(110 ILCS 947/105)
Sec. 105. Procedure on default. Upon default by the borrower on any
loan guaranteed under this Act, upon the death of the borrower, or upon
report from the lender that the borrower has become a person with a total and permanent disability, as determined in accordance with the Higher Education Act of
1965, the lender shall promptly notify the Commission, and the Commission shall
pay to the lender the amount of loss sustained by the lender upon that loan as
soon as that amount has been determined. The amount of loss on any loan shall
be determined in accordance with the definitions, rules, and regulations of the
Commission, and shall not exceed (1) the unpaid balance of the principal
amount; (2) the unpaid accrued interest; and (3) the unpaid late charges.
Upon payment by the Commission of the guaranteed portion of the loss,
the Commission shall be subrogated to the rights of the holder of the
obligation upon the insured loan and shall be entitled to an assignment of
the note or other evidence of the guaranteed loan by the lender.
The Commission shall file any and all lawsuits on delinquent and defaulted
student loans in the County of Cook where venue shall be deemed to be proper.
A defendant may request a change of venue to the county where he resides,
and the court has the authority to grant the change. Any defendant, within
30 days of service of summons, may file a written request by mail with the
Commission to change venue. Upon receipt, the Commission shall move the
court for the change of venue.
The Commission shall upon the filing and completion of the requirements
for the "Adjustment of Debts of an Individual with Regular Income", pursuant
to Title 11, Chapter 13 of the United States Code, proceed to collect
the outstanding balance of the loan guaranteed under this Act. Educational
loans guaranteed under this Act shall not be discharged by the filing of
the "Adjustment of Debts of an Individual with Regular Income", unless the
loan first became due more than 5 years, exclusive of any applicable suspension
period, prior to the filing of the petition; or unless excepting the debt from
discharge will impose an undue hardship on the debtor and the debtor's
dependents.
The Commission shall proceed to recover educational loans upon the filing
of a petition under "Individual Liquidation", pursuant to Title 11, Chapter
7 of the United States Code, unless the loan first became due more than 5
years, exclusive of any applicable suspension period, prior to the filing of
the petition; or unless excepting the debt from discharge will impose an undue
hardship on the debtor and the debtor's dependents.
Nothing in this Section shall be construed to preclude any forbearance
for the benefit of the borrower which may be agreed upon by the
party to the guaranteed loan and approved by the Commission, to preclude
forbearance by the Commission in the enforcement of the guaranteed
obligation after payment on that guarantee, or to require collection of the
amount of any loan by the lender or by the Commission from the estate of a
deceased borrower or from a borrower found by the lender to have become
a person with a total and permanent disability.
Nothing in this Section shall be construed to excuse the holder of a
loan from exercising reasonable care and diligence in the making and
collection of loans under this Act. If the Commission after reasonable
notice and opportunity for hearing to a lender finds that it has
substantially failed to exercise such care and diligence, the Commission
shall disqualify that lender for the guarantee of further loans until the
Commission is satisfied that the lender's failure has ceased and finds that
there is reasonable assurance that the lender will in the future exercise
necessary care and diligence or comply with the rules and regulations of
the Commission.
(Source: P.A. 99-143, eff. 7-27-15.)
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