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Public Act 103-0748 Public Act 0748 103RD GENERAL ASSEMBLY |
Public Act 103-0748 | SB0086 Enrolled | LRB103 25185 RJT 51524 b |
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| AN ACT concerning education.
| Be it enacted by the People of the State of Illinois,
| represented in the General Assembly:
| Section 5. The Know Before You Owe Private Education Loan | Act is amended by changing Sections 5 and 15 and by adding | Sections 25 and 30 as follows: | (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 | (2) any other person engaged in the business of | soliciting, making, funding, or extending
income share | agreements. | "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; | (2) a wholly owned subsidiary of a federally chartered | bank or credit union; and | (3) an operating subsidiary where each owner of the | operating subsidiary is wholly owned by the same federally | chartered bank or credit union. | "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.); | (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; | (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 | property or a dwelling.
| (Source: P.A. 102-583, eff. 8-26-21.) | (110 ILCS 983/15)
| Sec. 15. Provision of information. | (a) Provision of loan statement to borrowers and | cosigners . | (1) Loan statement. A private educational lender that | disburses any funds with respect to a private education | loan described in this Section shall send loan statements | to the borrowers and cosigners of those funds not less | than once every 3 months during the time that the borrower | is enrolled at an institution of higher education. | (2) Contents of statements for income share | agreements. Each statement described in
subparagraph (1) | with respect to income share agreements, shall: | (A) report the consumer's total amounts financed | under each income share
agreement; | (B) report the percentage of income payable under | each income share agreement; |
| (C) report the maximum number of monthly payments | required to be paid under
each income share agreement; | (D) report the maximum amount payable under each | income share agreement; | (E) report the maximum duration of each income | share agreement; | (F) report the minimum annual income above which | payments are required under
each income share | agreement; and | (G) report the annual percentage rate for each | income share agreement at the
minimum annual income | above which payments are required and at $10,000 | income
increments thereafter up to the annual income | where the maximum number of monthly
payments results | in the maximum amount payable. | (3) Contents of all other loan statements. Each | statement described in subparagraph (1) that does not fall | under subparagraph (2) shall: | (A) report the borrower's total remaining debt to | the private educational lender, including accrued but | unpaid interest and capitalized interest; | (B) report any debt increases since the last | statement; and | (C) list the current annual percentage rate for | each loan. | (b) Certification of exhaustion of federal student loan |
| funds to private educational lender. Upon the request of a | private educational lender, acting in connection with an | application initiated by a borrower for a private education | loan in accordance with Section 5, the institution of higher | education shall within 15 days of receipt of the request | provide certification to such private educational lender: | (1) that the borrower who initiated the application | for the private education loan, or on whose behalf the | application was initiated, is enrolled or is scheduled to | enroll at the institution of higher education; | (2) of the borrower's cost of attendance at the | institution of higher education as determined under | paragraph (2) of subsection (a) of this Section; | (3) of the difference between: | (A) the cost of attendance at the institution of | higher education; and | (B) the borrower's estimated financial assistance | received under the federal Higher Education Act of | 1965 and other assistance known to the institution of | higher education, as applicable; | (4) that the institution of higher education has | received the request for certification and will need | additional time to comply with the certification request; | and | (5) if applicable, that the institution of higher | education is refusing to certify the private education |
| loan. | (c) Certification of exhaustion of federal student loan | funds to borrower. With respect to a certification request | described under subsection (b), and prior to providing such | certification in paragraph (1) of subsection (b) or providing | notice of the refusal to provide certification under paragraph | (5) of subsection (b), the institution of higher education | shall: | (1) determine whether the borrower who initiated the | application for the private education loan, or on whose | behalf the application was initiated, has applied for and | exhausted the federal financial assistance available to | such borrower under the federal Higher Education Act of | 1965 and inform the borrower and any cosigners | accordingly; | (2) provide the borrower and any cosigners whose loan | application has prompted the certification request by a | private educational lender, as described in paragraph (1) | of subsection (b), with the following information and | disclosures: | (A) the amount of additional federal student | assistance for which the borrower is eligible and the | advantages of federal loans under the federal Higher | Education Act of 1965, including disclosure of income | driven repayment options, fixed interest rates, | deferments, flexible repayment options, loan |
| forgiveness programs, additional protections, and the | higher student loan limits for dependent borrowers | whose parents are not eligible for a Federal Direct | PLUS Loan; | (B) the borrower's ability to select a private | educational lender of the borrower's choice; | (C) the impact of a proposed private education | loan on the borrower's potential eligibility for other | financial assistance, including federal financial | assistance under the federal Higher Education Act; and | (D) the borrower's right to accept or reject a | private education loan within the 30-day period | following a private educational lender's approval of a | borrower's application and the borrower's 3-day right | to cancel period; and | (3) Any institution of higher education that is also | acting as a private educational lender shall provide the | certification of exhaustion of federal student loan funds | described in paragraphs (1) and (2) of this subsection (c) | to the borrower and any cosigners prior to disbursing | funds to the borrower. Any institution of higher education | that is not eligible for funding under Title IV of the | federal Higher
Education Act of 1965 is not required to | provide this certification to the borrower or any | cosigners .
