[Congressional Record Volume 161, Number 48 (Monday, March 23, 2015)]
[Senate]
[Pages S1712-S1716]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Reed, and Ms. Warren):
  S. 840. A bill to require certain protections for student loan 
borrowers, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 840

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Student Loan Borrower Bill 
     of Rights''.

     SEC. 2. TRUTH IN LENDING ACT AMENDMENTS.

       The Truth in Lending Act (15 U.S.C. 1601 et seq.) is 
     amended--
       (1) in section 128 (15 U.S.C. 1638)--
       (A) in subsection (e)--
       (i) in the subsection heading, by striking ``Private'';
       (ii) in paragraph (1)(O), by striking ``paragraph (6)'' and 
     inserting ``paragraph (9)'';
       (iii) in paragraph (2)(L), by striking ``paragraph (6)'' 
     and inserting ``paragraph (9)'';
       (iv) in paragraph (4)(C), by striking ``paragraph (7)'' and 
     inserting ``paragraph (10)'';
       (v) by redesignating paragraphs (5) through (11) as 
     paragraphs (8) through (14), respectively;
       (vi) by inserting after paragraph (4) the following:
       ``(5) Disclosures before first fully amortized payment.--
     Not fewer than 30 days and not more than 150 days before the 
     first fully amortized payment on a postsecondary education 
     loan is due from the borrower, the postsecondary educational 
     lender shall disclose to the borrower, clearly and 
     conspicuously--
       ``(A) the information described in--
       ``(i) paragraph (2)(A) (adjusted, as necessary, for the 
     rate of interest in effect on the date the first fully 
     amortized payment on a postsecondary education loan is due);
       ``(ii) subparagraphs (B) through (G) of paragraph (2);
       ``(iii) paragraph (2)(H) (adjusted, as necessary, for the 
     rate of interest in effect on the date the first fully 
     amortized payment on a postsecondary education loan is due);
       ``(iv) paragraph (2)(K); and
       ``(v) subparagraphs (O) and (P) of paragraph (2);
       ``(B) the scheduled date upon which the first fully 
     amortized payment is due;
       ``(C) the name of the lender and servicer, and the address 
     to which communications and payments should be sent including 
     a telephone number and website where the borrower may obtain 
     additional information;
       ``(D) a description of alternative repayment plans, 
     including loan consolidation or refinancing, and 
     servicemember or veteran benefits under the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 501 et seq.) or other 
     Federal or State law related to postsecondary education 
     loans; and
       ``(E) a statement that a Servicemember and Veterans Liaison 
     designated under paragraph (15)(I) is available to answer 
     inquiries about servicemember and veteran benefits related to 
     postsecondary education loans, including the toll-free 
     telephone number to contact the Liaison pursuant to paragraph 
     (15)(I).
       ``(6) Disclosures when borrower is 30 days delinquent.--Not 
     fewer than 5 days after a borrower becomes 30 days delinquent 
     on a postsecondary education loan, the postsecondary 
     educational lender shall disclose to the borrower, clearly 
     and conspicuously--
       ``(A) the date on which the loan will be charged-off (as 
     defined in paragraph (15)(A)) or assigned to collections, 
     including the consequences of such charge-off or assignment 
     to collections, if no payment is made;
       ``(B) the minimum payment that the borrower must make to 
     avoid the loan being charged off (as defined in paragraph 
     (15)(A)) or assigned to collection, and the minimum payment 
     that the borrower must make to bring the loan current;
       ``(C) a statement informing the borrower that a payment of 
     less than the minimum payment described in subparagraph (B) 
     could result in the loan being charged off (as defined in 
     paragraph (15)(A)) or assigned to collection; and
       ``(D) a statement that a Servicemember and Veterans Liaison 
     designated under paragraph (15)(I) is available to answer 
     inquiries about servicemember and veteran benefits related to 
     postsecondary education loans, including the toll-free 
     telephone number to contact the Liaison pursuant to paragraph 
     (15)(I).
       ``(7) Disclosures when borrower is having difficulty making 
     payment or is 60 days delinquent.--
       ``(A) In general.--Not fewer than 5 days after a borrower 
     notifies a postsecondary educational lender that the borrower 
     is having difficulty making payment or a borrower becomes 60 
     days delinquent on a postsecondary education loan, the 
     postsecondary educational lender shall--
       ``(i) complete a full review of the borrower's 
     postsecondary education loan and make a reasonable effort to 
     obtain the information necessary to determine--

