Full Text of SB3032 102nd General Assembly
SB3032 102ND GENERAL ASSEMBLY |
| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022 SB3032 Introduced 1/5/2022, by Sen. Laura Fine SYNOPSIS AS INTRODUCED: |
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Creates the Student Debt Assistance Act. Prohibits an institution of higher learning or a public or private entity that provides academic transcripts from (i) withholding academic transcripts from a current or former student because the student owes a debt to the institution, (ii) conditioning the provision of an academic transcript on the payment of a debt, other than a fee charged to provide the transcript, (iii) charging a higher fee to obtain an academic transcript or providing less favorable treatment of a request for an academic transcript because a current or former student owes a debt, or (iv) using academic transcript issuance as a tool for debt collection. Beginning with the 2022-2023 academic year, requires an institution of higher learning to make a good faith effort to offer a debt repayment plan to any student who owes a debt of $250 or more to the institution. Sets forth provisions concerning the debt repayment plan and enrollment procedures. Effective immediately.
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| | | STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY
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| | A BILL FOR |
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| 1 | | AN ACT concerning education.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Student Debt Assistance Act. | 6 | | Section 5. Findings. The General Assembly makes all of the | 7 | | following findings: | 8 | | (1) Student debt is a consistent and growing problem | 9 | | in this State as well as nationwide. Due to unpaid tuition | 10 | | and fees, colleges and universities in this State place | 11 | | thousands of students on academic hold and often send the | 12 | | uncollected student debt to collection agencies. Either of | 13 | | these methods used by a college or university to collect | 14 | | student debt leads to significant issues for students. | 15 | | Being placed on academic hold prevents a student from | 16 | | enrolling in additional courses of study or receiving the | 17 | | student's academic transcript, which may prevent the | 18 | | student from receiving a job promotion that may help the | 19 | | student pay the student's debt to the college or | 20 | | university. | 21 | | (2) Student debt that is sent to a collection agency | 22 | | often results in a student owing hundreds of dollars in | 23 | | collection fees and negatively affects the student's |
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| 1 | | credit score. Additionally, sending a student's debt to a | 2 | | collection agency is not an effective method to collect | 3 | | unpaid student debt. In Ohio, a state with aggressive debt | 4 | | collection practices, public universities were only able | 5 | | to recover less than 7 cents of every dollar owed. | 6 | | (3) Unpaid student debt presents an equity problem. | 7 | | Unpaid student debt disproportionately impacts low-income | 8 | | students and significantly affects students who attend | 9 | | community colleges. | 10 | | (4) This State and its institutions of higher learning | 11 | | must do whatever is possible to prevent student debt from | 12 | | being sent to collection agencies. | 13 | | (5) This Act provides opportunities for students to | 14 | | pay off their unpaid debts and to ensure that our | 15 | | institutions of higher learning are doing their part to | 16 | | assist students in these efforts.
| 17 | | Section 10. Definitions. In this Act: | 18 | | "Academic hold" means any restriction imposed by an | 19 | | institution of higher learning to prevent a student from | 20 | | enrolling in courses of study or gaining access to the | 21 | | institution's services. | 22 | | "Applicable provider" means an institution of higher | 23 | | learning or a public or private entity that is responsible for | 24 | | providing academic transcripts to a current or former student | 25 | | of an institution of higher learning. |
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| 1 | | "Debt" means any money, obligation, claim, or sum due or | 2 | | owing or alleged to be due or owing from a student to an | 3 | | institution of higher learning. "Debt" does not include the | 4 | | fee, if any, that is charged to students by an applicable | 5 | | provider for the actual cost of providing an academic | 6 | | transcript to a student. | 7 | | "Financial evidence" means a bank statement, pay stubs, | 8 | | student loan approval, or other documentation used by a | 9 | | student to provide proof to an institution of higher learning | 10 | | that the student will be able to pay the tuition and mandatory | 11 | | fees for the next academic term. | 12 | | "Good faith effort" means that an institution of higher | 13 | | learning has taken all necessary steps to contact a student | 14 | | concerning the student's delinquent debt and, if a student is | 15 | | eligible, has offered the student a debt repayment plan. A | 16 | | "good faith effort" to contact a student made by an | 17 | | institution of higher learning before sending the student's | 18 | | delinquent account to debt collection must include: | 19 | | (1) making numerous attempts to contact the student | 20 | | via phone or email; | 21 | | (2) giving the student ample time to respond to the | 22 | | final email or phone call, especially if the student | 23 | | withdrew from the institution for a documented medical | 24 | | reason or to take care of a family member; and | 25 | | (3) giving the student ample time to return the | 26 | | required paperwork if contact with the student is made |
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| 1 | | regarding the student's delinquent debt and a debt | 2 | | repayment plan is offered to the student. | 3 | | "Institution of higher learning" or "institution" has the | 4 | | meaning ascribed to that term in the Higher Education Student | 5 | | Assistance Act. | 6 | | Section 15. Withholding of academic transcripts | 7 | | prohibited. After the effective date of this Act, an | 8 | | applicable provider may not do any of the following: | 9 | | (1) Refuse to provide an academic transcript to a | 10 | | current or former student on the grounds that the student | 11 | | owes a debt. | 12 | | (2) Condition the provision of an academic transcript | 13 | | on the payment of a debt, other than a fee charged to | 14 | | provide the transcript. | 15 | | (3) Charge a higher fee for obtaining an academic | 16 | | transcript or provide less favorable treatment of a | 17 | | request for an academic transcript because a current or | 18 | | former student owes a debt. | 19 | | (4) Use academic transcript issuance as a tool for | 20 | | debt collection.
