Illinois General Assembly - Full Text of SB0086
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Full Text of SB0086  103rd General Assembly




SB0086 EnrolledLRB103 25185 RJT 51524 b

1    AN ACT concerning education.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Know Before You Owe Private Education Loan
5Act is amended by changing Sections 5 and 15 and by adding
6Sections 25 and 30 as follows:
7    (110 ILCS 983/5)
8    Sec. 5. Definitions. As used in this Act:
9    "Annual percentage rate" means the percentage rate
10calculated according to the Federal Reserve Board's
11methodology as set forth under Regulation Z, 12 CFR Part 1026.
12    "Cosigner" means any individual who is liable for the
13obligation of another without compensation, regardless of how
14the individual is designated in the contract or instrument
15with respect to that obligation, including an obligation under
16a private education loan extended to consolidate a borrower's
17preexisting student loans. The term includes any individual
18whose signature is requested, as a condition, to grant credit
19or to forbear on collection. The term does not include a spouse
20of an individual if the spouse's signature is needed solely to
21perfect the security interest in a loan.
22    "Educational expense" means any expense, in whole or in
23part, expressly used to finance postsecondary education,



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1regardless of whether the debt incurred by a student to pay
2that expense is owed to the provider of postsecondary
3education whose school, program, or facility the student
5    "Income share agreement" means an agreement under which a
6borrower commits to pay a percentage of his or her future
7income in exchange for money, payments, or credits applied to
8or on behalf of a borrower. An income share agreement
9constitutes a loan and debt within the meaning of this Act.
10    "Income share agreement provider" means:
11        (1) a person that provides money, payments, or credits
12    to or on behalf of a borrower pursuant to the terms of an
13    income share agreement; or
14        (2) any other person engaged in the business of
15    soliciting, making, funding, or extending income share
16    agreements.
17    "Institution of higher education" includes, but is not
18limited to, institutions falling under the Private Business
19and Vocational Schools Act of 2012, the Private College Act,
20and public institutions of higher education as defined in
21Section 1 of the Board of Higher Education Act. "Institution
22of higher education" also includes a person engaged in the
23business of providing postsecondary education, via
24correspondence, online, or in this State, to a person located
25in this State, regardless of whether the person has obtained
26authorization from the Illinois Board of Higher Education to



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1operate in this State or is accredited.
2    "Private educational lender" and "private education loan"
3have the meanings ascribed to the terms in Section 140 of the
4Truth in Lending Act (15 U.S.C. 1650). In addition, "private
5educational lender" includes an income share agreement
6provider and a student financing company and "private
7education loan" includes an income share agreement and student
9    "Student financing company" means a person engaged in the
10business of securing, making, or extending student financing.
11"Student financing company" does not include the following
12persons, only to the extent that State regulation is preempted
13by federal law:
14        (1) a federally chartered bank, savings bank, savings
15    and loan association, or credit union;
16        (2) a wholly owned subsidiary of a federally chartered
17    bank or credit union; and
18        (3) an operating subsidiary where each owner of the
19    operating subsidiary is wholly owned by the same federally
20    chartered bank or credit union.
21    "Student financing" means an extension of credit that:
22        (1) is not made, insured, or guaranteed under Title IV
23    of the Higher Education Act of 1965 (20 U.S.C. 1070 et
24    seq.);
25        (2) is extended to a consumer expressly, in whole or
26    in part, for postsecondary educational expenses,



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1    regardless of whether the extension of credit is provided
2    by the institution of higher education that the student
3    attends;
4        (3) does not include a private education loan;
5        (4) does not include an income share agreement; and
6        (5) does not include a loan that is secured by real
7    property or a dwelling.
8(Source: P.A. 102-583, eff. 8-26-21.)
9    (110 ILCS 983/15)
10    Sec. 15. Provision of information.
11    (a) Provision of loan statement to borrowers and
13        (1) Loan statement. A private educational lender that
14    disburses any funds with respect to a private education
15    loan described in this Section shall send loan statements
16    to the borrowers and cosigners of those funds not less
17    than once every 3 months during the time that the borrower
18    is enrolled at an institution of higher education.
19        (2) Contents of statements for income share
20    agreements. Each statement described in subparagraph (1)
21    with respect to income share agreements, shall:
22            (A) report the consumer's total amounts financed
23        under each income share agreement;
24            (B) report the percentage of income payable under
25        each income share agreement;



