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110 ILCS 983/5 (110 ILCS 983/5)
Sec. 5. Definitions. As used in this Act: "Annual percentage rate" means the percentage rate calculated according to the Federal
Reserve Board's methodology as set forth under Regulation Z, 12 CFR Part 1026. "Cosigner" means any individual who is liable for the
obligation of another without compensation, regardless of how the
individual is designated in the contract or instrument with respect
to that obligation, including an obligation under a private
education loan extended to consolidate a borrower's preexisting
student loans. The term includes any individual whose signature is
requested, as a condition, to grant credit or to forbear on
collection. The term does not include a spouse of an individual if the
spouse's signature is needed solely to perfect the security
interest in a loan. "Educational expense" means any expense, in whole or in part,
expressly used to finance postsecondary education, regardless of
whether the debt incurred by a student to pay that expense is
owed to the provider of postsecondary education whose school,
program, or facility the student attends. "Income share agreement" means an agreement under which a borrower commits to pay a percentage of his or her future income in exchange for money, payments, or credits applied to or on behalf of a borrower. An income share agreement constitutes a loan and debt within the meaning of this Act. "Income share agreement provider" means: (1) a person that provides money, payments, or | | credits to or on behalf of a borrower pursuant to the terms of an income share agreement; or
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| (2) any other person engaged in the business of
| | soliciting, making, funding, or extending income share agreements.
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| "Institution of higher education" includes, but is not limited to, institutions falling under the Private Business and Vocational Schools Act of 2012, the Private College Act, and public institutions of higher education as defined in Section 1 of the Board of Higher Education Act. "Institution of higher education" also includes a person engaged in the business of providing postsecondary education, via correspondence, online, or in this State, to a person located in this State, regardless of whether the person has obtained authorization from the Illinois Board of Higher Education to operate in this State or is accredited.
"Private educational lender" and "private education loan" have the meanings ascribed to the terms in Section 140 of the Truth in Lending Act (15 U.S.C. 1650). In addition, "private educational lender" includes an income share agreement provider and a student financing company and "private education loan" includes an income share agreement and student financing.
"Student financing company" means a person engaged in the business of securing, making, or extending student financing. "Student financing company" does not include the following persons, only to the extent that State regulation is preempted by federal law:
(1) a federally chartered bank, savings bank, savings
| | and loan association, or credit union;
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| (2) a wholly owned subsidiary of a federally
| | chartered bank or credit union; and
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| (3) an operating subsidiary where each owner of the
| | operating subsidiary is wholly owned by the same federally chartered bank or credit union.
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| "Student financing" means an extension of credit that:
(1) is not made, insured, or guaranteed under Title
| | IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);
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| (2) is extended to a consumer expressly, in whole or
| | in part, for postsecondary educational expenses, regardless of whether the extension of credit is provided by the institution of higher education that the student attends;
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| (3) does not include a private education loan;
(4) does not include an income share agreement; and
(5) does not include a loan that is secured by real
| |
(Source: P.A. 102-583, eff. 8-26-21; 103-748, eff. 8-2-24.)
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