       ``(I) if the borrower is eligible for an alternative 
     repayment plan, including loan consolidation or refinancing; 
     and
       ``(II) if the borrower is eligible for servicemember or 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) or other Federal or State law 
     related to postsecondary education loans;

       ``(ii) provide the borrower, in writing, in simple and 
     understandable terms, information about alternative repayment 
     plans and benefits for which the borrower is eligible, 
     including all terms, conditions, and fees or costs associated 
     with such repayment plan, pursuant to paragraph (8)(D);
       ``(iii) allow the borrower not less than 30 days to apply 
     for an alternative repayment plan or benefits, if eligible; 
     and
       ``(iv) notify the borrower that a Servicemember and 
     Veterans Liaison designated under paragraph (15)(I) is 
     available to answer inquiries about servicemember and veteran 
     benefits related to postsecondary education loans, including 
     the toll-free telephone number to contact the Liaison 
     pursuant to paragraph (15)(I).
       ``(B) Forbearance or deferment.--If a borrower notifies the 
     postsecondary educational lender that a long-term alternative 
     repayment plan is not appropriate, the postsecondary 
     educational lender may comply with this paragraph by 
     providing the borrower, in writing, in simple and 
     understandable terms, information about short-term options to 
     address an anticipated short-term difficulty in making 
     payments, such as forbearance or deferment options, including 
     all terms, conditions, and fees or costs associated with such 
     options pursuant to paragraph (8)(D).
       ``(C) Notification process.--
       ``(i) In general.--Each postsecondary educational lender 
     shall establish a process, in accordance subparagraph (A), 
     for a borrower to notify the lender that--

       ``(I) the borrower is having difficulty making payments on 
     a postsecondary education loan; and
       ``(II) a long-term alternative repayment plan is not 
     needed.

       ``(ii) Consumer financial protection bureau requirements.--
     The Director of the Bureau of Consumer Financial Protection, 
     in consultation with the Secretary of Education, shall 
     promulgate rules establishing minimum standards for 
     postsecondary educational lenders in carrying out the 
     requirements of this paragraph and a model form for borrowers 
     to notify postsecondary educational lenders of the 
     information under this paragraph.'';
       (vii) in paragraph (8), as redesignated by clause (v), by 
     adding at the end the following:
       ``(D) Model disclosure form for alternative repayment 
     plans, forbearance, and deferment options.--Not later than 2 
     years after the date of enactment of the Student

[[Page S1713]]

     Loan Borrower Bill of Rights, the Director of the Bureau of 
     Consumer Financial Protection, in consultation with the 
     Secretary of Education, shall develop and issue model forms 
     to allow borrowers to compare alternative repayment plans, 
     forbearance, and deferment options with the borrower's 
     existing repayment plan with respect to a postsecondary 
     education loan. Such forms shall include the following:
       ``(i) The total amount to be paid over the life of the 
     loan.
       ``(ii) The total amount in interest to be paid over the 
     life of the loan.
       ``(iii) The monthly payment amount.
       ``(iv) The expected pay-off date.
       ``(v) Related fees and costs.
       ``(vi) Eligibility requirements, and how the borrower can 
     apply for the alternative repayment plan, forbearance, or 
     deferment option.
       ``(vii) Any relevant consequences due to action or 
     inaction, such as default, including any actions that would 
     result in the loss of eligibility for alternative repayment 
     plans, forbearance, or deferment options.'';
       (viii) in paragraph (11), as redesignated by clause (v), by 
     striking ``paragraph (7)'' and inserting ``paragraph (10)'';
       (ix) by striking paragraph (13), as redesignated by clause 
     (v), and inserting the following:
       ``(13) Definitions.--In this subsection--
       ``(A) the terms `covered educational institution', `private 
     educational lender', and `private education loan' have the 
     same meanings as in section 140; and
       ``(B) the term `postsecondary education loan' means
       ``(i) a private education loan; or
       ``(ii) a loan made, insured, or guaranteed under part B, D, 
     or E of title IV of the Higher Education Act of 1965 (20 
     U.S.C. 1071 et seq., 1087a et seq., and 1087aa et seq.).'';
       (x) in paragraph (14), as redesignated by clause (v), by 
     striking ``paragraph (5)'' and inserting ``paragraph (8)''; 
     and
       (xi) by adding at the end the following:
       ``(15) Student loan borrower bill of rights.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Borrower.--The term `borrower' means the person to 
     whom a postsecondary education loan is extended.
       ``(ii) Charge off.--The term `charge off' means charge to 
     profit and loss, or subject to any similar action.
       ``(iii) Qualified written request.--

