of the 30-day period, the qualified education loan servicer notifies the borrower, or the borrower’s representative, as applicable, of the extension and the reasons for the delay in responding;3\n\nNot furnish to a consumer reporting agency, during 60 days following receipt of a written request related to a dispute on a borrower’s payment on a qualified education loan, information regarding a payment that is the subject of the written request;4\n\nExcept as provided in federal law or required by a qualified education loan agreement, inquire of a borrower how to apply an overpayment to a qualified education loan. A borrower’s direction on how to apply an overpayment to a qualified education loan shall remain in effect for any future overpayments during the term of a qualified education loan or until the borrower provides different directions. As used in this subdivision, “overpayment” means a payment on a qualified education loan that exceeds the monthly amount due from a borrower on the qualified education loan, which payment may be referred to as a prepayment;5\n\nApply partial payments in a manner that minimizes late fees and negative credit reporting. If loans on a borrower’s qualified education loan account have an equal level of delinquency, a qualified education loan servicer shall apply partial payments to satisfy as many individual loan payments as possible on a borrower’s account. As used in this subdivision, “partial payment” means a payment on a qualified education loan account that contains multiple individual loans in an amount less than the amount necessary to satisfy the outstanding payment due on all loans in the qualified education loan account, which payment may be referred to as an underpayment;6\n\nRequire, as a condition of a sale, an assignment, or any other transfer of the servicing of a qualified education loan, that the new loan servicer honor all benefits originally represented as available to a qualified education loan borrower during the repayment of the qualified education loan and preserve the availability of the benefits, including any benefits for which the qualified education loan borrower has not yet qualified. If a qualified education loan servicer is not also the loan holder or is not acting on behalf of the loan holder, the loan servicer satisfies the requirement of this subsection by providing the new loan servicer with information necessary for the new loan servicer to honor all benefits originally represented as available to a qualified education loan borrower during the repayment of the qualified education loan and preserve the availability of the benefits, including any benefits for which the loan borrower has not yet qualified; and7\n\nIn the event of a sale, assignment, or other transfer of the servicing of a qualified education loan that results in a change in the identity of the person to whom a qualified education loan borrower is required to send payments or direct any communication concerning the qualified education loan:\n\t\t\ta. Transfer to the new loan servicer all records regarding the qualified education loan borrower, the account of the loan borrower, and the qualified education loan of the loan borrower. Such records include the repayment status of the qualified education loan borrower and any benefits associated with the qualified education loan of the loan borrower. The transfer of records shall be completed within 45 days after the sale, assignment, or other transfer of the servicing of a qualified education loan;\n\t\t\tb. Notify affected qualified education loan borrowers of the sale, assignment, or other transfer of the servicing of a qualified education loan at least seven days before the next payment on the loan is due. The notice shall include (i) the identity of the new qualified education loan servicer; (ii) the effective date of the transfer of the borrower’s qualified education loan to the new loan servicer; (iii) the date on which the existing loan servicer will no longer accept payments; and (iv) the contact information for the new loan servicer; and\n\t\t\tc. Adopt policies and procedures to verify that the new qualified education loan servicer has received all records regarding the qualified education loan borrower, the account of the qualified education loan borrower, and the qualified education loan of the borrower, including the repayment status of the qualified education loan borrower and any benefits associated with the qualified education loan of the borrower.","order_by":null,"text":{"0":{"id":276386,"text":"Except to the extent that this section is inconsistent with any provision of federal law or regulation, and then only to the extent of the inconsistency, a person engaged in qualified education loan servicing shall:","type":"section","prefixes":[""],"prefix":"","entire_prefix":"","prefix_anchor":"","level":1,"next_prefix":"1"},"1":{"id":276387,"text":"Evaluate