With the signing of the Transportation Equity Act for the 21st Century, the Fiscal Year 98-99 interest rates have been established for Federal Family Education Loan Program loans made during the three month period of July 1, 1998 through September 30, 1998 (see UHEAA Bulletin Vol. 98 - Issue 51).  Due to the new method used in calculating these interest rates, the U.S. Department of Education has mandated that guaranty agencies modify their Notice of Loan Guarantee and Disclosure Statement to fully disclose to borrowers the method used to calculate these interest rates.  UHEAA has implemented a number of changes in order to provide borrowers with as clear and understandable a disclosure as possible.  The following is a list of changes:

• On UHEAA’s Notice of Loan Guarantee and Disclosure Statement, the AInterest Rate@ box will contain an asterisk.  Immediately under this box will appear an asterisk with instructions to see the attached Addendum (e.g. *See Addendum).

• UHEAA has prepared an Addendum (please see attached) which explains to borrowers, in the most straightforward way possible, the method used to calculate their interest rate and also highlights their actual current interest rate.

• UHEAA will provide this Addendum with the promissory note and accompanying disclosure statement to lenders in order that it may be sent to all borrowers whose loans will be first disbursed during this three-month time period.  In some cases, lenders may have already sent a disclosure statement to such a borrower that did not contain this information.  In such cases, UHEAA will re-disclose to that borrower using a new Notice of Loan Guarantee and Disclosure Statement and Addendum.

 Although the regulations do not require lenders to use any particular Addendum, UHEAA encourages lenders to utilize this Addendum in an effort to maintain uniform communications with borrowers whose loans are guaranteed by UHEAA.  Additionally, all lenders are reminded that they are responsible for ensuring proper disclosure to all borrowers.

 Any questions regarding our procedures or this Addendum may be directed to the Policy and Training Department at (801) 321-7166.

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