(110 ILCS 992/7-5)

Sec. 7-5. Definitions. As used in this Article:

"Amount financed" means the amounts advanced by the EISA provider to the consumer or on behalf of the consumer, or if the EISA provider is a merchant financing the sale of goods or services to the consumer using an EISA, "amount financed" means the amount credited by the EISA provider toward the purchase of expenses described in the definition of "educational income share agreement".

"Annual percentage rate" or "APR" means the percentage rate calculated according to the Federal Reserve Board's methodology as set forth under Regulation Z, 12 CFR Part 1026. The "annual percentage rate" of an EISA is the measure of the cost of the EISA, expressed as a yearly rate, that relates to the amount and timing of value received by the consumer to the amount and timing of payments made, including any charges or fees that would be included in the APR as set forth under Regulation Z, 12 CFR Part 1026. The "annual percentage rate" is determined in accordance with either the actuarial method or the United States rule method.

"Cash price" has the meaning given in 12 CFR 1026.2(a)(9).

"Consumer" means a natural person who enters into an EISA.

"Educational income share agreement" or "EISA" means an agreement between a consumer and an EISA provider under which:

(1) the EISA provider credits or advances a sum of money to the consumer or to a third party on the consumer's behalf or, if the EISA provider is a seller of goods or services to the consumer, the EISA provider credits or advances toward the purchase of such goods or services;

(2) the consumer is obligated to make periodic payments, if any become due, to the EISA provider calculated, based upon, or determined by the consumer's income;

(3) the consumer incurs an obligation in each payment period only if the individual's income in that period is above an income threshold specified in the EISA;

(4) there is an EISA duration after which the obligation is complete, regardless of how much has been paid, as long as the consumer has paid any prior amounts due;

(5) each of these elements is available at the time the agreement is executed;

(6) the agreement is not made, insured, or guaranteed under Title IV of the federal Higher Education Act of 1965 or another federally subsidized educational finance program; and

(7) the agreement is extended to a consumer expressly, in whole or in part, for postsecondary educational expenses, tuition, or other obligations of, or pay amounts to or on behalf of such an individual, for the costs associated with a postsecondary training program or any other program designed to increase the individual's human capital, employability, or earning potential, including, but not limited to, a program eligible to participate as a program under Title IV of the federal Higher Education Act of 1965, as well as any personal expenses, such as books, supplies, transportation, and living costs, incurred by the individual while enrolled in such a program and any other costs or expenses included in the definition of "qualified higher education expenses" under 26 U.S.C. 529(e)(3)(A), including the refinancing of loans or agreements used for the purposes described in this paragraph (7) and regardless of whether the agreement is provided by the educational institution that the consumer attends.

For purposes of this definition, an EISA shall be treated as a credit, within the meaning of that term under 15 U.S.C. 1602(f), and as a "private education loan", within the meaning of that term under 15 U.S.C. 1650(a)(8), to the extent the proceeds of the EISA are used for postsecondary educational expenses in a manner consistent with the definition of that term.

"EISA duration" means the maximum time during which a consumer could remain obligated on the EISA, other than periods when an EISA provider is attempting to collect past-due amounts and absent periods of payment relief pauses, forbearance, military service suspension, or other suspension of obligations at the request of the consumer, regardless of whether the consumer's income is greater than the minimum income.

"EISA maximum number of payments" means the maximum number of EISA payments during EISA payment periods in which the consumer's income is equal to or greater than the income threshold that a consumer could be required to make under the terms of the EISA. "EISA maximum number of payments" does not include periods of payment relief pause.

"EISA payment" means a calculated monthly payment in excess of $0.00 that counts toward the maximum income-based payments under the EISA. An "EISA payment" is required only for income earned during an EISA payment period in which the consumer's income was equal to or greater than the income threshold.

"EISA payment calculation method" means the mechanism, formula, percentage, dollar figure, or other means of calculating a student's payment obligation, based on the student's income, under the terms of the EISA.

"EISA payment cap" means the maximum amount of money a consumer must pay to satisfy the terms of an EISA, which may be expressed as a dollar value, a multiple of the amount funded to the student or on the student's behalf, or as a maximum effective annual percentage rate.

"EISA payment cap" does not include charges that would be excluded from the definition of the term "finance charge" under 12 CFR 1026.

"EISA provider" means:

(1) a person or entity that provides money, payments, or credits to or on behalf of a consumer pursuant to the terms of an EISA;

(2) any person or entity engaged in the business of soliciting, making, funding, or extending EISAs; or

(3) any person or entity that is providing educational services to the consumer and receiving compensation from an EISA provider (separate from proceeds of the EISA to cover educational expenses of the consumer) for advertising, marketing, or recommending EISAs, on behalf of an EISA provider, for those educational services.

This definition does not apply to an entity that either (i) has no direct interactions with the consumer and is not responsible for making credit decisions regarding the consumer or (ii) is the provider of the educational services to the consumer, unless the entity qualifies under paragraph (1), (2), or (3).

"Federal poverty guidelines" means the poverty guidelines updated periodically in the Federal Register by the U.S. Department of Health and Human Services under the authority of 42 U.S.C. 9902(2).

"Garnishment" means any legal or equitable procedure through which earnings of an individual are required to be withheld for payment of obligations to an EISA provider as set forth in the Code of Civil Procedure.

"Income threshold" means a fixed dollar amount that is the minimum income per payment period that an EISA recipient is required to earn before the EISA recipient is required to make a payment on an EISA for such payment period.

"Index" means the Consumer Price Index for Urban Wage Earners and Clerical Workers: U.S. City Average, All Items, 1967=100, compiled by the Bureau of Labor Statistics, United States Department of Labor.

"Payment relief pause" means a period of time that is requested by the consumer during which the consumer is not required to make payments despite the consumer's income exceeding the income threshold.

"Sales price" means the "total sale price" as set forth in 12 CFR 1026.18(j).

(Source: P.A. 104-383, eff. 8-15-25.)