Records Retention for Higher Education Loan Records

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Records Retention for Higher Education Loan
Records

• Donald S. Skupsky, JD, CRM, FAI, MIT
• Information Requirements ClearinghouseDenver,
  Colorado
• dskupsky_at_irch.com
• www.irch.com

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Records Management

• The systematic control of records during
  creation, maintenance and disposition

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Records Retention Program

• A component of a Records Management Program that
• Systematically determines the appropriate period
  for preserving records
• Systematically controls the destruction of
  records at the appropriate time

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Records Retention Schedule

• A record prepared as part of the Records
  Retention Program identifying an organizations
  records and records retention information

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Record Values Affecting Records Retention

• Operational / User
• Legal
• Legal RequirementsWhat you must do!
• Legal Considerations What you may want to do!
• Historical

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Other Issues Not Affecting Records Retention

• Form of records
• Schedule for microfilming or electronic imaging
• Schedule for transfer from active to inactive
  storage
• Vital records status

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Why Develop A Records Retention Program?

• Cost savings
• Space
• Staff
• Equipment
• Information management
• Improved access to valuable information
• Better management of valuable information

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Why Develop A Records Retention Program?

• Legal Protection
• Compliance with laws records exist for
  legally-required periods
• Litigation, government investigation and audit
• Records that should exist . . . do exist!
• Records that should not exist . . . do not exist!

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Consequences of Improper Destruction of Records

• Loss of rights
• Loss of time and money
• Fines / Penalties
• Obstruction of justice
• Contempt of Court
• Adverse inference in litigation
• Sanctions

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Court Concerns with Improper Destruction of
Records

• Evidence of guilt or liability
• Destruction of evidence / Obstruction of justice
• Unfair advantage given to one party
• Innocent party disadvantaged or incurs
  unnecessary costs

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Court Requirements for Legally Sufficient
Destruction of Records

• Retention periods comply with law.
• Retention program consistently implemented.
• Retention program implemented before litigation
  imminent or pending.
• Destruction suspended before litigation imminent
  or pending.
• Retention program documented.

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Records Retention for Higher Education Loan
Programs

• Schools 34 CFR 668.24
• Lenders 34 CFR 682.414
• Guarantors 34 CFR 682.414

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Recordkeeping Requirements for Schools

• Records systematically organized
• Records available for inspection
• Form paper, microfilm, computer, optical disk,
  CD-ROM, etc.
• Retrievable
• Student Aid Report original or image
• Reproducible as print
• If signature / seal original or image

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Retention for Schools

• Parent / Student borrower eligibility
• 3 years after award year in which student last
  attended school
• Loan Administration
• 3 years after award year

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Required Records for Guaranty Agencies

• Loan records
• Lender claims
• Payment history
• Collection history
• Wage garnishment
• Collection
• Audit report

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Retention Requirements for Guaranty Agencies

• Loan records
• 3 years after borrower repays
• 5 years after another source repays
• Audit report 5 years after report

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Recordkeeping Requirements for Guaranty Agencies

• Store according to 34 CFR 668.24(d)(3).
• Promissory Notes
• Store in electronic or other format only if
  electronically signed.
• Retain the original or true and exact copy
  until paid.
• Return to borrower with payment notification.

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Legal Status of Promissory Notes Maintained
Electronically

• Department of Education
• Can generally store records electronically or as
  electronic images.
• Can store promissory notes electronically or as
  electronic images, only if
• Signed electronically
• Implication Not signed manually

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Federal Electronic Signatures in International
Transactions Act (E-Sign) 15 USC 7001 7031

• Signatures, contracts or other records cannot be
  denied legal effect because electronic.
• Contracts cannot be denied legal effect because
  electronic signatures or electronic records used.

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E-Sign Effect on Other Laws

• Retaining electronic record fulfills all legal
  requirements to keep records, if
• Electronic records accurately reflect information
  in record.
• Electronic records remains accessible to all
  parties entitled to access.
• E-Sign applies to requirements for original
  records.

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E-Sign Retention Requirement

• Retain electronic records in electronic form.
• Retain electronic records for the period of time
  the records must be retained.

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E-Sign Versus DOE Regulation

• E-Sign permits electronic records in place of the
  originals.
• E-Sign is a federal statute.
• DOE 34 CFR 668.24 is a federal regulation.
• Any provision of DOE regulations that conflicts
  with a federal statute is invalid and
  unenforceable.

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E-Sign Versus DOE RegulationConclusion Under
E-Sign

• 1. A guaranty agency or lender may keep the
  original signed promissory note.
• 2. A guaranty agency or lender may
• Store a promissory note electronically using
  electronic imaging, microfilm or other similar
  technique,
• Even if the promissory note was not signed
  electronically.