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1            (C) report the maximum number of monthly payments
2        required to be paid under each income share agreement;
3            (D) report the maximum amount payable under each
4        income share agreement;
5            (E) report the maximum duration of each income
6        share agreement;
7            (F) report the minimum annual income above which
8        payments are required under each income share
9        agreement; and
10            (G) report the annual percentage rate for each
11        income share agreement at the minimum annual income
12        above which payments are required and at $10,000
13        income increments thereafter up to the annual income
14        where the maximum number of monthly payments results
15        in the maximum amount payable.
16        (3) Contents of all other loan statements. Each
17    statement described in subparagraph (1) that does not fall
18    under subparagraph (2) shall:
19            (A) report the borrower's total remaining debt to
20        the private educational lender, including accrued but
21        unpaid interest and capitalized interest;
22            (B) report any debt increases since the last
23        statement; and
24            (C) list the current annual percentage rate for
25        each loan.
26    (b) Certification of exhaustion of federal student loan



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1funds to private educational lender. Upon the request of a
2private educational lender, acting in connection with an
3application initiated by a borrower for a private education
4loan in accordance with Section 5, the institution of higher
5education shall within 15 days of receipt of the request
6provide certification to such private educational lender:
7        (1) that the borrower who initiated the application
8    for the private education loan, or on whose behalf the
9    application was initiated, is enrolled or is scheduled to
10    enroll at the institution of higher education;
11        (2) of the borrower's cost of attendance at the
12    institution of higher education as determined under
13    paragraph (2) of subsection (a) of this Section;
14        (3) of the difference between:
15            (A) the cost of attendance at the institution of
16        higher education; and
17            (B) the borrower's estimated financial assistance
18        received under the federal Higher Education Act of
19        1965 and other assistance known to the institution of
20        higher education, as applicable;
21        (4) that the institution of higher education has
22    received the request for certification and will need
23    additional time to comply with the certification request;
24    and
25        (5) if applicable, that the institution of higher
26    education is refusing to certify the private education



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1    loan.
2    (c) Certification of exhaustion of federal student loan
3funds to borrower. With respect to a certification request
4described under subsection (b), and prior to providing such
5certification in paragraph (1) of subsection (b) or providing
6notice of the refusal to provide certification under paragraph
7(5) of subsection (b), the institution of higher education
9        (1) determine whether the borrower who initiated the
10    application for the private education loan, or on whose
11    behalf the application was initiated, has applied for and
12    exhausted the federal financial assistance available to
13    such borrower under the federal Higher Education Act of
14    1965 and inform the borrower and any cosigners
15    accordingly;
16        (2) provide the borrower and any cosigners whose loan
17    application has prompted the certification request by a
18    private educational lender, as described in paragraph (1)
19    of subsection (b), with the following information and
20    disclosures:
21            (A) the amount of additional federal student
22        assistance for which the borrower is eligible and the
23        advantages of federal loans under the federal Higher
24        Education Act of 1965, including disclosure of income
25        driven repayment options, fixed interest rates,
26        deferments, flexible repayment options, loan



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1        forgiveness programs, additional protections, and the
2        higher student loan limits for dependent borrowers
3        whose parents are not eligible for a Federal Direct
4        PLUS Loan;
5            (B) the borrower's ability to select a private
6        educational lender of the borrower's choice;
7            (C) the impact of a proposed private education
8        loan on the borrower's potential eligibility for other
9        financial assistance, including federal financial
10        assistance under the federal Higher Education Act; and
11            (D) the borrower's right to accept or reject a
12        private education loan within the 30-day period
13        following a private educational lender's approval of a
14        borrower's application and the borrower's 3-day right
15        to cancel period; and
16        (3) Any institution of higher education that is also
17    acting as a private educational lender shall provide the
18    certification of exhaustion of federal student loan funds
19    described in paragraphs (1) and (2) of this subsection (c)
20    to the borrower and any cosigners prior to disbursing
21    funds to the borrower. Any institution of higher education
22    that is not eligible for funding under Title IV of the
23    federal Higher Education Act of 1965 is not required to
24    provide this certification to the borrower or any
25    cosigners.
26(Source: P.A. 102-583, eff. 8-26-21; 102-813, eff. 5-13-22.)



