II 112th CONGRESS 1st Session S. 1748 IN THE SENATE OF THE UNITED STATES October 20, 2011 Mr. Lautenberg introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 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.

1.

Short title; Findings

(a)

Short title

This Act may be cited as the Christopher Bryski Student Loan Protection Act or Christopher’s Law. (b)

Findings

Congress finds the following: (1)No requirement exists for private educational lenders’ promissory notes to include a clear and conspicuous description of the responsibilities of a borrower and cosigner in the event the borrower or cosigner becomes disabled, incapacitated, or dies. (2)An estimated 1,700,000 people sustain a traumatic brain injury each year, with older adolescents aged 15 to 19 years old more likely to sustain a traumatic brain injury than other age groups. (3)It has been estimated that the annual incidence of spinal cord injury, not including those who die at the scene of an accident, is approximately 40 cases per 1,000,000 people in the United States or approximately 12,000 new cases each year. These injuries can lead to permanent disability or loss of movement and can prohibit the victim from engaging in any substantial gainful activity. (4)In the 2007–2008 academic year, 13 percent of students attending a 4-year public institution of higher education, and 26.2 percent of students attending a 4-year private institution of higher education, borrowed monies from private educational lenders. (5)According to Sallie Mae, in 2009, the percentage of cosigned private education loans increased from 66 percent to 84 percent of all private education loans.

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: (g)

Additional protections relating to death or disability of borrower or cosigner of a private education loan

(1)

Clear and conspicuous description of cosigner’s obligation

In the case of any private educational lender who extends a private education loan for which any cosigner is jointly liable, the lender shall clearly and conspicuously describe, in writing, the cosigner’s obligations with respect to the loan, including the effect the death, disability, or inability to engage in any substantial gainful activity of the borrower or any cosigner would have on any such obligation, in language that the Bureau determines would give a reasonable person a reasonable understanding of the obligation being assumed by becoming a cosigner for the loan. (2)

Model form

The Bureau shall publish a model form under section 105 for describing a cosigner’s obligation for purposes of paragraph (1). (3)

Definition of death, disability, or inability to engage in any substantial gainful activity

For the purposes of this subsection with respect to a borrower or cosigner, the term death, disability, or inability to engage in any substantial gainful activity— (A)means any condition described in section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)); and (B)shall be interpreted by the Bureau in such a manner as to conform with the regulations prescribed by the Secretary of Education under section 437(a) of such Act (20 U.S.C. 1087(a)) to the fullest extent practicable, including safeguards to prevent fraud and abuse. . (b)

Definitions

Section 140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)) is amended— (1)by redesignating paragraphs (1) through (8) as paragraphs (2) through (9), respectively; and (2)by inserting before paragraph (2) (as redesignated by paragraph (1)) the following: (1)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 forbear on collection; and (C)does not include a spouse of an individual referred to in subparagraph (A) whose signature is needed to perfect the security interest in the loan; .

3.

Federal student 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, disability, or inability to engage in any substantial gainful activity 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 educational lender (as such terms are defined in section 140 of the Truth in Lending Act (15 U.S.C. 1650)), the borrower, the borrower’s estate, and any cosigner of such a private education loan may be obligated to repay the full amount of the loan, regardless of the death or disability of the borrower or any other condition described in section 437(a). .