       ``(I) In general.--The term `qualified written request' 
     means a written correspondence of a borrower (other than 
     notice on a payment medium supplied by the student loan 
     servicer) transmitted by mail, facsimile, or electronically 
     through an email address or website designated by the student 
     loan servicer to receive communications from borrowers that--

       ``(aa) includes, or otherwise enables the student loan 
     servicer to identify, the name and account of the borrower; 
     and
       ``(bb) includes, to the extent applicable--
       ``(AA) sufficient detail regarding the information sought 
     by the borrower; or
       ``(BB) a statement of the reasons for the belief of the 
     borrower that there is an error regarding the account of the 
     borrower.

       ``(II) Correspondence delivered to other addresses.--

       ``(aa) In general.--A written correspondence of a borrower 
     is a qualified written request if the written correspondence 
     is transmitted to and received by a student loan servicer at 
     a mailing address, facsimile number, email address, or 
     website address other than the address or number designated 
     by that student loan servicer to receive communications from 
     borrowers but the written correspondence meets the 
     requirements under items (aa) and (bb) of subclause (I).
       ``(bb) Duty to transfer.--A student loan servicer shall, 
     within a reasonable period of time, transfer a written 
     correspondence of a borrower received by the student loan 
     servicer at a mailing address, facsimile number, email 
     address, or website address other than the address or number 
     designated by that student loan servicer to receive 
     communications from borrowers to the correct address or 
     appropriate office or other unit of the student loan 
     servicer.
       ``(cc) Date of receipt.--A written correspondence of a 
     borrower transferred in accordance with item (bb) shall be 
     deemed to be received by the student loan servicer on the 
     date on which the written correspondence is transferred to 
     the correct address or appropriate office or other unit of 
     the student loan servicer.
       ``(iv) Servicer.--The term `servicer' means the person 
     responsible for the servicing of a postsecondary education 
     loan, including any agent of such person or the person who 
     makes, owns, or holds a loan if such person also services the 
     loan.
       ``(v) Servicing.--The term `servicing' means--

       ``(I) receiving any scheduled periodic payments from a 
     borrower pursuant to the terms of a postsecondary education 
     loan;
       ``(II) making the payments of principal and interest and 
     such other payments with respect to the amounts received from 
     the borrower, as may be required pursuant to the terms of the 
     loan; and
       ``(III) performing other administrative services with 
     respect to the loan.

       ``(B) Sale, transfer, or assignment.--If the sale, other 
     transfer, assignment, or transfer of servicing obligations of 
     a postsecondary education loan results in a change in the 
     identity of the party to whom the borrower must send 
     subsequent payments or direct any communications concerning 
     the loan--
       ``(i) the transferor shall--

       ``(I) notify the borrower, in writing, in simple and 
     understandable terms, not fewer than 45 days before 
     transferring a legally enforceable right to receive payment 
     from the borrower on such loan, of--

       ``(aa) the sale or other transfer, assignment, or transfer 
     of servicing obligations;
       ``(bb) the identity of the transferee;
       ``(cc) the name and address of the party to whom subsequent 
     payments or communications must be sent;
       ``(dd) the telephone numbers and websites of both the 
     transferor and the transferee;
       ``(ee) the effective date of the sale, transfer, or 
     assignment;
       ``(ff) the date on which the transferor will stop accepting 
     payment; and
       ``(gg) the date on which the transferee will begin 
     accepting payment; and