| (Source: P.A. 102-583, eff. 8-26-21; 102-813, eff. 5-13-22.) |
| (110 ILCS 983/25 new) | Sec. 25. Cosigner disclosure; notice. Before extending a | private education loan that requires a
cosigner, a private | educational lender shall disclose to the
cosigner: | (1) how the private education loan obligation will | appear
on the cosigner's credit report; | (2) how the cosigner will be notified if the private
| education loan becomes delinquent, including how the
| cosigner can cure the delinquency in order to avoid
| negative credit furnishing and the loss of cosigner
| release eligibility; and | (3) eligibility for release of the cosigner's | obligation
on the private education loan, including the | number of
on-time payments and any other criteria required | to
approve the release of the cosigner from the loan
| obligation. | (110 ILCS 983/30 new) | Sec. 30. Refinancing. Before offering a person a private | education loan that is
being used to refinance an existing | education loan, a private
educational lender shall provide the | person with a disclosure
explaining that the benefits and | protections applicable to the
existing loan may be lost due to | the refinancing. The
disclosure must be provided on a one-page | information sheet
in at least 12-point type and must be |
| written in simple,
clear, understandable, and easily readable | language. | Section 10. The Student Loan Servicing Rights Act is | amended by changing Sections 1-5, 5-30, and 5-50 and by adding | Sections 5-70, 5-75, 5-80, and 5-85 as follows: | (110 ILCS 992/1-5)
| 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 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 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 education loan" has the meaning ascribed to the | term in Section 140 of the federal Truth in Lending Act (15 | U.S.C. 1650). In addition, "private education loan" includes | an income share agreement and student financing. | "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" or "servicer" includes persons or entities | acting on behalf of the State Treasurer. | "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));
| (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;
| (10) a law firm or licensed attorney that is | collecting post-default debt; or | (11) the State Treasurer. | "Total and permanent disability" means a physical or | mental impairment, disease, or loss of a permanent nature that | prevents employment with or without reasonable accommodation, | with proof of disability being in the form of a declaration | from the United States Social Security Administration, the | Illinois Workers' Compensation Commission, the United States | Department of Defense, or an insurer authorized to transact | business in this State who is providing disability insurance | coverage to a contractor. The term does not include a | condition that has not progressed or been exacerbated or that | the individual did not acquire until after the closing of the | loan agreement. In addition, documentation sufficient to | establish a total and permanent disability for a federal | student loan made pursuant to Title IV of the federal Higher | Education Act of 1965 is sufficient to establish a total and | permanent disability under this Act. | (Source: P.A. 100-540, eff. 12-31-18; 100-635, eff. 12-31-18; | 101-586, eff. 8-26-19.) |
| (110 ILCS 992/5-30)
| Sec. 5-30. Specialized assistance for student loan | borrowers. | (a) A servicer shall specially designate servicing and | collections personnel deemed repayment specialists who have | received enhanced training related to repayment options. | (b) A servicer shall refrain from presenting forbearance | as the sole or first repayment option to a student loan | borrower struggling with repayment unless the servicer has | determined that, based on the borrower's financial status, a | short term forbearance is appropriate. | (c) All inbound and outbound calls from a federal loan | borrower eligible for referral to a repayment specialist and a | private loan borrower eligible for referral to a repayment | specialist shall be routed to a repayment specialist. | (d) During each inbound or outbound communication with an | eligible federal loan borrower, a repayment specialist shall | first inform a federal loan borrower eligible for referral to | a repayment specialist that federal income-driven repayment | plans that can reduce the borrower's monthly payment may be | available, discuss such plans, and assist the borrower in | determining whether a particular repayment plan may be | appropriate for the borrower. | (e) A repayment specialist shall assess the long-term and | short-term financial situation and needs of a federal loan | borrower eligible for referral to a repayment specialist and |
| consider any available specific information from the borrower | as necessary to assist the borrower in determining whether a | particular income-driven repayment option may be available to | the borrower. | (f) In each discussion with a federal loan borrower | eligible for referral to a repayment specialist, a repayment | specialist shall present and explain the following options, as | appropriate: | (1) total and permanent disability discharge, public | service loan forgiveness, closed school discharge, and | defenses to repayment; | (2) other repayment plans; | (3) deferment; and | (4) forbearance. | (g) A repayment specialist shall assess the long-term and | short-term financial situation and needs of a private loan | borrower eligible for referral to a repayment specialist in | determining whether any private loan repayment options may be | appropriate for the borrower. | (h) A servicer shall present and explain all private loan | repayment options, including alternative repayment | arrangements applicable to private student loan borrowers. | (i) A servicer shall be prohibited from implementing any | compensation plan that has the intended or actual effect of | incentivizing a repayment specialist to violate this Act or | any other measure that encourages undue haste or lack of |