a qualified education loan borrower for eligibility for an income-driven repayment program prior to placing the borrower in forbearance or default, if an income-driven repayment program is available to the borrower;","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"","next_prefix":"2"},"2":{"id":276388,"text":"Respond to a written inquiry from a qualified education loan borrower or the representative of a qualified education loan borrower within 10 business days after receipt of the request and, within 30 business days after receipt of the request, provide information relating to the request and, if applicable, to the action the qualified education loan servicer will take to correct the account or an explanation for the qualified education loan servicer’s position that the borrower’s account is correct. Such 30-day period may be extended for not more than 15 days if, before the end of the 30-day period, the qualified education loan servicer notifies the borrower, or the borrower’s representative, as applicable, of the extension and the reasons for the delay in responding;","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"3":{"id":276389,"text":"Not furnish to a consumer reporting agency, during 60 days following receipt of a written request related to a dispute on a borrower’s payment on a qualified education loan, information regarding a payment that is the subject of the written request;","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"4":{"id":276390,"text":"Except as provided in federal law or required by a qualified education loan agreement, inquire of a borrower how to apply an overpayment to a qualified education loan. A borrower’s direction on how to apply an overpayment to a qualified education loan shall remain in effect for any future overpayments during the term of a qualified education loan or until the borrower provides different directions. As used in this subdivision, “overpayment” means a payment on a qualified education loan that exceeds the monthly amount due from a borrower on the qualified education loan, which payment may be referred to as a prepayment;","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"5":{"id":276391,"text":"Apply partial payments in a manner that minimizes late fees and negative credit reporting. If loans on a borrower’s qualified education loan account have an equal level of delinquency, a qualified education loan servicer shall apply partial payments to satisfy as many individual loan payments as possible on a borrower’s account. As used in this subdivision, “partial payment” means a payment on a qualified education loan account that contains multiple individual loans in an amount less than the amount necessary to satisfy the outstanding payment due on all loans in the qualified education loan account, which payment may be referred to as an underpayment;","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"6"},"6":{"id":276392,"text":"Require, as a condition of a sale, an assignment, or any other transfer of the servicing of a qualified education loan, that the new loan servicer honor all benefits originally represented as available to a qualified education loan borrower during the repayment of the qualified education loan and preserve the availability of the benefits, including any benefits for which the qualified education loan borrower has not yet qualified. If a qualified education loan servicer is not also the loan holder or is not acting on behalf of the loan holder, the loan servicer satisfies the requirement of this subsection by providing the new loan servicer with information necessary for the new loan servicer to honor all benefits originally represented as available to a qualified education loan borrower during the repayment of the qualified education loan and preserve the availability of the benefits, including any benefits for which the loan borrower has not yet qualified; and","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5","next_prefix":"7"},"7":{"id":276393,"text":"In the event of a sale, assignment, or other transfer of the servicing of a qualified education loan that results in a change in the identity of the person to whom a qualified education loan borrower is required to send payments or direct any communication concerning the qualified education loan:\n\t\t\ta. Transfer to the new loan servicer all records regarding the qualified education loan borrower, the account of the loan borrower, and the qualified education loan of the loan borrower. Such records include the repayment status of the qualified education loan borrower and any benefits associated with the qualified education loan of the loan borrower. The transfer of records shall be completed within 45 days after the sale, assignment, or other transfer of the