       ``(II) forward any payment from a borrower with respect to 
     such postsecondary education loan to the transferee, 
     immediately upon receiving such payment, during the 60-day 
     period beginning on the date on which the transferor stops 
     accepting payment of such postsecondary education loan; and

       ``(ii) the transferee shall--

       ``(I) notify the borrower, in writing, in simple and 
     understandable terms, not fewer than 45 days before acquiring 
     a legally enforceable right to receive payment from the 
     borrower on such loan, of--

       ``(aa) the sale or other transfer, assignment, or transfer 
     of servicing obligations;
       ``(bb) the identity of the transferor:
       ``(cc) the name and address of the party to whom subsequent 
     payments or communications must be sent;
       ``(dd) the telephone numbers and websites of both the 
     transferor and the transferee;
       ``(ee) the effective date of the sale, transfer, 
     assignment, or transfer of servicing obligations;
       ``(ff) the date on which the transferor will stop accepting 
     payment; and
       ``(gg) the date on which the transferee will begin 
     accepting payment;

       ``(II) accept as on-time and may not impose any late fee or 
     finance charge for any payment from a borrower with respect 
     to such postsecondary education loan that is forwarded from 
     the transferor during the 60-day period beginning on the date 
     on which the transferor stops accepting payment, if the 
     transferor receives such payment on or before the applicable 
     due date, including any grace period;
       ``(III) provide borrowers a simple, online process for 
     transferring existing electronic fund transfer authority; and
       ``(IV) honor any promotion or benefit offered to the 
     borrower or advertised by the previous owner or transferor of 
     such postsecondary education loan.

       ``(C) Material change in mailing address or procedure for 
     handling payments.--If a servicer makes a change in the 
     mailing address, office, or procedures for handling payments 
     with respect to any postsecondary education loan, and such 
     change causes a delay in the crediting of the account of the 
     borrower made during the 60-day period following the date on 
     which such change took effect, the servicer may not impose 
     any late fee or finance charge for a late payment on such 
     postsecondary education loan.
       ``(D) Application of payments.--
       ``(i) In general.--Unless otherwise directed by the 
     borrower of a postsecondary education loan, upon receipt of a 
     payment, the servicer shall apply amounts first to the 
     interest and fees owed on the payment due date, and then to 
     the principal balance of the postsecondary education loan 
     bearing the highest annual percentage rate, and then to each 
     successive interest and fees and then principal balance 
     bearing the next highest annual percentage rate, until the 
     payment is exhausted. A borrower may instruct or expressly 
     authorize the servicer to apply payments in a different 
     manner.
       ``(ii) Application of excess amounts.--Unless otherwise 
     directed by the borrower of a postsecondary education loan, 
     upon receipt of a payment, the servicer shall apply amounts 
     in excess of the minimum payment amount first to the interest 
     and fees owed on the payment due date, and then to the 
     principal balance of the postsecondary education loan balance 
     bearing the highest annual percentage rate, and then to each 
     successive interest and fees and principal balance bearing 
     the next highest annual percentage rate, until the payment is 
     exhausted. A borrower may instruct or expressly authorize the 
     servicer to apply such excess payments in a different manner. 
     A borrower may also voluntarily increase the periodic payment 
     amount, including by increasing their recurring electronic 
     payment, with the right to return to their original 
     amortization schedule at any time. Servicers shall provide a 
     simple, online method to allow borrowers to make voluntary 
     one-time additional payments, voluntarily increase the amount 
     of their periodic payment, and return to their original 
     amortization schedule.
       ``(iii) Apply payment on date received.--Unless otherwise 
     directed by the borrower of a postsecondary education loan, a 
     servicer shall apply payments to a borrower's account on the 
     date the payment is received.
       ``(iv) Promulgation of rules.--The Director of the Bureau 
     of Consumer Financial Protection, in consultation with the 
     Secretary of Education, may promulgate rules for the 
     application of postsecondary education loan payments that--

[[Page S1714]]

       ``(I) implements the requirements in this section;
       ``(II) minimizes the amount of fees and interest incurred 
     by the borrower and the total loan amount paid by the 
     borrower;
       ``(III) minimizes delinquencies, assignments to collection, 
     and charge-offs;
       ``(IV) requires servicers to apply payments on the date 
     received; and
       ``(V) allows the borrower to instruct the servicer to apply 
     payments in a manner preferred by the borrower, including 
     excess payments.