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1    (110 ILCS 983/25 new)
2    Sec. 25. Cosigner disclosure; notice. Before extending a
3private education loan that requires a cosigner, a private
4educational lender shall disclose to the cosigner:
5        (1) how the private education loan obligation will
6    appear on the cosigner's credit report;
7        (2) how the cosigner will be notified if the private
8    education loan becomes delinquent, including how the
9    cosigner can cure the delinquency in order to avoid
10    negative credit furnishing and the loss of cosigner
11    release eligibility; and
12        (3) eligibility for release of the cosigner's
13    obligation on the private education loan, including the
14    number of on-time payments and any other criteria required
15    to approve the release of the cosigner from the loan
16    obligation.
17    (110 ILCS 983/30 new)
18    Sec. 30. Refinancing. Before offering a person a private
19education loan that is being used to refinance an existing
20education loan, a private educational lender shall provide the
21person with a disclosure explaining that the benefits and
22protections applicable to the existing loan may be lost due to
23the refinancing. The disclosure must be provided on a one-page
24information sheet in at least 12-point type and must be



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1written in simple, clear, understandable, and easily readable
3    Section 10. The Student Loan Servicing Rights Act is
4amended by changing Sections 1-5, 5-30, and 5-50 and by adding
5Sections 5-70, 5-75, 5-80, and 5-85 as follows:
6    (110 ILCS 992/1-5)
7    Sec. 1-5. Definitions. As used in this Act:
8    "Applicant" means a person applying for a license pursuant
9to this Act.
10    "Borrower" or "student loan borrower" means a person who
11has received or agreed to pay a student loan for his or her own
12educational expenses.
13    "Cosigner" means any individual who is liable for the
14obligation of another without compensation, regardless of how
15the individual is designated in the contract or instrument
16with respect to that obligation, including an obligation under
17a private education loan extended to consolidate a borrower's
18preexisting student loans. The term includes any individual
19whose signature is requested, as a condition, to grant credit
20or to forbear on collection. The term does not include a spouse
21of an individual if the spouse's signature is needed solely to
22perfect the security interest in a loan a person who has agreed
23to share responsibility for repaying a student loan with a



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1    "Department" means the Department of Financial and
2Professional Regulation.
3    "Division of Banking" means the Division of Banking of the
4Department of Financial and Professional Regulation.
5    "Federal loan borrower eligible for referral to a
6repayment specialist" means a borrower who possesses any of
7the following characteristics:
8        (1) requests information related to options to reduce
9    or suspend his or her monthly payment;
10        (2) indicates that he or she is experiencing or
11    anticipates experiencing financial hardship, distress, or
12    difficulty making his or her payments;
13        (3) has missed 2 consecutive monthly payments;
14        (4) is at least 75 days delinquent;
15        (5) is enrolled in a discretionary forbearance for
16    more than 9 of the previous 12 months;
17        (6) has rehabilitated or consolidated one or more
18    loans out of default within the past 12 months; or
19        (7) has not completed a course of study, as reflected
20    in the servicer's records, or the borrower identifies
21    himself or herself as not having completed a program of
22    study.
23    "Federal education loan" means any loan made, guaranteed,
24or insured under Title IV of the federal Higher Education Act
25of 1965.
26    "Income-driven payment plan certification" means the



