Record Keeping & Retention

Lenders are required to keep current, complete, and accurate records for each FFELP loan it holds for a specified period of time.  As indicated in the Common Manual, the required records a lender must keep include the following:

• Documentation of any Master Promissory Note (MPN) confirmation processes.
• A copy of the application, if a separate application was provided to the lender
• A copy of the signed promissory note.  The original or true and exact copy of the promissory note must be retained until the loan is paid in full or assigned to the U.S. Department of Education.
• The guarantee disclosure for each loan, with a record of any changes to the disclosure.
• Evidence of disbursement.
• Documentation of the lender’s handling of any refunds issued by the student’s school.
• Documentation supporting any SSN changes.
• Documentation of the date on which the student was no longer enrolled at least half time and the schools the student attended.
• Notice of address changes for the borrower or references.
• Documentation of all repayment terms established with the borrower, including repayment start date, amount of the loan and the number of installments to repay the loan.
• A record of all payments received, including the dates, amounts, and way in which each payment was applied to the principal, interest, and other outstanding balances on the loan.
• Evidence of any deferment eligibility, including the beginning and ending dates for each deferment.
• Documentation of any forbearance granted, including the beginning and ending dates for each forbearance granted.
• Documentation of due diligence efforts.
• A record of each communication on the loan—other than regular reports by the lender showing that an account is current—between the lender and a credit bureau.
• Documentation of any assignments, sales, or purchases on the loan—including evidence that a notice of loan assignment was sent to the borrower, if applicable.
• Audit trails sufficient to support the lender’s payment of origination fees and billings of interest benefits and special allowance to the U.S. Department of Education.

These records must be retained for a period of not less than:

• 3 years after the date the loan is paid in full by the borrower.
• 5 years after the date the lender receives payment in full by any other source.

If a loan is sold, the selling lender is subject to the 5-year minimum retention requirements for all documentation generated through the date it sells the loan.  If a loan is purchased, the purchasing lender is subject to the 5-year minimum retention for all documentation generated from the time of the loan’s origination through the date the purchasing lender no longer holds the loan.

When a loan is paid in full by the borrower, the lender must either return the original or a true and exact copy of the promissory note to the borrower, or notify the borrower that the loan is paid in full.