servicing of a qualified education loan;\n\t\t\tb. Notify affected qualified education loan borrowers of the sale, assignment, or other transfer of the servicing of a qualified education loan at least seven days before the next payment on the loan is due. The notice shall include (i) the identity of the new qualified education loan servicer; (ii) the effective date of the transfer of the borrower’s qualified education loan to the new loan servicer; (iii) the date on which the existing loan servicer will no longer accept payments; and (iv) the contact information for the new loan servicer; and\n\t\t\tc. Adopt policies and procedures to verify that the new qualified education loan servicer has received all records regarding the qualified education loan borrower, the account of the qualified education loan borrower, and the qualified education loan of the borrower, including the repayment status of the qualified education loan borrower and any benefits associated with the qualified education loan of the borrower.","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6"}},"ancestry":[{"id":12857,"edition_id":1,"name":"Qualified Education Loan Servicers","identifier":"26","label":"chapter","depth":3,"order_by":1,"parent_id":12856,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":267179,"object_type":"structure","relational_id":12857,"identifier":"26","token":"6.2\/IV\/26","url":"\/6.2\/IV\/26\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12856,"edition_id":1,"name":"Other Financial Activities","identifier":"IV","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":267075,"object_type":"structure","relational_id":12856,"identifier":"IV","token":"6.2\/IV","url":"\/6.2\/IV\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":79869,"structure_id":12857,"section_number":"6.2-2600","catch_line":"Definitions","url":"\/6.2-2600\/","token":"6.2\/IV\/26\/6.2-2600","metadata":false},{"id":56387,"structure_id":12857,"section_number":"6.2-2601","catch_line":"License requirement; exceptions","url":"\/6.2-2601\/","token":"6.2\/IV\/26\/6.2-2601","metadata":false},{"id":62840,"structure_id":12857,"section_number":"6.2-2602","catch_line":"Licensure of qualified education loan servicers; automatic issuance of license for federal student loan servicing contractors","url":"\/6.2-2602\/","token":"6.2\/IV\/26\/6.2-2602","metadata":false},{"id":56136,"structure_id":12857,"section_number":"6.2-2603","catch_line":"Application for license; form; content; fee","url":"\/6.2-2603\/","token":"6.2\/IV\/26\/6.2-2603","metadata":false},{"id":86504,"structure_id":12857,"section_number":"6.2-2604","catch_line":"Bond required","url":"\/6.2-2604\/","token":"6.2\/IV\/26\/6.2-2604","metadata":false},{"id":71805,"structure_id":12857,"section_number":"6.2-2605","catch_line":"Investigation of applications","url":"\/6.2-2605\/","token":"6.2\/IV\/26\/6.2-2605","metadata":false},{"id":77205,"structure_id":12857,"section_number":"6.2-2606","catch_line":"Qualifications","url":"\/6.2-2606\/","token":"6.2\/IV\/26\/6.2-2606","metadata":false},{"id":56065,"structure_id":12857,"section_number":"6.2-2607","catch_line":"Licenses; place of business; changes; renewal","url":"\/6.2-2607\/","token":"6.2\/IV\/26\/6.2-2607","metadata":false},{"id":79671,"structure_id":12857,"section_number":"6.2-2608","catch_line":"Retention of records; responding to the Bureau","url":"\/6.2-2608\/","token":"6.2\/IV\/26\/6.2-2608","metadata":false},{"id":76529,"structure_id":12857,"section_number":"6.2-2609","catch_line":"Acquisition of control; application","url":"\/6.2-2609\/","token":"6.2\/IV\/26\/6.2-2609","metadata":false},{"id":82485,"structure_id":12857,"section_number":"6.2-2610","catch_line":"Prohibited activities; compliance with federal laws and regulations","url":"\/6.2-2610\/","token":"6.2\/IV\/26\/6.2-2610","metadata":false},{"id":77018,"structure_id":12857,"section_number":"6.2-2611","catch_line":"Affirmative acts required of qualified education loan servicers","url":"\/6.2-2611\/","token":"6.2\/IV\/26\/6.2-2611","metadata":false},{"id":65901,"structure_id":12857,"section_number":"6.2-2612","catch_line":"Reporting requirements","url":"\/6.2-2612\/","token":"6.2\/IV\/26\/6.2-2612","metadata":false},{"id":80772,"structure_id":12857,"section_number":"6.2-2613","catch_line":"Investigations; examinations","url":"\/6.2-2613\/","token":"6.2\/IV\/26\/6.2-2613","metadata":false},{"id":61083,"structure_id":12857,"section_number":"6.2-2614","catch_line":"Annual fees","url":"\/6.2-2614\/","token":"6.2\/IV\/26\/6.2-2614","metadata":false},{"id":76191,"structure_id":12857,"section_number":"6.2-2615","catch_line":"Suspension or revocation of license","url":"\/6.2-2615\/","token":"6.2\/IV\/26\/6.2-2615","metadata":false},{"id":81753,"structure_id":12857,"section_number":"6.2-2616","catch_line":"Notice of proposed suspension or