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1documentation related to a federal student loan borrower's
2income or financial status the borrower must submit to renew
3an income-driven repayment plan.
4    "Income-driven repayment options" includes the
5Income-Contingent Repayment Plan, the Income-Based Repayment
6Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn
7Plan, the Revised Pay As You Earn Plan, and any other federal
8student loan repayment plan that is calculated based on a
9borrower's income.
10    "Licensee" means a person licensed pursuant to this Act.
11    "Other repayment plans" means the Standard Repayment Plan,
12the Graduated Repayment Plan, the Extended Repayment Plan, or
13any other federal student loan repayment plan not based on a
14borrower's income.
15    "Private education loan" has the meaning ascribed to the
16term in Section 140 of the federal Truth in Lending Act (15
17U.S.C. 1650). In addition, "private education loan" includes
18an income share agreement and student financing.
19    "Private loan borrower eligible for referral to a
20repayment specialist" means a borrower who possesses any of
21the following characteristics:
22        (1) requests information related to options to reduce
23    or suspend his or her monthly payments; or
24        (2) indicates that he or she is experiencing or
25    anticipates experiencing financial hardship, distress, or
26    difficulty making his or her payments.



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1    "Requester" means any borrower or cosigner that submits a
2request for assistance.
3    "Request for assistance" means all inquiries, complaints,
4account disputes, and requests for documentation a servicer
5receives from borrowers or cosigners.
6    "Secretary" means the Secretary of Financial and
7Professional Regulation, or his or her designee, including the
8Director of the Division of Banking of the Department of
9Financial and Professional Regulation.
10    "Servicing" means: (1) receiving any scheduled periodic
11payments from a student loan borrower or cosigner pursuant to
12the terms of a student loan; (2) applying the payments of
13principal and interest and such other payments with respect to
14the amounts received from a student loan borrower or cosigner,
15as may be required pursuant to the terms of a student loan; and
16(3) performing other administrative services with respect to a
17student loan.
18    "Student loan" or "loan" means any federal education loan
19or other loan primarily for use to finance a postsecondary
20education and costs of attendance at a postsecondary
21institution, including, but not limited to, tuition, fees,
22books and supplies, room and board, transportation, and
23miscellaneous personal expenses. "Student loan" includes a
24loan made to refinance a student loan.
25    "Student loan" shall not include an extension of credit
26under an open-end consumer credit plan, a reverse mortgage



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1transaction, a residential mortgage transaction, or any other
2loan that is secured by real property or a dwelling.
3    "Student loan" shall not include an extension of credit
4made by a postsecondary educational institution to a borrower
5if one of the following apply:
6        (1) The term of the extension of credit is no longer
7    than the borrower's education program.
8        (2) The remaining, unpaid principal balance of the
9    extension of credit is less than $1,500 at the time of the
10    borrower's graduation or completion of the program.
11        (3) The borrower fails to graduate or successfully
12    complete his or her education program and has a balance
13    due at the time of his or her disenrollment from the
14    postsecondary institution.
15    "Student loan servicer" or "servicer" means any person
16engaged in the business of servicing student loans. "Student
17loan servicer" or "servicer" includes persons or entities
18acting on behalf of the State Treasurer.
19    "Student loan servicer" shall not include:
20        (1) a bank, savings bank, savings association, or
21    credit union organized under the laws of the State or any
22    other state or under the laws of the United States;
23        (2) a wholly owned subsidiary of any bank, savings
24    bank, savings association, or credit union organized under
25    the laws of the State or any other state or under the laws
26    of the United States;



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1        (3) an operating subsidiary where each owner of the
2    operating subsidiary is wholly owned by the same bank,
3    savings bank, savings association, or credit union
4    organized under the laws of the State or any other state or
5    under the laws of the United States;
6        (4) the Illinois Student Assistance Commission and its
7    agents when the agents are acting on the Illinois Student
8    Assistance Commission's behalf;
9        (5) a public postsecondary educational institution or
10    a private nonprofit postsecondary educational institution
11    servicing a student loan it extended to the borrower;
12        (6) a licensed debt management service under the Debt
13    Management Service Act, except to the extent that the
14    organization acts as a subcontractor, affiliate, or
15    service provider for an entity that is otherwise subject
16    to licensure under this Act;
17        (7) any collection agency licensed under the
18    Collection Agency Act that is collecting post-default
19    debt;
20        (8) in connection with its responsibilities as a
21    guaranty agency engaged in default aversion, a State or
22    nonprofit private institution or organization having an
23    agreement with the U.S. Secretary of Education under
24    Section 428(b) of the Higher Education Act (20 U.S.C.
25    1078(B));
26        (9) a State institution or a nonprofit private