| quality. | (j) The requirements of this Section shall not apply if a | repayment specialist has already conversed with a borrower | consistent with the requirements of this Section. | (k) A servicer shall: | (1) provide on its website a description of any | modified or flexible repayment options offered by the | lender for private education loans; | (2) establish policies and procedures and implement | modified or flexible repayment options consistently in | order to facilitate the evaluation of such option | requests, including providing accurate information | regarding any options that may be available to the | borrower through the promissory note or that may have been | marketed to the borrower through marketing materials; and | (3) consistently present and offer private education | loan modification or flexible repayment options to all | borrowers with similar financial circumstances if the | servicer offers such modification or repayment options. | (l) A servicer may not place a loan or account into default | or accelerate a loan while a borrower is seeking a loan | modification or enrollment in a modified or flexible repayment | plan, except that a servicer may place a loan or account into | default or accelerate a loan for payment default 90 days or | more after the borrower's default.
| (Source: P.A. 100-540, eff. 12-31-18 .) |
| (110 ILCS 992/5-50)
| Sec. 5-50. Cosigner release. | (a) For private student loans, a servicer shall provide | information on its website concerning the availability and | criteria for a cosigner release.
| (b) For any private education loan that obligates a | cosigner, a servicer shall provide the borrower and the | cosigner an annual written notice containing information about | cosigner release, including the administrative and objective | criteria the servicer requires to approve the release of the | cosigner from the loan obligation and the process for applying | for cosigner release. If the borrower has met the applicable | payment requirement to be eligible for cosigner release, the | servicer shall send the borrower and the cosigner a written | notification by mail, and by electronic mail if the borrower | or cosigner has elected to receive electronic communications | from the servicer, informing the borrower and cosigner that | the payment requirement to be eligible for cosigner release | has been met. The notification must also include information | about any additional criteria to qualify for cosigner release | and the procedure to apply for cosigner release. | (c) A servicer shall provide written notice to a borrower | who applies for cosigner release but whose application is | incomplete. The written notice must include a description of | the information needed to consider the application complete |
| and the date by which the applicant must furnish the missing | information in order to complete the application. | (d) Within 30 days after a borrower submits a completed | application for cosigner release, the servicer shall send the | borrower and cosigner a written notice that informs the | borrower and cosigner whether the servicer has approved or | denied the cosigner release application. If the servicer | denies a request for cosigner release, the borrower may | request copies of any documents or information used in the | determination, including the credit score threshold used by | the servicer, the borrower's credit report, the borrower's | credit score, and any other documents or information specific | to the borrower. The servicer shall also provide any adverse | action notices required under applicable federal law if the | denial is based in whole or in part on any information | contained in a credit report. | (e) In response to a written or oral request by the | borrower for cosigner release, a servicer shall provide to the | borrower the information described in subsection (b) of this | Section. | (Source: P.A. 100-540, eff. 12-31-18 .) | (110 ILCS 992/5-70 new) | Sec. 5-70. Cosigner release rights. | (a) A servicer may not impose any restriction that | permanently bars a borrower from qualifying for cosigner |
| release, including restricting the number of times a borrower | may apply for cosigner release. | (b) A servicer may not impose any negative consequences on | a borrower or cosigner during the 60 days following the | issuance of the notice required pursuant to subsection (c) of | Section 5-50 of this Act or until the servicer makes a final | determination about a borrower's cosigner release application, | whichever occurs later. As used in this subsection (b), | "negative consequences" includes the imposition of additional | eligibility criteria, negative credit reporting, lost | eligibility or cosigner release, late fees, interest | capitalization, or other financial injury. | (c) For any private education loan issued on or after the | effective date of this amendatory Act of the 103rd General | Assembly, a servicer may not require proof of more than 12 | consecutive, on-time payments as part of the criteria for | cosigner release. A borrower who has paid the equivalent of 12 | months of principal and interest payments within any 12-month | period is deemed to have satisfied the consecutive, on-time | payment requirement even if the borrower has not made payments | monthly during the 12-month period. If a borrower or cosigner | requests a change in terms that restarts the count of | consecutive, on-time payments required for cosigner release, | the servicer shall notify the borrower and cosigner in writing | of the impact of the change and provide the borrower and | cosigner with the right to withdraw or reverse the request to |
