[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5458 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5458

To amend the Truth in Lending Act and the Higher Education Act of 1965 
  to require additional disclosures and protections for students and 
    cosigners with respect to student loans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 28, 2010

 Mr. Adler of New Jersey (for himself, Mr. Pascrell, Mr. Cummings, and 
  Mr. Rothman of New Jersey) introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
   Committee on Education and Labor, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Truth in Lending Act and the Higher Education Act of 1965 
  to require additional disclosures and protections for students and 
    cosigners with respect to student loans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Christopher Bryski 
Student Loan Protection Act'' and ``Christopher's Law''.
    (b) Findings.--The Congress finds the following:
            (1) There is no requirement for Federal or private 
        education lenders to provide information with respect to, and 
        discuss the benefit of, creating an advance directive (such as 
        durable power of attorney, living will, etc.) for financial, 
        legal, and medical decisionmaking in accordance with State law 
        to be used in the event of the death, incapacitation, or 
        disability of the student or such cosigner (if any).
            (2) In harsh contrast to existing comprehensive policies of 
        the Secretary of Education, no requirement exists for private 
        education lenders to provide information with respect to, and 
        discuss the benefit of, credit insurance in connection with 
        private education loans that would protect the signer, and any 
        such cosigner, in the event of their death, incapacitation, or 
        disability.
            (3) No requirement exists for private education lenders' 
        master promissory notes to include the same clear and concise 
        wording in regards to the responsible party in the event the 
        signer or cosigner becomes disabled, incapacitated, or dies. A 
        clear and concise definition would provide standard terms and 
        conditions within private education lenders' master promissory 
        notes with respect to signer and cosigner obligations. Not 
        requiring clear and concise obligations allows for a very 
        unclear delineation of responsibility on the part of the 
        private education lender, which is a great example of the 
        freedom large private education lenders currently have.
            (4) No standard forms exist for defining disability, 
        incapacity or death of a private education loan signer, or 
        cosigner.
            (5) No requirement exists for eligible lending 
        institutions, as defined with the Higher Education Act of 1965, 
        to disclose to the borrower, information on the conditions 
        required to discharge the loan due to the disability, 
        incapacity or death of the signer or cosigner (if any).
            (6) Congress modeled the definition of disability in the 
        Americans with Disabilities Act of 1990 on the definition in 
        section 504 of the Rehabilitation Act of 1973, which, through 
        the time of the enactment of the Americans with Disabilities 
        Act of 1990, had been construed broadly to encompass both 
        actual and perceived limitations, and limitations imposed by 
        society.
            (7) Of the 1,400,000 people who sustain a traumatic brain 
        injury each year in the United States, 50,000 die; 235,000 are 
        hospitalized; and 1,100,000 are treated and released from an 
        emergency department.
            (8) It is estimated that the annual incidence of spinal 
        cord injury, not including those who die at the scene of the 
        accident, is approximately 40 cases per 1,000,000 people in the 
        United States or approximately 12,000 new cases each year. 
        Since there have not been any overall incidence studies of 
        spinal cord injuries in the United States since the 1970s, it 
        is not known if incidence has changed in recent years.
            (9) The number of disabled veterans has jumped by 25 
        percent since 2001 to 2,900,000. Today's veterans, disabled or 
        not, number nearly 24,000,000.
            (10) In the 2007-2008 academic year, 13 percent of students 
        attending a 4-year public school, and 26.2 percent of students 
        attending a 4-year private school, borrowed monies from private 
        loan providers.
            (11) According to Sallie Mae, in 2009, the number of 
        cosigned private educational loans increased from 66 percent to 
        84 percent of all private educational loans.

SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS.