revocation","url":"\/6.2-2616\/","token":"6.2\/IV\/26\/6.2-2616","metadata":false},{"id":53994,"structure_id":12857,"section_number":"6.2-2617","catch_line":"Cease and desist orders","url":"\/6.2-2617\/","token":"6.2\/IV\/26\/6.2-2617","metadata":false},{"id":63307,"structure_id":12857,"section_number":"6.2-2618","catch_line":"Civil penalties","url":"\/6.2-2618\/","token":"6.2\/IV\/26\/6.2-2618","metadata":false},{"id":79951,"structure_id":12857,"section_number":"6.2-2619","catch_line":"Private cause of action","url":"\/6.2-2619\/","token":"6.2\/IV\/26\/6.2-2619","metadata":false},{"id":63154,"structure_id":12857,"section_number":"6.2-2620","catch_line":"Investigating and restraining prohibited acts","url":"\/6.2-2620\/","token":"6.2\/IV\/26\/6.2-2620","metadata":false},{"id":60246,"structure_id":12857,"section_number":"6.2-2621","catch_line":"Violation of the Virginia Consumer Protection Act","url":"\/6.2-2621\/","token":"6.2\/IV\/26\/6.2-2621","metadata":false},{"id":69784,"structure_id":12857,"section_number":"6.2-2622","catch_line":"Regulations","url":"\/6.2-2622\/","token":"6.2\/IV\/26\/6.2-2622","metadata":false}],"previous_section":{"id":82485,"structure_id":12857,"section_number":"6.2-2610","catch_line":"Prohibited activities; compliance with federal laws and regulations","url":"\/6.2-2610\/","token":"6.2\/IV\/26\/6.2-2610","metadata":false},"next_section":{"id":65901,"structure_id":12857,"section_number":"6.2-2612","catch_line":"Reporting requirements","url":"\/6.2-2612\/","token":"6.2\/IV\/26\/6.2-2612","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-2611\/","history_text":"

This law was first created in 2020. The record of its establishment is cataloged in chapters 1198<\/a> and 1250<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year.<\/p>","references":false,"refers_to":false,"permalink":{"id":267225,"object_type":"law","relational_id":77018,"identifier":"6.2-2611","token":"6.2\/IV\/26\/6.2-2611","url":"\/6.2-2611\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-2611\/","token":"6.2\/IV\/26\/6.2-2611","dublin_core":{"Title":"Affirmative acts required of qualified education loan servicers","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-2611","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

Except to the extent that this section is inconsistent with any provision of federal law<\/span> or regulation, and then only to the extent of the inconsistency, a person<\/span> engaged in qualified education loan<\/span> servicing shall:<\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Evaluate a qualified education loan<\/span> borrower<\/span> for eligibility for an income-driven repayment program prior to placing the borrower in forbearance or default<\/span>, if an income-driven repayment program is available to the borrower; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Respond to a written inquiry from a qualified education loan<\/span> borrower<\/span> or the representative of a qualified education loan<\/span> borrower<\/span> within 10 business days after receipt of the request and, within 30 business days after receipt of the request, provide information relating to the request and, if applicable, to the action the qualified education loan<\/span> servicer<\/span> will take to correct the account or an explanation for the qualified education loan<\/span> servicer<\/span>’s position that the borrower’s account is correct. Such 30-day period may be extended for not more than 15 days if, before the end of the 30-day period, the qualified education loan<\/span> servicer<\/span> notifies the borrower, or the borrower’s representative, as applicable, of the extension and the reasons for the delay in responding; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Not furnish to a consumer reporting agency, during 60 days following receipt of a written request related to a dispute on a borrower’s payment on a qualified education loan<\/span>, information regarding a payment that is the subject of the written request; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Except as provided in federal law<\/span> or required by a qualified education loan<\/span> agreement, inquire of a borrower how to apply an overpayment<\/span> to a qualified education loan<\/span>. A borrower’s direction on how to apply an overpayment<\/span> to a qualified education loan<\/span> shall remain in effect for any future overpayments<\/span> during the term of a qualified education loan<\/span> or until the borrower provides different directions. As used in this subdivision, “overpayment<\/span>” means a payment on a qualified education loan<\/span> that exceeds the monthly amount due from a borrower on the qualified education loan<\/span>, which payment may be referred to as a prepayment; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Apply partial payments<\/span> in