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1    organization designated by a governmental entity to make
2    or service student loans, provided in each case that the
3    institution or organization services fewer than 20,000
4    student loan accounts of borrowers who reside in Illinois;
5        (10) a law firm or licensed attorney that is
6    collecting post-default debt; or
7        (11) the State Treasurer.
8    "Total and permanent disability" means a physical or
9mental impairment, disease, or loss of a permanent nature that
10prevents employment with or without reasonable accommodation,
11with proof of disability being in the form of a declaration
12from the United States Social Security Administration, the
13Illinois Workers' Compensation Commission, the United States
14Department of Defense, or an insurer authorized to transact
15business in this State who is providing disability insurance
16coverage to a contractor. The term does not include a
17condition that has not progressed or been exacerbated or that
18the individual did not acquire until after the closing of the
19loan agreement. In addition, documentation sufficient to
20establish a total and permanent disability for a federal
21student loan made pursuant to Title IV of the federal Higher
22Education Act of 1965 is sufficient to establish a total and
23permanent disability under this Act.
24(Source: P.A. 100-540, eff. 12-31-18; 100-635, eff. 12-31-18;
25101-586, eff. 8-26-19.)



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1    (110 ILCS 992/5-30)
2    Sec. 5-30. Specialized assistance for student loan
4    (a) A servicer shall specially designate servicing and
5collections personnel deemed repayment specialists who have
6received enhanced training related to repayment options.
7    (b) A servicer shall refrain from presenting forbearance
8as the sole or first repayment option to a student loan
9borrower struggling with repayment unless the servicer has
10determined that, based on the borrower's financial status, a
11short term forbearance is appropriate.
12    (c) All inbound and outbound calls from a federal loan
13borrower eligible for referral to a repayment specialist and a
14private loan borrower eligible for referral to a repayment
15specialist shall be routed to a repayment specialist.
16    (d) During each inbound or outbound communication with an
17eligible federal loan borrower, a repayment specialist shall
18first inform a federal loan borrower eligible for referral to
19a repayment specialist that federal income-driven repayment
20plans that can reduce the borrower's monthly payment may be
21available, discuss such plans, and assist the borrower in
22determining whether a particular repayment plan may be
23appropriate for the borrower.
24    (e) A repayment specialist shall assess the long-term and
25short-term financial situation and needs of a federal loan
26borrower eligible for referral to a repayment specialist and



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1consider any available specific information from the borrower
2as necessary to assist the borrower in determining whether a
3particular income-driven repayment option may be available to
4the borrower.
5    (f) In each discussion with a federal loan borrower
6eligible for referral to a repayment specialist, a repayment
7specialist shall present and explain the following options, as
9        (1) total and permanent disability discharge, public
10    service loan forgiveness, closed school discharge, and
11    defenses to repayment;
12        (2) other repayment plans;
13        (3) deferment; and
14        (4) forbearance.
15    (g) A repayment specialist shall assess the long-term and
16short-term financial situation and needs of a private loan
17borrower eligible for referral to a repayment specialist in
18determining whether any private loan repayment options may be
19appropriate for the borrower.
20    (h) A servicer shall present and explain all private loan
21repayment options, including alternative repayment
22arrangements applicable to private student loan borrowers.
23    (i) A servicer shall be prohibited from implementing any
24compensation plan that has the intended or actual effect of
25incentivizing a repayment specialist to violate this Act or
26any other measure that encourages undue haste or lack of