| 21 | | Section 20. Higher education debt repayment plan. | 22 | | (a) To provide students with an opportunity to pay off | 23 | | debt they owe to an institution of higher learning, beginning | 24 | | with the 2022-2023 academic year, an institution of higher |
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| 1 | | learning must make a good faith effort to offer a debt | 2 | | repayment plan to any student who owes a debt of $250 or more | 3 | | to the institution. A debt repayment plan offered by an | 4 | | institution of higher learning must satisfy the following | 5 | | requirements: | 6 | | (1) If the amount of the student's debt is less than or | 7 | | equal to $2,500, the student must be offered the option of | 8 | | at least a 3-month, 6-month, 9-month, 12-month, or | 9 | | 18-month debt repayment plan. | 10 | | (2) If the amount of the student's debt is more than | 11 | | $2,500, the student must be offered the option of at least | 12 | | a 6-month, 9-month, 12-month, 24-month, or 36-month debt | 13 | | repayment plan. | 14 | | (3) All late fees or past-due fees incurred by a | 15 | | student that remain unpaid on the date the student enters | 16 | | into the debt repayment plan with the institution of | 17 | | higher learning must be waived by the institution. | 18 | | (4) An institution of higher learning may use a | 19 | | third-party entity to assist in setting up and | 20 | | administering debt repayment plans; however, neither the | 21 | | institution of higher learning nor the third-party entity | 22 | | may charge the student interest on the amount of debt owed | 23 | | under the debt repayment plan. Neither the institution nor | 24 | | the third-party entity may charge the student more than | 25 | | $50 in fees to set up and administer the debt repayment | 26 | | plan. |
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| 1 | | (5) An institution of higher learning or a third-party | 2 | | entity that administers an institution's debt repayment | 3 | | plans may not charge a student any fee or prepayment | 4 | | penalty for the early repayment of the debt under the debt | 5 | | repayment plan.
| 6 | | (6) If a student enters into a debt repayment plan, | 7 | | the institution of higher learning or third-party entity | 8 | | must offer the student an option to renegotiate the debt | 9 | | repayment plan for a longer time period if the student can | 10 | | provide financial evidence that the student is not able to | 11 | | make the required payments due to unforeseen medical, | 12 | | travel, or cost-of-living expenses. The student may | 13 | | renegotiate only for time periods offered by the | 14 | | applicable provider. | 15 | | (7) A student may not have more than one active debt | 16 | | repayment plan at a time for a past-due debt with an | 17 | | institution of higher learning or a third-party entity | 18 | | that administers an institution's debt repayment plans. | 19 | | (8) If a student makes a payment of less than the | 20 | | negotiated monthly payment amount and fails to submit the | 21 | | remainder of the negotiated monthly payment due before the | 22 | | end of the applicable month, then the payment made shall | 23 | | be considered to be a missed payment for that month and | 24 | | shall be designated as such. The student may request that | 25 | | the institution of higher learning or third-party entity | 26 | | remove the designation if the student can provide |
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| 1 | | financial evidence that the student was unable to fully | 2 | | pay the negotiated monthly payment amount as a result of | 3 | | unforeseen medical, travel, or cost-of-living expenses. | 4 | | (b) If a student who is eligible under subsection (a) | 5 | | enters into a debt repayment plan with an institution of | 6 | | higher learning but fails to make 3 consecutive monthly | 7 | | payments, the institution of higher learning may initiate the | 8 | | process to send the remaining debt owed by the student to a | 9 | | collection agency. Prior to sending the student's debt to a | 10 | | collection agency, the institution must make a good faith | 11 | | effort to inform the student that the institution will be | 12 | | sending the student's debt to a collection agency unless the | 13 | | student begins to make payments again. The institution shall | 14 | | allow the student to appeal the institution's decision to send | 15 | | the debt to a collection agency. The student may also provide | 16 | | financial evidence to the institution to explain why the | 17 | | student has stopped making the debt payments. | 18 | | (c) Any applicable provider to which a student owes a debt | 19 | | of less than $250 must make a good faith effort to contact and | 20 | | inform the student of the debt. | 21 | | Section 25. Enrollment procedures for a student who owes | 22 | | debt. | 23 | | (a) Beginning with the 2022-2023 academic year, an | 24 | | institution of higher learning may not place a student on | 25 | | academic hold and must allow the student to continue to enroll |
