Public Act 100-0635
 
HB4397 EnrolledLRB100 17085 AXK 32236 b


  
    AN ACT concerning education.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Student Loan Servicing Rights Act is amended  
by changing Section 1-5 as follows:
 
    (110 ILCS 992/1-5)
    (This Section may contain text from a Public Act with a 
delayed effective date)

    Sec. 1-5. Definitions. As used in this Act:
    "Applicant" means a person applying for a license pursuant 
to this Act.
    "Borrower" or "student loan borrower" means a person who 
has received or agreed to pay a student loan for his or her own 
educational expenses.
    "Cosigner" means a person who has agreed to share 
responsibility for repaying a student loan with a borrower.
    "Department" means the Department of Financial and 
Professional Regulation.
    "Division of Banking" means the Division of Banking of the 
Department of Financial and Professional Regulation.
    "Federal loan borrower eligible for referral to a repayment 
specialist" means a borrower who possesses any of the following 
characteristics:
        (1) requests information related to options to reduce 
    or suspend his or her monthly payment;
        (2) indicates that he or she is experiencing or 
    anticipates experiencing financial hardship, distress, or 
    difficulty making his or her payments;
        (3) has missed 2 consecutive monthly payments;
        (4) is at least 75 days delinquent;
        (5) is enrolled in a discretionary forbearance for more 
    than 9 of the previous 12 months;
        (6) has rehabilitated or consolidated one or more loans 
    out of default within the past 12 months; or
        (7) has not completed a course of study, as reflected 
    in the servicer's records, or the borrower identifies 
    himself or herself as not having completed a program of 
    study.
    "Federal education loan" means any loan made, guaranteed, 
or insured under Title IV of the federal Higher Education Act 
of 1965.
    "Income-driven payment plan certification" means the 
documentation related to a federal student loan borrower's 
income or financial status the borrower must submit to renew an 
income-driven repayment plan.
    "Income-driven repayment options" includes the 
Income-Contingent Repayment Plan, the Income-Based Repayment 
Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn 
Plan, the Revised Pay As You Earn Plan, and any other federal 
student loan repayment plan that is calculated based on a 
borrower's income.
    "Licensee" means a person licensed pursuant to this Act.
    "Other repayment plans" means the Standard Repayment Plan, 
the Graduated Repayment Plan, the Extended Repayment Plan, or 
any other federal student loan repayment plan not based on a 
borrower's income.
    "Private loan borrower eligible for referral to a repayment 
specialist" means a borrower who possesses any of the following 
characteristics:
        (1) requests information related to options to reduce 
    or suspend his or her monthly payments; or
        (2) indicates that he or she is experiencing or 
    anticipates experiencing financial hardship, distress, or 
    difficulty making his or her payments.
    "Requester" means any borrower or cosigner that submits a 
request for assistance.
    "Request for assistance" means all inquiries, complaints, 
account disputes, and requests for documentation a servicer 
receives from borrowers or cosigners.
    "Secretary" means the Secretary of Financial and 
Professional Regulation, or his or her designee, including the 
Director of the Division of Banking of the Department of 
Financial and Professional Regulation.
    "Servicing" means: (1) receiving any scheduled periodic 
payments from a student loan borrower or cosigner pursuant to 
the terms of a student loan; (2) applying the payments of 
principal and interest and such other payments with respect to 
the amounts received from a student loan borrower or cosigner, 
as may be required pursuant to the terms of a student loan; and 
(3) performing other administrative services with respect to a 
student loan.
    "Student loan" or "loan" means any federal education loan 
or other loan primarily for use to finance a postsecondary 
education and costs of attendance at a postsecondary 
institution, including, but not limited to, tuition, fees, 
books and supplies, room and board, transportation, and 
miscellaneous personal expenses.  "Student loan" includes a 
loan made to refinance a student loan.
    "Student loan" shall not include an extension of credit 
under an open-end consumer credit plan, a reverse mortgage 
transaction, a residential mortgage transaction, or any other 
loan that is secured by real property or a dwelling.
    "Student loan" shall not include an extension of credit 
made by a postsecondary educational institution to a borrower 
if one of the following apply:
        (1) The term of the extension of credit is no longer 
    than the borrower's education program.
        (2) The remaining, unpaid principal balance of the 
    extension of credit is less than $1,500 at the time of the 
    borrower's graduation or completion of the program.
        (3) The borrower fails to graduate or successfully 
    complete his or her education program and has a balance due 
    at the time of his or her disenrollment from the 
    postsecondary institution.
    "Student loan servicer" or "servicer" means any person 
engaged in the business of servicing student loans.
    "Student loan servicer" shall not include:
        (1) a 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;
        (2) a wholly owned subsidiary of any 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;
        (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;
        (4) the Illinois Student Assistance Commission and its 
    agents when the agents are acting on the Illinois Student 
    Assistance Commission's behalf;
        (5) a public postsecondary educational institution or
    
    a private nonprofit postsecondary educational institution
    
    servicing a student loan it extended to the borrower;
        (6) a licensed debt management service under the Debt
    
    Management Service Act, except to the extent that the
    
    organization acts as a subcontractor, affiliate, or
    
    service provider for an entity that is otherwise subject to    
    licensure under this Act;
        (7) any collection agency licensed under the
    
    Collection Agency Act that is collecting post-default

    debt;
        (8)  in connection with its responsibilities as a 
    guaranty agency engaged in default aversion, a State or 
    nonprofit private institution or organization having an 
    agreement with the U.S. Secretary of Education under 
    Section 428(b) of the Higher Education Act (20 U.S.C. 
    1078(B)); or

        (9)  a State institution or a nonprofit private 
    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; 
    or .


        (10) a law firm or licensed attorney that is collecting 
    post-default debt. 
(Source: P.A. 100-540, eff. 12-31-18.)
 
 
    Section 99. Effective date. This Act takes effect December 
31, 2018.