the first billing notice for a loan with a six-month grace period (30 days

before the first payment is due). These two notices may be combined.

For a borrower with a nine-month initial grace period, the school must
make a third contact 240 days after the grace period begins to remind the
borrower of the date and amount of the first payment. Like the second
contact for a loan with a six-month grace period, this 240-day contact is
timed to coincide with the first billing notice. Again, the school may
combine the two notices. (Refer to the chart below.)

Contact with Borrower *

er

er
w

w
During Grace Period

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30 days 30 days

6-month grace period

9-month grace period

* 30-day billing notice must be sent to borrower at the same time if loan has 6-month grace period.
** 30-day billing notice must be sent to borrower at the same time if loan has 9-month grace period.

BILLING PROCEDURES

Billing refers to that series of actions the school routinely performs to

notify borrowers of payments due, remind them of overdue payments,
and demand payment of overdue amounts.

The school may choose a coupon payment system as its method of billing.
If so, the school must send the coupons to the borrower at least 30 days
before the first payment is due. If the school does not use a coupon
system, it must, at least 30 days before the first payment is due, send the
borrower a statement of account and a written notice giving the name and
address of the party to which payments should be sent. The statement of

Due Diligence 6-69