Validation and Security of MGSLP's Online Products
Federal regulators have set new standards in order to allow loan origination and disbursements to be more efficient. One of the additions includes the acceptance of electronic signatures. Below is a definition and validation of e-signatures.
Definition of an e-signature
"Electronic Signature" means an electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record. 15 U.S.C. 7006(5).
Electronic Signature Validations
Safety Features
The Student Authentication Network (STAN) was developed to make student loan information exchanged over the internet safe and secure for all the parties involved. Borrowers are issued a Personal Identification Number (PIN) and asked to enter stable data (name, date of birth, SSN). This information is compared to the Department of Education''s database to assure authenticity. If the information matches up correctly, the borrower can e-sign a Title IV loan promissory note. STAN meets all the Department of Education''s requirements for Safe Harbor provisions.
Definition of an e-signature
"Electronic Signature" means an electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record. 15 U.S.C. 7006(5).
Electronic Signature Validations
- Federal Law (Electronic Signatures in Global and National Commerce Act) enables and validates nationwide the use and enforceability of electronic signatures, as well as the use of contracts and other records created and maintained in an electronic form. 15 U.S.C 7001(2001). Passed by Congress June 30, 2000 with an effective date of July 1, 2001.
- On April 30, 2001, the Department of Education developed the Standards for electronic signatures in electronic student loan transactions.
- In May of 2001, the Department of Education announced that electronic promissory notes and signatures would be allowed in federal student loan programs. Electronic Signatures in Global and National Commerce Act: "with respect to any transactions in or affecting interstate or foreign commerce--(1)a signature, contract, or other record relating to such a transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and (2) a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation,"15 U.S.C 7001(a)
Safety Features
The Student Authentication Network (STAN) was developed to make student loan information exchanged over the internet safe and secure for all the parties involved. Borrowers are issued a Personal Identification Number (PIN) and asked to enter stable data (name, date of birth, SSN). This information is compared to the Department of Education''s database to assure authenticity. If the information matches up correctly, the borrower can e-sign a Title IV loan promissory note. STAN meets all the Department of Education''s requirements for Safe Harbor provisions.
