# Presentation: 409766

## Electronic Signatures in the SFA Loan Programs

**Electronic P-Notes**

- Presented by
- Jeff Baker
- &
- Kay Jacks

## Electronic Signatures

## What Are the Laws That Affect e-Transactions?

- Government Paperwork Elimination Act (**GPEA**)
- &
- Electronic Signatures in Global and National Commerce Act
- (**E-SIGN**)

## GPEA

- To promote e-commerce by the Federal Government
- Electronic records have legal effect, validity, and enforceability
- Agencies to allow electronic transactions and maintenance of electronic records, when practicable

## E-Sign Legislation

- To promote e-commerce in the private sector
- Legal equivalence between paper and electronic documents for binding transactions
- Applies to private sector transactions regulated by Federal and State Government to specify standards to ensure accuracy, integrity, and accessibility of records
- Requires consent and protection of consumer [student] in electronic context

## E-Sign

- A contract **does not** lose enforceability solely because it was signed electronically

## Implications and Standards

**Other Implications:**
- FFEL Program P-Note
- Lender Choice
- Standards
- PIN Options
- Perkins Program P-Note
- School Choice
- Standards
- PIN Options
- Note

## Implications and Standards

**Other Implications:**
- All Three Loan Programs
- Disclosures
- Due Diligence
- Bill Presentment and Payment
- Others
- Other Title IV Transactions
- Application
- Verification
- Authorizations
- Others

## What Have We Done?What Needs to be Done?

- Discussions with financial aid community
- Electronic Access Conferences
- Direct Loan FAA Focus Groups
- FFEL Community
- Advanced Notice of Proposed Rulemaking
- Notice of Proposed Rulemaking on Record Retention – Cancelled
- Development of Standards on Electronic Signatures for Title IV Loans
- Released on April 30
- See IFAP or SFA-CIO Site

## Standards on Electronic Signatures for Title IV Loans

- Developed in Cooperation with FFEL Lenders/GA’s and Schools
- Provides “Safe Harbor” for FFEL and Perkins Lenders
- ED’s Standards for Direct Loans

## Summary of Standards:

Definitions 
Borrower Consent 
Disclosures
Knowledge-Based Authentication  (PIN)
Intent to Sign an Electronic Record
Required Display of Terms and Conditions

- Definitions
- Borrower Consent
- Disclosures
- Knowledge-Based Authentication  (PIN)
- Intent to Sign an Electronic Record
- Required Display of Terms and Conditions

**Standards on Electronic Signatures for Title IV Loans**

## Standards on Electronic Signatures for Title IV Loans

- 4.1: Printing and Viewing Electronically-Signed Records
- 4.2: Self-Contained Records
**Section 5: Integrity of Electronic Records**
- 5.1: Authoritative Copies
- 5.2: Associating Electronic Records
- 5.3: Tracking Changes and Updates to Electronic Records
**Section 6: Managing and Maintaining Electronic Records**
- 6.1: Hybrid Transactions
**Section 7: Accessing Electronic Records**
- 7.1: Access Rights and Restrictions
- 7.2: Providing Access
- 7.3: Timeframe for Providing Access
**Section 8: Holder Certifications**
- PIN

**Standards on Electronic Signatures for Title IV Loans**

## Standards on Electronic Signatures for Title IV Loans

**Continued-**
**Summary of Standards:**
- Format of Electronic Records
- Printing/Viewing Electronic Records
- Integrity of Electronic Records
- Managing and Maintaining Electronic Records
- Accessing Electronic Records
- Holder Certifications

## E-MPN Enforceability

**Database**
**Matches**

**FAFSA**

**Digital**
**Document**

**  **
**Origination/ **
**Certification**

**School **
**Data**

## Creating An Enforceable eMPN

**+**

- ** Events below are date/time stamped and stored by the lender.
- 1  Student enters an eNote website and  reads notices.
- Student clicks statement that s/he has read consumer consent disclosure & agrees to an eNote process.
- Student enters identification credential (PIN).
- An authentication authority verifies identity.
- 5   Student clicks acknowledgement of certifications, authorizations, disclosures, and rights.
- 6  Student adds/modifies information on the eNote (references, driver’s license number, e-mail address, etc.)
- 7   Student reviews completed eNote and clicks agreement.
- 8   Student signs eNote.
- 9   Student prints or saves eNote.

**Digital Document**

**Lender**

**Originate a Student Loan **

**School**

**Borrower**

- School sends student notification of loan amount, type and right to cancel to student
- Student accepts loan according to school procedures
- School verifies student enrollment
- School confirms eligibility criteria
- Lender disburses loan to school to distribute to student
- School credits student’s account and forwards balance to student
- School maintains records on enrollment, grades, charges, etc.

**School/Student Affirmation & Disbursement**

**Disburse a Student Loan**

**+**

- Student completes a FAFSA.
- Student is instructed on how to obtain an identification credential (PIN).
- Student data is verified by an authentication authority.
- An identification credential (PIN) is issued to the student.
- SFA sends notice to the school (ISIR) and the student (SAR)
- School resolves any exceptions to data matches.
- The school determines student to be eligible and certifies/originates the loan (type, amount, date of disbursement, etc.)

**Creating An Enforceable eMPN**

## How To Obtain SFA PIN

- Sent to Every Paper FAFSA Filer
- Can Be Requested at Time of Electronic FAFSA on the WEB or Renewal FAFSA on the WEB filing
- Pre-Application Request
- ED PIN Registration Web Site
- Parent or Student (High School Seniors)

## Use of SFA PIN

- Sign FAFSA on the Web or Renewal FAFSA on the Web
- Sign Corrections on the Web
- Sign Title IV Loan e-P Note
- Access NSLDS
- Access Direct Loan Servicing

## Student AuthenticationService (STAN)

**Student Authentication****Service (STAN)**

- Allows borrowers to sign e-Promissory
- 	Notes electronically using SFA PIN
**Eliminates need for borrower to print**
**	****out signature page and mail it in**
- Can be integrated seamlessly into any
- 	electronic student loan website
- Contact _[stan@ncs.com](mailto:stan@ncs.com)__ to start a service agreement, or get more information _
-    about STAN

## STAN Authentication 

- Lenders

- Perkins
- Schools

- SFA PIN
-  Database

**STAN Authentication **
**Services Model****  **

- DLO/
- DLC

**    ****SFA**

-  SFA PIN
- Site

- DLO

- DLS

-  NSLDS

- DigDoc

-  FAFSA

- DigDoc

- DigDoc

## STAN SCREENSHOT

## The Process

**The Process**

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## 141111111

**141111111**

**BO**

**10/11/1972**

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## Questions