       ``(v) Method that best benefits borrower.--In promulgating 
     the rules under clause (iv), the Director of the Bureau of 
     Consumer Financial Protection shall choose the application 
     method that best benefits the borrower and is compatible with 
     existing repayment options.
       ``(E) Late fees.--
       ``(i) In general.--A late fee may not be charged to a 
     borrower for a postsecondary education loan under any of the 
     following circumstances, either individually or in 
     combination:

       ``(I) On a per-loan basis when a borrower has multiple 
     postsecondary education loans in a billing group.
       ``(II) In an amount greater than 4 percent of the amount of 
     the payment past due.
       ``(III) Before the end of the 15-day period beginning on 
     the date the payment is due.
       ``(IV) More than once with respect to a single late 
     payment.
       ``(V) The borrower fails to make a singular, non-successive 
     regularly-scheduled payment on the postsecondary education 
     loan.

       ``(ii) Coordination with subsequent late fees.--No late fee 
     may be charged to a borrower for a postsecondary education 
     loan relating to an insufficient payment if the payment is 
     made on or before the due date of the payment, or within any 
     applicable grace period for the payment, if the insufficiency 
     is attributable only to a late fee relating to an earlier 
     payment, and the payment is otherwise a full payment for the 
     applicable period.
       ``(F) Rehabilitation of loans.--If a borrower of a private 
     education loan successfully and voluntarily makes 9 payments 
     within 20 days of the due date during 10 consecutive months 
     of amounts owed on the private education loan, or otherwise 
     brings the private education loan current after the loan is 
     charged-off, the loan shall be considered rehabilitated, and 
     the lender or servicer shall request that any consumer 
     reporting agency to which the charge-off was reported remove 
     the delinquency that led to the charge-off and the charge-off 
     from the borrower's credit history.
       ``(G) Borrower inquiries.--
       ``(i) Duty of student loan servicers to respond to borrower 
     inquiries.--

       ``(I) Notice of receipt of request.--If a borrower of a 
     postsecondary education loan submits a qualified written 
     request to the student loan servicer for information relating 
     to the student loan servicing of the postsecondary education 
     loan, the student loan servicer shall provide a written 
     response acknowledging receipt of the qualified written 
     request within 5 business days unless any action requested by 
     the borrower is taken within such period.
       ``(II) Action with respect to inquiry.--Not later than 30 
     business days after the receipt from a borrower of a 
     qualified written request under subclause (I) and, if 
     applicable, before taking any action with respect to the 
     qualified written request of the borrower, the student loan 
     servicer shall--

       ``(aa) make appropriate corrections in the account of the 
     borrower, including the crediting of any late fees, and 
     transmit to the borrower a written notification of such 
     correction (which shall include the name and toll-free or 
     collect-call telephone number of a representative of the 
     student loan servicer who can provide assistance to the 
     borrower);
       ``(bb) after conducting an investigation, provide the 
     borrower with a written explanation or clarification that 
     includes--
       ``(AA) to the extent applicable, a statement of the reasons 
     for which the student loan servicer believes the account of 
     the borrower is correct as determined by the student loan 
     servicer; and
       ``(BB) the name and toll-free or collect-call telephone 
     number of an individual employed by, or the office or 
     department of, the student loan servicer who can provide 
     assistance to the borrower; or
       ``(cc) after conducting an investigation, provide the 
     borrower with a written explanation or clarification that 
     includes--
       ``(AA) information requested by the borrower or explanation 
     of why the information requested is unavailable or cannot be 
     obtained by the student loan servicer; and
       ``(BB) the name and toll-free or collect-call telephone 
     number of an individual employed by, or the office or 
     department of, the student loan servicer who can provide 
     assistance to the borrower.