SB0086 Enrolled- 19 -LRB103 25185 RJT 51524 b

2    (j) The requirements of this Section shall not apply if a
3repayment specialist has already conversed with a borrower
4consistent with the requirements of this Section.
5    (k) A servicer shall:
6        (1) provide on its website a description of any
7    modified or flexible repayment options offered by the
8    lender for private education loans;
9        (2) establish policies and procedures and implement
10    modified or flexible repayment options consistently in
11    order to facilitate the evaluation of such option
12    requests, including providing accurate information
13    regarding any options that may be available to the
14    borrower through the promissory note or that may have been
15    marketed to the borrower through marketing materials; and
16        (3) consistently present and offer private education
17    loan modification or flexible repayment options to all
18    borrowers with similar financial circumstances if the
19    servicer offers such modification or repayment options.
20    (l) A servicer may not place a loan or account into default
21or accelerate a loan while a borrower is seeking a loan
22modification or enrollment in a modified or flexible repayment
23plan, except that a servicer may place a loan or account into
24default or accelerate a loan for payment default 90 days or
25more after the borrower's default.
26(Source: P.A. 100-540, eff. 12-31-18.)



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1    (110 ILCS 992/5-50)
2    Sec. 5-50. Cosigner release.
3    (a) For private student loans, a servicer shall provide
4information on its website concerning the availability and
5criteria for a cosigner release.
6    (b) For any private education loan that obligates a
7cosigner, a servicer shall provide the borrower and the
8cosigner an annual written notice containing information about
9cosigner release, including the administrative and objective
10criteria the servicer requires to approve the release of the
11cosigner from the loan obligation and the process for applying
12for cosigner release. If the borrower has met the applicable
13payment requirement to be eligible for cosigner release, the
14servicer shall send the borrower and the cosigner a written
15notification by mail, and by electronic mail if the borrower
16or cosigner has elected to receive electronic communications
17from the servicer, informing the borrower and cosigner that
18the payment requirement to be eligible for cosigner release
19has been met. The notification must also include information
20about any additional criteria to qualify for cosigner release
21and the procedure to apply for cosigner release.
22    (c) A servicer shall provide written notice to a borrower
23who applies for cosigner release but whose application is
24incomplete. The written notice must include a description of
25the information needed to consider the application complete



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1and the date by which the applicant must furnish the missing
2information in order to complete the application.
3    (d) Within 30 days after a borrower submits a completed
4application for cosigner release, the servicer shall send the
5borrower and cosigner a written notice that informs the
6borrower and cosigner whether the servicer has approved or
7denied the cosigner release application. If the servicer
8denies a request for cosigner release, the borrower may
9request copies of any documents or information used in the
10determination, including the credit score threshold used by
11the servicer, the borrower's credit report, the borrower's
12credit score, and any other documents or information specific
13to the borrower. The servicer shall also provide any adverse
14action notices required under applicable federal law if the
15denial is based in whole or in part on any information
16contained in a credit report.
17    (e) In response to a written or oral request by the
18borrower for cosigner release, a servicer shall provide to the
19borrower the information described in subsection (b) of this
21(Source: P.A. 100-540, eff. 12-31-18.)
22    (110 ILCS 992/5-70 new)
23    Sec. 5-70. Cosigner release rights.
24    (a) A servicer may not impose any restriction that
25permanently bars a borrower from qualifying for cosigner



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1release, including restricting the number of times a borrower
2may apply for cosigner release.
3    (b) A servicer may not impose any negative consequences on
4a borrower or cosigner during the 60 days following the
5issuance of the notice required pursuant to subsection (c) of
6Section 5-50 of this Act or until the servicer makes a final
7determination about a borrower's cosigner release application,
8whichever occurs later. As used in this subsection (b),
9"negative consequences" includes the imposition of additional
10eligibility criteria, negative credit reporting, lost
11eligibility or cosigner release, late fees, interest
12capitalization, or other financial injury.
13    (c) For any private education loan issued on or after the
14effective date of this amendatory Act of the 103rd General
15Assembly, a servicer may not require proof of more than 12
16consecutive, on-time payments as part of the criteria for
17cosigner release. A borrower who has paid the equivalent of 12
18months of principal and interest payments within any 12-month
19period is deemed to have satisfied the consecutive, on-time
20payment requirement even if the borrower has not made payments
21monthly during the 12-month period. If a borrower or cosigner
22requests a change in terms that restarts the count of
23consecutive, on-time payments required for cosigner release,
24the servicer shall notify the borrower and cosigner in writing
25of the impact of the change and provide the borrower and
26cosigner with the right to withdraw or reverse the request to