| avoid the impact. | (d) A borrower may request an appeal of a servicer's | determination to deny a request for cosigner release, and the | servicer shall permit the borrower to submit additional | documentation evidencing the borrower's ability, willingness, | and stability to meet the payment obligations. The borrower | may request that another employee of the servicer review the | cosigner release determination. | (e) A servicer shall establish and maintain a | comprehensive record management system reasonably designed to | ensure the accuracy, integrity, and completeness of | information about cosigner release applications and to ensure | compliance with applicable State and federal laws. The system | must include the number of cosigner-release applications | received, the approval and denial rate, and the primary | reasons for any denial. | (110 ILCS 992/5-75 new) | Sec. 5-75. Cosigner and borrower rights. | (a) A servicer shall provide a cosigner with access to all | documents or records related to the cosigned private education | loan that are available to the borrower. | (b) If a servicer provides electronic access to documents | and records for a borrower, it shall provide equivalent | electronic access to the cosigner. | (c) Upon a borrower's request, the servicer shall redact |
| the borrower's contact information from documents and records | provided to a cosigner. | (d) A servicer may not include in a private education loan | executed on or after the effective date of this amendatory Act | of the 103rd General Assembly a provision that permits the | servicer to accelerate payments, in whole or in part, except | upon a payment default. A servicer may not place any loan or | account into default or accelerate a loan for any reason other | than payment default. | (e) A private education loan executed before the effective | date of this amendatory Act of the 103rd General Assembly may | permit the servicer to accelerate payments only if the | promissory note or loan agreement explicitly authorizes an | acceleration and only for the reasons stated in the note or | agreement. | (110 ILCS 992/5-80 new) | Sec. 5-80. Bankruptcy or death of cosigner. | (a) If a cosigner dies, the servicer may not attempt to | collect against the cosigner's estate other than for payment | default. | (b) With regard to the death or bankruptcy of a cosigner, | if a private education loan is not more than 60 days delinquent | at the time the servicer is notified of the cosigner's death or | bankruptcy, the servicer may not change any terms or benefits | under the promissory note, the repayment schedule, the |
| repayment terms, or the monthly payment amount or any other | provision associated with the loan. | (110 ILCS 992/5-85 new) | Sec. 5-85. Total and permanent disability of borrower or | cosigner. | (a) For any private education loan issued on or after the | effective date of this amendatory Act of the 103rd General | Assembly, a servicer, when notified of the total and permanent | disability of a borrower or cosigner, shall release the | cosigner from the obligations of a cosigner under the private | education loan. The servicer may not attempt to collect a | payment from a cosigner following a notification of total and | permanent disability of the borrower or cosigner. | (b) A servicer shall be notified of the total and | permanent disability of a borrower and discharge the liability | of the borrower and cosigner on the loan. | (c) After receiving a notification described in subsection | (b) of this Section, the servicer may not: | (1) attempt to collect on the outstanding liability of | the borrower or cosigner; or | (2) monitor the disability status of the borrower at | any point after the date of discharge. | (d) A servicer shall, within 30 days after the release of | either a cosigner or borrower from the obligation of a private | education loan pursuant to subsection (a) or (b) of this |
| Section, notify both the borrower and cosigner of the release. | (e) A servicer shall, within 30 days after receiving | notice of the total and permanent disability of a borrower | pursuant to subsection (a) of this Section, provide the | borrower with an option to designate an individual to have the | legal authority to act on behalf of the borrower. | (f) If a cosigner is released from the obligations of a | private education loan pursuant to subsection (a) of this | Section, the servicer may not require the borrower to obtain | another cosigner on the loan obligation. | (g) A servicer may not declare a default or accelerate the | debt against a borrower on the sole bases of the release of the | cosigner from the loan obligation due to total and permanent | disability pursuant to subsection (a) of this Section.
| Section 99. Effective date. This Act takes effect upon | becoming law.
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Effective Date: 8/2/2024
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