       ``(III) Limited extension of response time.--

       ``(aa) In general.--There may be 1 extension of the 30-day 
     period described in subclause (II) of not more than 15 days 
     if, before the end of such 30-day period, the student loan 
     servicer notifies the borrower of the extension and the 
     reasons for the delay in responding.
       ``(bb) Reports to bureau.--Each student loan servicer 
     shall, on an annual basis, report to the Bureau the aggregate 
     number of extensions sought by the student loan servicer 
     under item (aa).
       ``(ii) Protection of credit information.--During the 60-day 
     period beginning on the date on which a student loan servicer 
     receives a qualified written request from a borrower relating 
     to a dispute regarding payments by the borrower, a student 
     loan servicer may not provide negative credit information to 
     any consumer reporting agency (as defined in section 603 of 
     the Fair Credit Reporting Act (15 U.S.C. 1681a)) relating to 
     the subject of the qualified written request or to such 
     period, including any information relating to a late payment 
     or payment owed by the borrower on the borrower's 
     postsecondary education loan.
       ``(H) Single point of contact for certain borrowers.--A 
     student loan servicer shall designate an office or other unit 
     of the student loan servicer to act as a point of contact 
     regarding postsecondary education loans for--
       ``(i) a borrower who is not less than 60 days delinquent 
     under the postsecondary education loan;
       ``(ii) a borrower who seeks information regarding, seeks to 
     enter an agreement for, or seeks to resolve an issue under a 
     repayment option that requires subsequent submission of 
     supporting documentation; and
       ``(iii) a borrower who seeks to modify the terms of the 
     repayment of the postsecondary education loan because of 
     hardship.
       ``(I) Servicemembers, veterans, and postsecondary education 
     loans.--
       ``(i) Servicemember and veterans liaison.--Each servicer 
     shall designate an employee to act as the servicemember and 
     veterans liaison who is responsible for answering inquiries 
     from servicemembers and veterans, and is specially trained on 
     servicemember and veteran benefits under the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 501 et seq.) and other 
     Federal or State laws related to postsecondary education 
     loans.
       ``(ii) Toll-free telephone number.--Each servicer shall 
     maintain a toll-free telephone number that shall--

       ``(I) connect directly to the servicemember and veterans 
     liaison designated under clause (i); and
       ``(II) be made available on the primary internet website of 
     the servicer and on monthly billing statements.

       ``(iii) Prohibition on charge offs and default.--A lender 
     or servicer may not charge off or report a postsecondary 
     education loan as delinquent, assigned to collection 
     (internally or by referral to a third party), in default, or 
     charged-off to a credit reporting agency if the borrower is 
     on active duty in the Armed Forces (as defined in section 
     101(d)(1) of title 10, United States Code) serving in a 
     combat zone (as designated by the President under section 
     112(c) of the Internal Revenue Code of 1986).
       ``(iv) Additional liaisons.--The Secretary shall determine 
     additional entities with whom borrowers interact, including 
     guaranty agencies, that shall designate an employee to act as 
     the servicemember and veterans liaison who is responsible for 
     answering inquiries from servicemembers and veterans and is 
     specially trained on servicemembers and veteran benefits and 
     option under the Servicemembers Civil Relief Act (50 U.S.C. 
     App. 501 et seq.).
       ``(J) Borrower's loan history.--
       ``(i) In general.--A servicer shall make available through 
     a secure website, or in writing upon request, the loan 
     history of each borrower for each postsecondary education 
     loan, separately designating--

       ``(I) payment history;
       ``(II) loan history, including any forbearances, deferrals, 
     delinquencies, assignment to collection, and charge offs;
       ``(III) annual percentage rate history; and
       ``(IV) key loan terms, including application of payments to 
     interest, principal, and fees, origination date, principal, 
     capitalized interest, annual percentage rate, including any 
     cap, loan term, and any contractual incentives.

