Department Endorses New Credit-Bureau-Reporting Codes

The U.S. Department of Education recently accepted recommendations to adopt new credit-bureau-reporting recommendations for Federal PLUS-loan death claims and total-and-permanent-disability claims. Lenders can begin using the new claim codes immediately.

The National Council of Higher Education Loan Programs, the Consumer Data Industry Association, and participants in the Federal Family Education Loan Program provided the recommendations to the Department. The new recommendations encourage lenders to begin using the following CDIA-approved codes when reporting the following claims.

Death claim for parent PLUS loan
In all cases involving a death claim for a parent PLUS loan, the recommendations encourage lenders to list credit-report information under the parent-borrower’s name and Social Security number.

In cases of the student’s death:

• If the borrower is not in default at the time of death:
  • Lender or servicer reports Account Status Code 13.
  • Lender or servicer reports ECOA Code “1.”
• If the borrower is in default at the time of death:
  • Lender or servicer continues to report the default.

In cases of the parent-borrower’s death:

• If the borrower is not in default at the time of death:
  • Lender or servicer reports Account Status 13.
  • Lender or servicer reports ECOA Code “X.”
• If the borrower is in default at the time of death:
  • Lender or servicer continues to report the default.

For further information contact USA Funds^®’ policy experts. 

Loan assigned to Department due to total-and-permanent disability

• If the borrower is not in default when the TPD claim is received/approved:
  • Lender or servicer reports with a Status Code of “05.”
  • Lender or servicer reports Payment Rating consistent with the current or delinquent status of the account on the date that the lender submits the claim or receives the claim payment.
• If the borrower is in default when the TPD claim is received/approved:
  • Lender or servicer continues to report the default.
  • The Department will be responsible for further credit-bureau reporting.

The Department offers additional guidance about total-and-permanent-disability claim codes in a July 5, 2006, electronic announcement.