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E-Sign Versus DOE RegulationConclusion

• 3. A guaranty agency or lender my
• Store a promissory note electronically using an
  electronic data management system,
• If the promissory note is signed electronically.

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Uniform Electronic Transaction Act (UETA)

• Adopted in over 28 states.
• Similar to E-Sign.
• E-Sign stipulates UETA controls in case of
  conflict.
• UETA treats electronic records similarly to
  E-Sign.
• Same conclusion regarding DOE regulations under
  UETA.

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Problem With E-mail

• Replacement for telephone or face-to-face
  conversation
• Authors believe their E-mail is private
• Authors dont believe they are making records
• E-mail is a tool to communicate
• Authors dont go through a formal process to
  create E-mail

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Problem With E-mail

• E-mail language not to the same standard as
  formal letter or memo
• Loose language
• Incomplete thoughts
• Authors/recipients selectively destroy E-mail
  records
• E-mail subject to litigation as an admission
• Restrictions of E-mail reduce efficiency

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A New Definition

• Record. The result of recording or preserving
  information on any media with the intent to
  preserve information that reflects the position
  or official business of an organization.
• Record Official Record

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Skupsky Recommendations for E-Mail

• E-Mail should be defined as non-record material
  
• E-Mail should self-destruct in 30 days
• Procedures to convert selected E-Mail to
  records
• Assign record series code plus retention period
  and store in electronic filing system, or
• Print and store in paper file

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Uniform Laws

• Uniform Rules of Evidence
• Uniform Photographic Copies of Business and
  Public Records as Evidence Act
• Uniform Preservation of Private Business Records
  Act
• Uniform Electronic Transactions Act (UETA)

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Hearsay

• A statement other than one made by the declarant
  while testifying at the trial or hearing, offered
  in evidence to prove the truth of the matter
  asserted.
• - Uniform Rules of Evidence, Rule 801.

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Uniform Rules of EvidenceDefinition Records -
Rule 1001(a)

• Records . . . letters, words, sounds or numbers,
  or their equivalent, set down by handwriting,
  typewriting, printing, photostating,
  photographing, magnetic impulse, chemical or
  electronic recording, or other form of data
  compilation.
• Data compilation computer record

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Uniform Rules of EvidenceHearsay Exception -
Rule 803(6)

• Records in any form admissible in evidence, if
• Records of act or event
• Made at or near time of event
• By or from person with knowledge
• Kept in the course of regularly conducted
  business activity

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Uniform Rules of EvidenceHearsay Exception -
Rule 803(6)

• Regular practice of business activity to make
  these records
• Testimony provided showing compliance by
  custodian or other qualified person
• Unless source of information or method or
  circumstances of preparation lack trustworthiness

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Uniform Rules of EvidenceAuthentication and
Identification - Rule 901

• Foundation required before all records (and
  evidence) admitted into evidence
• Evidence sufficient to support a finding that the
  matter in question is what its proponents claim

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Uniform Rules of EvidenceAuthentication and
Identification - Rule 901

• Example Rule 901(b)(9)
• Evidence describing a process or system used to
  produce the result, and
• Showing that the process or system produced an
  accurate result

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Uniform Rules of EvidenceOriginal - Rule 1001(c)

• Writing and recording itself
• Counterpart intended to have the same effect as
  the original
• Computer printout or other output
• Readable by sight
• Shown to reflect the data accurately

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Uniform Rules of EvidenceDuplicate - Rule 1001(d)

• Counterpart produced from
• Same impression as the original,
• Same matrix as the original,

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Uniform Rules of EvidenceDuplicate - Rule 1001(d)

• By means of photography, including enlargements
  and miniatures, or by mechanical or electronic
  rerecording, or by chemical reproduction, or
• By other equivalent techniques which accurately
  reproduces the original.

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Uniform Rules of EvidenceOther Evidence of
Contents - Rule 1004

• Originals not required
• Originals lost or destroyed, without bad faith

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Uniform Rules of EvidenceAdmissibility of
Duplicates - Rule 1003

• Duplicates admissible to the same extent as
  originals, unless
• Genuine question raised as to the authenticity or
  the continuing effectiveness of the originals, or
• It would be unfair to admit the duplicates in
  place of the originals

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Uniform Photographic Copies of Business and
Public Records as Evidence Act (UPA)

• Reproductions made in regular course of business
• Reproductions by any technique that accurately
  reproduces the originals
• Originals can be destroyed after reproduction
• Reproductions admissible in evidence/administrativ
  e proceedings

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Uniform Photographic Copies of Business and
Public Records as Evidence Act (UPA)

• Explicit permission to destroy after reproduction
• Rule of conduct for federal transactions,
  including education
• Still in about 30 states and US Federal Government

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The End