    (a) In General.--Section 140 of the Truth in Lending Act (15 U.S.C. 
1650) is amended by adding at the end the following new subsection:
    ``(f) Additional Protections Relating to Death or Disability of 
Signer or Cosigner of a Private Education Loan.--
            ``(1) Obligation to discuss advance directives.--In 
        conjunction with--
                    ``(A) any student loan counseling provided by a 
                covered educational institution to any new signer and 
                cosigner (if any) at the time of any loan origination, 
                loan reapplication, or loan consolidation, or at the 
                time the cosigner assumes responsibility for repayment, 
                the institution shall provide information with respect 
                to, and discuss the benefit of, creating an advance 
                directive (such as a durable power of attorney, living 
                will, etc.) for financial, legal, and medical 
                decisionmaking, in accordance with State law, in the 
                event of the death, incapacitation, or disability of 
                the signer or cosigner (if any); and
                    ``(B) any negotiation or other discussion with 
                respect to any private education loan, the private 
                educational lender involved in such loan shall discuss 
                with the signer, and cosigner (if any), the benefit of 
                creating an advance directive (such as a durable power 
                of attorney, living will, etc.) for financial, legal, 
                and medical decisionmaking, in accordance with State 
                law, with respect to such loan, in the event of the 
                death, incapacitation, or disability of the student or 
                such cosigner (if any).
            ``(2) Clear and complete description of cosigner's 
        obligation.--In the case of any private education lender who 
        extends a private education loan for which any cosigner is 
        jointly liable, the lender shall define, clearly and concisely, 
        the terms of such person's obligations with respect to the 
        loan, including the effect the death, incapacitation, or 
        disability of the signer or cosigner (if any) would have on any 
        such obligation, in language that the Board determines would 
        give a reasonable person a reasonable apprehension of the 
        obligation being assumed by becoming a cosigner for the loan.
            ``(3) Credit insurance.--In the case of any private 
        education loan for which there is a cosigner, the private 
        educational lender involved in such loan--
                    ``(A) shall provide information with respect to, 
                and discuss the benefit of credit insurance with the 
                signer, and the cosigner, in connection with such loan 
                that would protect the signer and any cosigner in the 
                event of the death, incapacitation, or disability of 
                the signer or any such cosigner;
                    ``(B) shall discuss with the student and the 
                cosigner the benefit of credit insurance in connection 
                with such loan that would protect the student and any 
                cosigner in the event of the death or disability of the 
                student or any such cosigner;
                    ``(C) may provide or make arrangements for the 
                provision of any credit insurance referred to in 
                subparagraph (A) in conjunction with the loan; and
                    ``(D) may not--
                            ``(i) establish any condition or 
                        requirement that the signer and cosigner (if 
                        any) has or has not obtained any such consumer 
                        credit insurance from the private educational 
                        lender, and affiliate of the private education 
                        lender or any other consumer credit insurance 
                        provider; or
                            ``(ii) extend or deny a loan, or fix or 
                        vary the terms of the loan, on the basis that 
                        the signer and cosigner (if any) has or has not 
                        obtained any such consumer credit insurance 
                        from the private educational lender, and 
                        affiliate of the private education lender, or 
                        any other consumer credit insurance provider.
            ``(4) Model forms.--The Board shall publish model forms 
        under section 105 for describing a cosigner's obligation for 
        purposes of paragraph (2).
            ``(5) Regulations defining death or disability.--
                    ``(A) In general.--The Board shall--
                            ``(i) prescribe regulations defining the 
                        manner and standards for establishing that a 
                        private education loan signer, or consigner (if 
                        any), has died or become incapacitated or 
                        disabled; and
                            ``(ii) implement and enforce such 
                        regulations in connection with any private 
                        education loan.
                    ``(B) Coordination with secretary of education.--In 
                prescribing regulations under subparagraph (A), the 
                Board shall--
                            ``(i) consult with the Secretary of 
                        Education; and
                            ``(ii) conform such regulations with the 
                        regulations prescribed by such Secretary under 
                        section 437(a)(1) of the Higher Education Act 
                        of 1965 (20 U.S.C. 1087(a)(1)) to the fullest 
                        extent practicable, including safeguards to 
                        prevent fraud and abuse.
                    ``(C) Determination by the secretary of veterans 
                affairs.--The regulations prescribed under subparagraph 
                (A) shall provide that a determination described in 
                section 437(a)(2) of the Higher Education Act of 1965 
                (20 U.S.C. 1087(a)(2)) by the Secretary of Veterans 
                Affairs with respect to any person shall be dispositive 
                for such person for purposes of this subsection and any 
                agreement covered by this subsection.''.
    (b) Definitions.--Subsection (a) of section 140 of the Truth in 
Lending Act (15 U.S.C. 1650(a)) is amended by adding at the end the 
following new paragraphs:
            ``(9) Advance directive.--The term `advance directive' 
        means a written instruction, such as a living will or durable 
        power of attorney for health care, recognized under State law 
        (whether statutory or as recognized by the courts of the 
        State), relating to the provision of health care when the 
        individual is incapacitated.
            ``(10) Cosigner.--The term `cosigner'--
                    ``(A) means any individual who is liable for the 
                obligation of another without compensation, regardless 
                of how designated in the contract or instrument;
                    ``(B) includes any person whose signature is 
                requested as condition to grant credit or to forebear 
                on collection; and
                    ``(C) does not include a spouse of an individual 
                referred to in subparagraph (A) whose signature is 
                needed to perfect security interest individual.
            ``(11) Credit insurance.--The term `credit insurance' has 
        the meaning given to such term by the Board in regulations for 
        purposes of this section.
            ``(12) Disability.--The term `disability' has the meaning 
        given to such term in section 3 of the Americans with 
        Disabilities Act of 1990.
            ``(13) Durable power of attorney.--The term `durable power 
        of attorney' meaning given to such term in the Uniform Durable 
        Power of Attorney Act of 1979 and sections 5-501 through 5-505 
        of the Uniform Probate Code, as in effect in any State.
            ``(14) Incapacity.--The terms `incapacity', 
        `incapacitated', or `incapacitation' have the meanings given to 
        such terms in the Family and Medical Leave Act of 1968, and 
        regulations prescribed under such Act.''.