       ``(ii) Original documentation.--A servicer shall make 
     available to the borrower, if requested, at no charge, copies 
     of the original loan documents and the promissory note for 
     each postsecondary education loan.
       ``(K) Error resolution.--The Director of the Bureau of 
     Consumer Financial Protection, in consultation with the 
     Secretary of Education, shall promulgate rules requiring 
     servicers to establish error resolution procedures to allow 
     borrowers to inquire about errors related to their 
     postsecondary education loans and obtain timely resolution of 
     such errors.
       ``(L) Additional servicing standards.--The Director of the 
     Bureau of Consumer Financial Protection, in consultation with 
     the Secretary of Education, may establish additional 
     servicing standards to reduce delinquencies, assignment to 
     collections, defaults, and charge-offs, and to ensure 
     borrowers understand their rights and obligations related to 
     their postsecondary education loans.
       ``(M) Arbitration.--
       ``(i) Waiver of rights and remedies.--Any rights and 
     remedies available to borrowers against servicers may not be 
     waived by any agreement, policy, or form, including by a 
     predispute arbitration agreement.
       ``(ii) Predispute arbitration agreements.--No predispute 
     arbitration agreement shall be valid or enforceable by a 
     servicer, including as a third-party beneficiary or by 
     estoppel, if the agreement requires arbitration of a dispute 
     with respect to a postsecondary education loan. This 
     subparagraph applies to predispute arbitration agreements 
     entered into before the date of

[[Page S1715]]

     enactment of the Student Loan Borrower Bill of Rights, as 
     well as on and after such date of enactment, if the violation 
     that is the subject of the dispute occurred on or after such 
     date of enactment.
       ``(N) Enforcement.--The provisions of this paragraph shall 
     be enforced by the agencies specified in subsections (a) 
     through (d) of section 108, in the manner set forth in that 
     section or under any other applicable authorities available 
     to such agencies by law.
       ``(O) Preemption.--Nothing in this paragraph may be 
     construed to preempt any provision of State law regarding 
     postsecondary education loans where the State law provides 
     stronger consumer protections.
       ``(P) Civil liability.--A servicer that fails to comply 
     with any requirement imposed under this paragraph shall be 
     deemed a creditor that has failed to comply with a 
     requirement under this chapter for purposes of liability 
     under section 130 and such servicer shall be subject to the 
     liability provisions under such section, including the 
     provisions under paragraphs (1), (2)(A)(i), (2)(B), and (3) 
     of section 130(a).
       ``(Q) Eligibility for discharge.--The Director of the 
     Bureau of Consumer Financial Protection, in consultation with 
     the Secretary of Education, shall promulgate rules requiring 
     lenders and servicers of loans described in paragraph 
     (13)(B)(ii) to--
       ``(i) identify and contact borrowers who may be eligible 
     for student loan discharge by the Secretary;
       ``(ii) provide the borrower, in writing, in simple and 
     understandable terms, information about obtaining such 
     discharge; and
       ``(iii) create a streamlined process for eligible borrowers 
     to apply for and receive such discharge.''; and
       (B) by adding at the end the following:
       ``(g) Information To Be Available at No Charge.--The 
     information required to be disclosed under this section shall 
     be made available at no charge to the borrower.''; and
       (2) in section 130(a)--
       (A) in paragraph (3), by striking ``128(e)(7)'' and 
     inserting ``128(e)(10)''; and
       (B) in the flush matter at the end, by striking ``or 
     paragraph (4)(C), (6), (7), or (8) of section 128(e),'' and 
     inserting ``or paragraph (4)(C), (9), (10), or (11) of 
     section 128(e),''.

