How Electronic Signature affects you
Here are some frequently asked questions about electronic signature, a tool for electronic student loan processing. Contact your financial aid office for details on your school's participation.
- What is an electronic signature?
- What types of student loan documents can be signed electronically?
- How can electronic signatures be used to sign contracts and other documents?
- How does this affect my student loan?
- What are the benefits of electronic signature?
- How much faster will I receive my loan funds?
- Does my school or lender have to participate?
- Will all schools offer electronic signatures?
- If my lender offers electronic signature and my school participates in e-signature, will I be required to use electronic signature?
- Can I still get a copy of the promissory note?
- Is e-signature on a student loan document a confidential transaction?
What is an electronic signature?
An electronic signature is an electronic symbol or process that replaces the ink or "wet" signature on a document or promissory note.
What types of student loan documents can be signed electronically?
- A promissory note or loan application
- A forbearance agreement
- A request for deferment on a loan
- A new repayment request
- A request and sworn statement to discharge a loan
Why can electronic signatures be used to sign contracts and other documents?
Various laws have been enacted governing and authorizing electronic signature including the following:
- Electronic Signatures in Global and National (E-Sign) Commerce Act, a federal law, effective October 1, 2000, allows electronically signed documents to have the same legal integrity as documents bearing an ink or "wet" signature.
- Uniform Electronic Transactions Act (UETA), developed by the National Conference of Commissioners on Uniform State Laws. Approximately 24 states have adopted this law.
- State electronic signature laws other than UETA.
How does this affect my student loan?
The E-Sign law permits the Department of Education to publish additional rules governing the use of electronic signatures for the student loan industry.
What are the benefits of electronic signature?
An electronic signature improves the education financing process because it:
- Removes the need for paper documents by using a Web-based online process.
- Removes mail time from the process.
- Unless the borrower requires a paper copy, printing and mailing the document to the borrowers for their signature is unnecessary.
- Provides convenience to the consumer.
- Borrowers
- Schools
- Lenders
- Increases data accuracy and reduces processing time through online editing.
- Errors can often be identified when the document is completed (promissory note, deferment, forbearance, etc.).
How much faster will I receive my loan funds?
While we can't guarantee how much time will be saved by using electronic signature, we do know that the process will be much quicker than it has been in the past and will also be easier and more convenient.
Does my school or lender have to participate?
No. Individual lenders and schools decide whether they will participate.
Will all schools offer electronic signature?
Schools and lenders aren't required to participate. Each school and lender will decide whether they'll offer or participate in the process. Borrowers should contact their school financial aid advisor to find out if their school and lender participate.
If my lender offers electronic signature and my school participates in e-signature, will I be required to use e-signature?
No. Borrowers have the choice of applying online or completing a paper promissory note. Borrowers must give their consent before participating in the electronic signature process.
Can I still get a paper copy of my promissory note?
Yes. Student loan borrowers can request a paper copy of their signed promissory note. Generally, borrowers should ask their lenders for copies.
Is e-signature on a student loan document a confidential transaction?
The transaction will be confidential. Great lengths are taken to ensure that the information remains confidential at all times. The information will only be known by the borrower, any entities entitled to access the information by statute, regulation or rule of law (for example lenders and guarantors), and any third party required to implement or maintain the process. Please see our privacy policy for more details about our information sharing practices.