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| 1 | | in courses of study if: | 2 | | (1) the student has entered into a debt repayment plan | 3 | | with the institution of higher learning; | 4 | | (2) the debt owed by the student is less than $2,500; | 5 | | and | 6 | | (3) the student provides financial evidence that the | 7 | | student will not be accruing additional debt. | 8 | | Any financial evidence requested by an institution under | 9 | | this subsection (a) must be of a nature that is easily | 10 | | accessible to the student and must not be overly burdensome to | 11 | | acquire. A student under this subsection (a) must provide | 12 | | financial evidence to the institution's office of financial | 13 | | aid or bursar's office. A student's financial evidence may be | 14 | | re-evaluated by the institution every academic term for as | 15 | | long as the student continues to owe debt to the institution. | 16 | | (b) An institution of higher learning may not consider | 17 | | applying for or receiving student loan assistance as adding | 18 | | additional debt under subsection (a). | 19 | | (c) If an institution of higher learning deems a student's | 20 | | financial evidence under subsection (a) insufficient, the | 21 | | student may appeal the institution's decision. The appeal | 22 | | process shall include a meeting with the institution's office | 23 | | of financial aid or bursar's office or another relevant | 24 | | department to discuss potential solutions that will allow the | 25 | | student to be eligible to enroll in additional courses of | 26 | | study. If, after the appeal process, the student's financial |
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| 1 | | evidence is still deemed insufficient, the student may request | 2 | | a new appeal or provide new financial evidence once each | 3 | | academic term. | 4 | | (d) Once a student pays a debt owed to an institution of | 5 | | higher learning, the institution may no longer request | 6 | | financial evidence from the student unless the student | 7 | | continues to meet the requirements under subsection (a). | 8 | | (e) A student under subsection (a) who is allowed to | 9 | | enroll in additional courses of study but fails to make 2 | 10 | | consecutive monthly payments under a debt repayment plan with | 11 | | the institution may be placed on academic hold by the | 12 | | institution until the student makes payments again. The | 13 | | institution shall allow the student to appeal the academic | 14 | | hold. In its discretion, the institution may remove the | 15 | | academic hold.
| 16 | | (f) If a student meets the eligibility requirements in | 17 | | subsection (a), enrolls in additional courses, and accrues | 18 | | additional debt in a subsequent semester or term, the | 19 | | institution of higher learning or third-party entity that | 20 | | administers an institution's debt repayment plan must give the | 21 | | student the ability to renegotiate the student's debt | 22 | | repayment plan to include the additional debt. If the | 23 | | additional debt added to the debt repayment plan causes the | 24 | | student to owe $2,500 or more in debt, the institution of | 25 | | higher learning may place the student on academic hold until | 26 | | the student meets the eligibility requirements in subsection |
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| 1 | | (a) again. | 2 | | (g) A student may not have more than one active debt | 3 | | repayment plan at a time for a past-due debt with an | 4 | | institution of higher learning or a third-party entity that | 5 | | administers an institution's debt repayment plans. | 6 | | Section 30. Applicability. Nothing in this Act preempts an | 7 | | institution of higher learning's ability to offer or prevents | 8 | | an institution from offering any kind of financial aid to a | 9 | | student for the purpose of keeping the student out of debt. | 10 | | Nothing in this Act prevents an institution of higher learning | 11 | | from forgiving a student's debt.
| 12 | | Section 99. Effective date. This Act takes effect upon | 13 | | becoming law.
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