a manner that minimizes late fees and negative credit reporting. If loans on a borrower’s qualified education loan<\/span> account have an equal level of delinquency, a qualified education loan<\/span> servicer<\/span> shall apply partial payments<\/span> to satisfy as many individual loan payments as possible on a borrower’s account. As used in this subdivision, “partial payment<\/span>” means a payment on a qualified education loan<\/span> account that contains multiple individual loans in an amount less than the amount necessary to satisfy the outstanding payment due on all loans in the qualified education loan<\/span> account, which payment may be referred to as an underpayment; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Require, as a condition of a sale, an assignment, or any other transfer of the servicing of a qualified education loan<\/span>, that the new loan servicer honor all benefits originally represented as available to a qualified education loan<\/span> borrower<\/span> during the repayment of the qualified education loan<\/span> and preserve the availability of the benefits, including any benefits for which the qualified education loan<\/span> borrower<\/span> has not yet qualified. If a qualified education loan<\/span> servicer<\/span> is not also the loan holder or is not acting on behalf of the loan holder, the loan servicer satisfies the requirement of this subsection by providing the new loan servicer with information necessary for the new loan servicer to honor all benefits originally represented as available to a qualified education loan<\/span> borrower<\/span> during the repayment of the qualified education loan<\/span> and preserve the availability of the benefits, including any benefits for which the loan borrower has not yet qualified; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> In the event of a sale, assignment, or other transfer of the servicing of a qualified education loan<\/span> that results in a change in the identity of the person<\/span> to whom a qualified education loan<\/span> borrower<\/span> is required to send payments or direct any communication concerning the qualified education loan<\/span>:\n\t\t\ta. Transfer to the new loan servicer all records regarding the qualified education loan<\/span> borrower<\/span>, the account of the loan borrower, and the qualified education loan<\/span> of the loan borrower. Such records include the repayment status of the qualified education loan<\/span> borrower<\/span> and any benefits associated with the qualified education loan<\/span> of the loan borrower. The transfer of records shall be completed within 45 days after the sale, assignment, or other transfer of the servicing of a qualified education loan<\/span>;\n\t\t\tb. Notify affected qualified education loan<\/span> borrowers<\/span> of the sale, assignment, or other transfer of the servicing of a qualified education loan<\/span> at least seven days before the next payment on the loan is due. The notice shall include (i) the identity of the new qualified education loan<\/span> servicer<\/span>; (ii) the effective date of the transfer of the borrower’s qualified education loan<\/span> to the new loan servicer; (iii) the date on which the existing loan servicer will no longer accept payments; and (iv) the contact information for the new loan servicer; and\n\t\t\tc. Adopt policies and procedures to verify that the new qualified education loan<\/span> servicer<\/span> has received all records regarding the qualified education loan<\/span> borrower<\/span>, the account of the qualified education loan<\/span> borrower<\/span>, and the qualified education loan<\/span> of the borrower, including the repayment status of the qualified education loan<\/span> borrower<\/span> and any benefits associated with the qualified education loan<\/span> of the borrower. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nAFFIRMATIVE ACTS REQUIRED OF QUALIFIED EDUCATION LOAN SERVICERS (\u00a7 6.2-2611)\n\nExcept to the extent that this section is inconsistent with any provision of\nfederal law or regulation, and then only to the extent of the inconsistency, a\nperson engaged in qualified education loan servicing shall:\n\n1. Evaluate a qualified education loan borrower for eligibility for an\nincome-driven repayment program prior to placing the borrower in forbearance or\ndefault, if an income-driven repayment program is available to the borrower;\n\n2. Respond to a written inquiry from a qualified education loan borrower or the\nrepresentative of a qualified education loan borrower within 10 business days\nafter receipt of the request and, within 30 business days after receipt of the\nrequest, provide information relating to the request and, if applicable, to the\naction the qualified education loan servicer will take to correct the account