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1avoid the impact.
2    (d) A borrower may request an appeal of a servicer's
3determination to deny a request for cosigner release, and the
4servicer shall permit the borrower to submit additional
5documentation evidencing the borrower's ability, willingness,
6and stability to meet the payment obligations. The borrower
7may request that another employee of the servicer review the
8cosigner release determination.
9    (e) A servicer shall establish and maintain a
10comprehensive record management system reasonably designed to
11ensure the accuracy, integrity, and completeness of
12information about cosigner release applications and to ensure
13compliance with applicable State and federal laws. The system
14must include the number of cosigner-release applications
15received, the approval and denial rate, and the primary
16reasons for any denial.
17    (110 ILCS 992/5-75 new)
18    Sec. 5-75. Cosigner and borrower rights.
19    (a) A servicer shall provide a cosigner with access to all
20documents or records related to the cosigned private education
21loan that are available to the borrower.
22    (b) If a servicer provides electronic access to documents
23and records for a borrower, it shall provide equivalent
24electronic access to the cosigner.
25    (c) Upon a borrower's request, the servicer shall redact



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1the borrower's contact information from documents and records
2provided to a cosigner.
3    (d) A servicer may not include in a private education loan
4executed on or after the effective date of this amendatory Act
5of the 103rd General Assembly a provision that permits the
6servicer to accelerate payments, in whole or in part, except
7upon a payment default. A servicer may not place any loan or
8account into default or accelerate a loan for any reason other
9than payment default.
10    (e) A private education loan executed before the effective
11date of this amendatory Act of the 103rd General Assembly may
12permit the servicer to accelerate payments only if the
13promissory note or loan agreement explicitly authorizes an
14acceleration and only for the reasons stated in the note or
16    (110 ILCS 992/5-80 new)
17    Sec. 5-80. Bankruptcy or death of cosigner.
18    (a) If a cosigner dies, the servicer may not attempt to
19collect against the cosigner's estate other than for payment
21    (b) With regard to the death or bankruptcy of a cosigner,
22if a private education loan is not more than 60 days delinquent
23at the time the servicer is notified of the cosigner's death or
24bankruptcy, the servicer may not change any terms or benefits
25under the promissory note, the repayment schedule, the



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1repayment terms, or the monthly payment amount or any other
2provision associated with the loan.
3    (110 ILCS 992/5-85 new)
4    Sec. 5-85. Total and permanent disability of borrower or
6    (a) For any private education loan issued on or after the
7effective date of this amendatory Act of the 103rd General
8Assembly, a servicer, when notified of the total and permanent
9disability of a borrower or cosigner, shall release the
10cosigner from the obligations of a cosigner under the private
11education loan. The servicer may not attempt to collect a
12payment from a cosigner following a notification of total and
13permanent disability of the borrower or cosigner.
14    (b) A servicer shall be notified of the total and
15permanent disability of a borrower and discharge the liability
16of the borrower and cosigner on the loan.
17    (c) After receiving a notification described in subsection
18(b) of this Section, the servicer may not:
19        (1) attempt to collect on the outstanding liability of
20    the borrower or cosigner; or
21        (2) monitor the disability status of the borrower at
22    any point after the date of discharge.
23    (d) A servicer shall, within 30 days after the release of
24either a cosigner or borrower from the obligation of a private
25education loan pursuant to subsection (a) or (b) of this



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1Section, notify both the borrower and cosigner of the release.
2    (e) A servicer shall, within 30 days after receiving
3notice of the total and permanent disability of a borrower
4pursuant to subsection (a) of this Section, provide the
5borrower with an option to designate an individual to have the
6legal authority to act on behalf of the borrower.
7    (f) If a cosigner is released from the obligations of a
8private education loan pursuant to subsection (a) of this
9Section, the servicer may not require the borrower to obtain
10another cosigner on the loan obligation.
11    (g) A servicer may not declare a default or accelerate the
12debt against a borrower on the sole bases of the release of the
13cosigner from the loan obligation due to total and permanent
14disability pursuant to subsection (a) of this Section.
15    Section 99. Effective date. This Act takes effect upon
16becoming law.