California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 15 - Student Loan Servicing Act › Article 1 - Definitions › Section 2032 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The
				  following terms used in these rules shall have the following meanings:
(1) "Act" or "SLSA" means the Student Loan
				  Servicing Act, Financial Code, Division 12.5, section
				  28100, et seq.
(2) "Annual percentage rate" or "APR" means
				  the percentage rate calculated according to the Federal Reserve Board's
				  methodology as set forth in Regulation Z, 12 C.F.R. Part 1026.
(3) "Borrower," as defined in Financial Code
				  section
				  28104,
				  subdivision (b) and Civil Code section
				  1788.100,
				  subdivision (a), includes a person who has received or agreed to pay any
				  student loan, including an income share agreement or installment
				  contract.
(4) "Education financing
				  products" means all private student loans which are not traditional student
				  loans.
(5) "Federal Direct Loan(s)"
				  means loan(s) made under the William D. Ford Federal Direct Loan Program,
				  authorized under Title IV of the Higher Education Act, as amended,
				  20 U.S.C. §
												1070, et seq.
(6) "Federal Family Education Loan(s)" means
				  loan(s) made under the Federal Family Education Loan ("FFEL") Program,
				  authorized under Title IV of the Higher Education Act, as amended,
				  20 U.S.C. §
												1070, et seq.
(7) "Federal student loan(s)" means a loan
				  made, insured or guaranteed under Title IV of the Higher Education Act, as
				  amended, 20 U.S.C. §
												1070, et seq.
(8) "Forbearance" means a period during which
				  monthly federal student loan payments are temporarily suspended or reduced, due
				  to certain types of financial hardships. During forbearance, principal payments
				  are postponed but interest continues to accrue. Unpaid interest that accrues
				  during forbearance may be added to the principal balance (capitalized) of the
				  loan(s), increasing the total amount owed by the borrower(s).
(9) "Form MU1" means the uniform licensing
				  form developed by the Nationwide Multistate Licensing System & Registry for
				  a student loan servicer, entitled "NMLS Company Form," Version 11.0, dated
				  09/12/2015, incorporated herein by reference.
(10) "Form MU2" means the uniform licensing
				  form developed by the Nationwide Multistate Licensing System & Registry for
				  a person that directly or indirectly exercises control over a student loan
				  servicer, or a branch thereof, including qualifying individuals and branch
				  managers specified in Form MU1, entitled "NMLS Individual Form," Version 9,
				  dated 9/12/16, incorporated herein by reference.
(11) "Form MU3" means the uniform licensing
				  form developed by the Nationwide Multistate Licensing System & Registry for
				  the branch office of a student loan servicer, entitled "NMLS Branch Office
				  Form," Version 10, dated 3/31/14, incorporated herein by reference.
(12) "Income" means a borrower's compensation
				  from all sources, including but not limited to salary, wages, bonuses,
				  commissions, vacation pay, gratuities, and self-employed earnings, but excludes
				  passive income such as interest, dividends or rental income.
(13) "Income share agreement" or "ISA" means
				  an agreement between a student and a school or an income share provider under
				  which the student agrees to pay a percentage or amount of the student's future
				  income for the payment term, in exchange for the school or income share
				  provider advancing, covering, crediting, deferring, or funding the cost of some
				  or all of the student's postsecondary education and costs of attendance at a
				  postsecondary institution, including but not limited to tuition, fees, books
				  and supplies, room and board, transportation, and miscellaneous personal
				  expenses.
(14) "Income share" means
				  the percentage or amount of a borrower's income payable during the term of the
				  income share agreement.
(15)
				  "Installment contract" means a private student loan from a postsecondary
				  institution to a student in which the student agrees to repay the amount
				  advanced, covered, credited, deferred, or funded in a fixed number of payments
				  of a fixed amount, including an education installment contract and a retail
				  installment contract.
(16) "Maximum
				  payments" means the maximum number of payments a borrower is required to make
				  under an income share agreement, if the borrower's income meets or exceeds the
				  minimum income threshold.
(17)
				  "Minimum income threshold," "minimum threshold," "payment floor" or "floor"
				  means the amount of income specified in an income share agreement below which a
				  borrower is not required to make payments.
(18) "NMLS" means the Nationwide Multistate
				  Licensing System & Registry.
(19) "Payment cap," "payment ceiling,"
				  "ceiling" or "cap" means the maximum amount payable under an income share
				  agreement, which may be expressed as an APR or an amount or a multiple of the
				  amount advanced, covered, credited, deferred, or funded, excluding charges
				  related to default.
(20) "Payment
				  term" means the payment window or maximum period of repayment obligations under
				  an income share agreement or other written agreement evidencing an education
				  financing product.
(21) "Perkins
				  Loan(s)" means Federal Perkins Loans, authorized under Title IV of the Higher
				  Education Act, as amended, 20 U.S.C., §
												1070, et
				  seq.
(22) "Private Student Loan"
				  means a private education loan, as defined in the Truth in Lending Act, at
				  15 U.S.C.
				  1650(a)(8).
(23) "Qualifying payment" means, with respect
				  to income share agreements, a monthly payment that counts toward the maximum
				  payments or the payment cap.
(24)
				  "Startup" means a company in its first twelve months of operations.
(25) "Student Aid Office" or "Federal Student
				  Aid Office" means that certain office of the U.S. Department of Education,
				  which is the largest provider of student financial aid nationwide and is
				  responsible for managing the student financial assistance programs authorized
				  under Title IV of the Higher Education Act of 1965, as amended,
				  20 U.S.C., §
												1070, et seq.
(26) "Student loan servicer," as defined in
				  Financial Code section
				  28104,
				  subdivision (m), includes any person engaged in the business of servicing
				  education financing products, such as program managers.
(27) "Student Loans: Borrower Rights law"
				  means Civil Code, Division 3, Part 4, Title 1.6C.10, sections
				  1788.100, et seq.
(28) "Traditional student loan" means:
(A) federal student loans; or
(B) private student loans which use
				  promissory notes and loan agreements to evidence the loan and provide for the
				  repayment of a principal balance with a fixed or variable interest
				  rate.