SEC. 3. FEDERAL STUDENT LOANS.

    (a) Federal PLUS Loans.--Section 428B of the Higher Education Act 
of 1965 (20 U.S.C. 1078-2) is amended by adding at the end the 
following:
    ``(g) Disclosure.--An eligible lender shall disclose to a 
prospective borrower, in simple and understandable terms, at the time 
the lender provides an application for a PLUS loan, information with 
respect to creating a durable power of attorney to be used in the event 
of the death or disability of the borrower (or the student on whose 
behalf the loan is borrowed by the parent borrower) including the uses 
and benefits of creating such a power of attorney with respect to 
student loans and other financial obligations of the borrower.''.
    (b) Federal Consolidation Loans.--Section 428C(b)(1)(F) of the 
Higher Education Act of 1965 (20 U.S.C. 1078-3(b)(1)(F)) is amended--
            (1) by redesignating clauses (vi) and (vii) as clauses 
        (vii) and (viii), respectively; and
            (2) by inserting after clause (v) the following new clause:
                            ``(vi) information with respect to creating 
                        an advanced directive (such as a durable power 
                        of attorney, living will, etc.) for financial 
                        legal and medical decisionmaking in accordance 
                        with State law in the event of the death, 
                        incapacitation, or disability of the borrower, 
                        including the uses and benefits of such an 
                        advanced directive with respect to student 
                        loans and other financial obligations of the 
                        borrower;''.
    (c) Entrance Counseling for Federal Loans.--Section 485(l)(2) of 
the Higher Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by 
adding at the end the following:
                    ``(L) Information on the conditions required to 
                discharge the loan due to the death, incapacitation, or 
                disability of the borrower, in accordance with section 
                437(a), and an explanation that, in the case of a 
                private education loan made through a private lender, 
                the borrower, the borrower's estate, and any consigner 
                of a such a private education loan may be obligated to 
                repay the full amount of the loan, regardless of the 
                death, incapacitation, or disability of the borrower.
                    ``(M) Information with respect to creating an 
                advanced directive (such as a durable power of 
                attorney, living will, etc.) for financial legal and 
                medical decisionmaking in accordance with State law a 
                durable power of attorney to be used in the event of 
                the death, incapacitation, or disability of the 
                borrower, including an explanation of the uses and 
                benefits of such an advanced directive with respect to 
                student loans and other financial obligations of the 
                borrower.''.
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