or\nan explanation for the qualified education loan servicer’s position that\nthe borrower’s account is correct. Such 30-day period may be extended for\nnot more than 15 days if, before the end of the 30-day period, the qualified\neducation loan servicer notifies the borrower, or the borrower’s\nrepresentative, as applicable, of the extension and the reasons for the delay in\nresponding;\n\n3. Not furnish to a consumer reporting agency, during 60 days following receipt\nof a written request related to a dispute on a borrower’s payment on a\nqualified education loan, information regarding a payment that is the subject of\nthe written request;\n\n4. Except as provided in federal law or required by a qualified education loan\nagreement, inquire of a borrower how to apply an overpayment to a qualified\neducation loan. A borrower’s direction on how to apply an overpayment to a\nqualified education loan shall remain in effect for any future overpayments\nduring the term of a qualified education loan or until the borrower provides\ndifferent directions. As used in this subdivision, “overpayment”\nmeans a payment on a qualified education loan that exceeds the monthly amount\ndue from a borrower on the qualified education loan, which payment may be\nreferred to as a prepayment;\n\n5. Apply partial payments in a manner that minimizes late fees and negative\ncredit reporting. If loans on a borrower’s qualified education loan\naccount have an equal level of delinquency, a qualified education loan servicer\nshall apply partial payments to satisfy as many individual loan payments as\npossible on a borrower’s account. As used in this subdivision,\n“partial payment” means a payment on a qualified education loan\naccount that contains multiple individual loans in an amount less than the\namount necessary to satisfy the outstanding payment due on all loans in the\nqualified education loan account, which payment may be referred to as an\nunderpayment;\n\n6. Require, as a condition of a sale, an assignment, or any other transfer of\nthe servicing of a qualified education loan, that the new loan servicer honor\nall benefits originally represented as available to a qualified education loan\nborrower during the repayment of the qualified education loan and preserve the\navailability of the benefits, including any benefits for which the qualified\neducation loan borrower has not yet qualified. If a qualified education loan\nservicer is not also the loan holder or is not acting on behalf of the loan\nholder, the loan servicer satisfies the requirement of this subsection by\nproviding the new loan servicer with information necessary for the new loan\nservicer to honor all benefits originally represented as available to a\nqualified education loan borrower during the repayment of the qualified\neducation loan and preserve the availability of the benefits, including any\nbenefits for which the loan borrower has not yet qualified; and\n\n7. In the event of a sale, assignment, or other transfer of the servicing of a\nqualified education loan that results in a change in the identity of the person\nto whom a qualified education loan borrower is required to send payments or\ndirect any communication concerning the qualified education loan:\n\t\t\ta. Transfer to the new loan servicer all records regarding the qualified\neducation loan borrower, the account of the loan borrower, and the qualified\neducation loan of the loan borrower. Such records include the repayment status\nof the qualified education loan borrower and any benefits associated with the\nqualified education loan of the loan borrower. The transfer of records shall be\ncompleted within 45 days after the sale, assignment, or other transfer of the\nservicing of a qualified education loan;\n\t\t\tb. Notify affected qualified education loan borrowers of the sale,\nassignment, or other transfer of the servicing of a qualified education loan at\nleast seven days before the next payment on the loan is due. The notice shall\ninclude (i) the identity of the new qualified education loan servicer; (ii) the\neffective date of the transfer of the borrower’s qualified education loan\nto the new loan servicer; (iii) the date on which the existing loan servicer\nwill no longer accept payments; and (iv) the contact information for the new\nloan servicer; and\n\t\t\tc. Adopt policies and procedures to verify that the new qualified education\nloan servicer has received all records regarding the qualified education loan\nborrower, the account of the qualified education loan borrower, and the\nqualified education loan of the borrower, including the repayment status of the\nqualified education loan borrower and any benefits associated with the qualified\neducation loan of the borrower.\n\nHISTORY: 2020, cc. 1198, 1250.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}