SB 86 — HIGHER ED-COSIGNER LOANS

SB0086 EngrossedEnrolled LRB103 25185 RJT 51524 b AN ACT concerning education.

"Educational expense" means any expense, in whole or in part, expressly used to finance postsecondary education, SB0086 EngrossedEnrolled - 2 - LRB103 25185 RJT 51524 b regardless of whether the debt incurred by a student to pay that expense is owed to the provider of postsecondary education whose school, program, or facility the student attends.

"Institution of higher education" also includes a person engaged in the business of providing postsecondary education, via correspondence, online, or in this State, to a person located in this State, regardless of whether the person has obtained authorization from the Illinois Board of Higher Education to SB0086 EngrossedEnrolled - 3 - LRB103 25185 RJT 51524 b operate in this State or is accredited.

(2) is extended to a consumer expressly, in whole or in part, for postsecondary educational expenses, SB0086 EngrossedEnrolled - 4 - LRB103 25185 RJT 51524 b regardless of whether the extension of credit is provided by the institution of higher education that the student attends;

SB0086 EngrossedEnrolled - 5 - LRB103 25185 RJT 51524 b (C) report the maximum number of monthly payments required to be paid under each income share agreement;

(b) Certification of exhaustion of federal student loan SB0086 EngrossedEnrolled - 6 - LRB103 25185 RJT 51524 b funds to private educational lender.

and (5) if applicable, that the institution of higher education is refusing to certify the private education SB0086 EngrossedEnrolled - 7 - LRB103 25185 RJT 51524 b loan.

(A) the amount of additional federal student assistance for which the borrower is eligible and the advantages of federal loans under the federal Higher Education Act of 1965, including disclosure of income driven repayment options, fixed interest rates, deferments, flexible repayment options, loan SB0086 EngrossedEnrolled - 8 - LRB103 25185 RJT 51524 b forgiveness programs, additional protections, and the higher student loan limits for dependent borrowers whose parents are not eligible for a Federal Direct PLUS Loan;

5-13-22.) SB0086 EngrossedEnrolled - 9 - LRB103 25185 RJT 51524 b (110 ILCS 983/25 new) Sec.

The disclosure must be provided on a one-page information sheet in at least 12-point type and must be SB0086 EngrossedEnrolled - 10 - LRB103 25185 RJT 51524 b written in simple, clear, understandable, and easily readable language.

SB0086 EngrossedEnrolled - 11 - LRB103 25185 RJT 51524 b "Department" means the Department of Financial and Professional Regulation.

"Income-driven payment plan certification" means the SB0086 EngrossedEnrolled - 12 - LRB103 25185 RJT 51524 b documentation related to a federal student loan borrower's income or financial status the borrower must submit to renew an income-driven repayment plan.

SB0086 EngrossedEnrolled - 13 - LRB103 25185 RJT 51524 b "Requester" means any borrower or cosigner that submits a request for assistance.

"Student loan" shall not include an extension of credit under an open-end consumer credit plan, a reverse mortgage SB0086 EngrossedEnrolled - 14 - LRB103 25185 RJT 51524 b transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling.

SB0086 EngrossedEnrolled - 15 - LRB103 25185 RJT 51524 b (3) an operating subsidiary where each owner of the operating subsidiary is wholly owned by the same bank, savings bank, savings association, or credit union organized under the laws of the State or any other state or under the laws of the United States;

(9) a State institution or a nonprofit private SB0086 EngrossedEnrolled - 16 - LRB103 25185 RJT 51524 b organization designated by a governmental entity to make or service student loans, provided in each case that the institution or organization services fewer than 20,000 student loan accounts of borrowers who reside in Illinois;

8-26-19.) SB0086 EngrossedEnrolled - 17 - LRB103 25185 RJT 51524 b (110 ILCS 992/5-30) Sec.

(e) A repayment specialist shall assess the long-term and short-term financial situation and needs of a federal loan borrower eligible for referral to a repayment specialist and SB0086 EngrossedEnrolled - 18 - LRB103 25185 RJT 51524 b consider any available specific information from the borrower as necessary to assist the borrower in determining whether a particular income-driven repayment option may be available to the borrower.

(i) A servicer shall be prohibited from implementing any compensation plan that has the intended or actual effect of incentivizing a repayment specialist to violate this Act or any other measure that encourages undue haste or lack of SB0086 EngrossedEnrolled - 19 - LRB103 25185 RJT 51524 b quality.

12-31-18.) SB0086 EngrossedEnrolled - 20 - LRB103 25185 RJT 51524 b (110 ILCS 992/5-50) Sec.

The written notice must include a description of the information needed to consider the application complete SB0086 EngrossedEnrolled - 21 - LRB103 25185 RJT 51524 b and the date by which the applicant must furnish the missing information in order to complete the application.

(a) A servicer may not impose any restriction that permanently bars a borrower from qualifying for cosigner SB0086 EngrossedEnrolled - 22 - LRB103 25185 RJT 51524 b release, including restricting the number of times a borrower may apply for cosigner release.

If a borrower or cosigner requests a change in terms that restarts the count of consecutive, on-time payments required for cosigner release, the servicer shall notify the borrower and cosigner in writing of the impact of the change and provide the borrower and cosigner with the right to withdraw or reverse the request to SB0086 EngrossedEnrolled - 23 - LRB103 25185 RJT 51524 b avoid the impact.

(c) Upon a borrower's request, the servicer shall redact SB0086 EngrossedEnrolled - 24 - LRB103 25185 RJT 51524 b the borrower's contact information from documents and records provided to a cosigner.

(b) With regard to the death or bankruptcy of a cosigner, if a private education loan is not more than 60 days delinquent at the time the servicer is notified of the cosigner's death or bankruptcy, the servicer may not change any terms or benefits under the promissory note, the repayment schedule, the SB0086 EngrossedEnrolled - 25 - LRB103 25185 RJT 51524 b repayment terms, or the monthly payment amount or any other provision associated with the loan.

(d) A servicer shall, within 30 days after the release of either a cosigner or borrower from the obligation of a private education loan pursuant to subsection (a) or (b) of this SB0086 EngrossedEnrolled - 26 - LRB103 25185 RJT 51524 b Section, notify both the borrower and cosigner of the release.