     SEC. 3. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

       Section 433 of the Higher Education Act of 1965 (20 U.S.C. 
     1083) is amended--
       (1) in subsection (b)--
       (A) in paragraph (12), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (13), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(14) a statement that--
       ``(A) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(B) a Servicemember and Veterans Liaison designated under 
     section 128(e)(15)(I)(i) of the Truth in Lending Act (15 
     U.S.C. 1638(e)(15)(I)(i)) is available to answer inquiries 
     about servicemember and veteran benefits, including the toll-
     free telephone number to contact the Liaison pursuant to such 
     section.''; and
       (2) in subsection (e)--
       (A) in paragraph (2), by adding at the end the following:
       ``(D) A statement that--
       ``(i) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(ii) a Servicemember and Veterans Liaison designated 
     under section 128(e)(15)(I)(i) of the Truth in Lending Act 
     (15 U.S.C. 1638(e)(15)(I)(i)) is available to answer 
     inquiries about servicemember and veteran benefits, including 
     the toll-free telephone number to contact the Liaison 
     pursuant to such section.''; and
       (B) in paragraph (3), by adding at the end the following:
       ``(F) A statement that--
       ``(i) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(ii) a Servicemember and Veterans Liaison designated 
     under section 128(e)(15)(I)(i) of the Truth in Lending Act 
     (15 U.S.C. 1638(e)(15)(I)(i)) is available to answer 
     inquiries about servicemember and veteran benefits, including 
     the toll-free telephone number to contact the Liaison 
     pursuant to such section.''.

     SEC. 4. KNOW BEFORE YOU OWE.

       (a) Amendments to the Truth in Lending Act.--
       (1) In general.--Section 128(e) of the Truth in Lending Act 
     (15 U.S.C. 1638(e)), as amended by section 2, is further 
     amended--
       (A) by striking paragraph (3) and inserting the following:
       ``(3) Institutional certification required.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     before a creditor may issue any funds with respect to an 
     extension of credit described in this subsection, the 
     creditor shall obtain from the relevant institution of higher 
     education where such loan is to be used for a student, such 
     institution's certification of--
       ``(i) the enrollment status of the student;
       ``(ii) the student's cost of attendance at the institution 
     as determined by the institution under part F of title IV of 
     the Higher Education Act of 1965; and
       ``(iii) the difference between--

       ``(I) such cost of attendance; and
       ``(II) the student's estimated financial assistance, 
     including such assistance received under title IV of the 
     Higher Education Act of 1965 and other financial assistance 
     known to the institution, as applicable.

       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     creditor may issue funds, not to exceed the amount described 
     in subparagraph (A)(iii), with respect to an extension of 
     credit described in this subsection without obtaining from 
     the relevant institution of higher education such 
     institution's certification if such institution fails to 
     provide within 15 business days of the creditor's request for 
     such certification--
       ``(i) notification of the institution's refusal to certify 
     the request; or
       ``(ii) notification that the institution has received the 
     request for certification and will need additional time to 
     comply with the certification request.
       ``(C) Loans disbursed without certification.--If a creditor 
     issues funds without obtaining a certification, as described 
     in subparagraph (B), such creditor shall report the issuance 
     of such funds in a manner determined by the Director of the 
     Bureau of Consumer Financial Protection.''; and
       (B) by adding at the end the following:
       ``(16) Provision of information.--
       ``(A) Provision of information to students.--
       ``(i) Loan statement.--A creditor that issues any funds 
     with respect to an extension of credit described in this 
     subsection shall send loan statements, where such loan is to 
     be used for a student, to borrowers of such funds not less 
     than once every 3 months during the time that such student is 
     enrolled at an institution of higher education.
       ``(ii) Contents of loan statement.--Each statement 
     described in clause (i) shall--

       ``(I) report the borrower's total remaining debt to the 
     creditor, including accrued but unpaid interest and 
     capitalized interest;
       ``(II) report any debt increases since the last statement; 
     and
       ``(III) list the current interest rate for each loan.

       ``(B) Notification of loans disbursed without 
     certification.--On or before the date a creditor issues any 
     funds with respect to an extension of credit described in 
     this subsection, the creditor shall notify the relevant 
     institution of higher education, in writing, of the amount of 
     the extension of credit and the student on whose behalf 
     credit is extended. The form of such written notification 
     shall be subject to the regulations of the Bureau of Consumer 
     Financial Protection.
       ``(C) Annual report.--A creditor that issues funds with 
     respect to an extension of credit described in this 
     subsection shall prepare and submit an annual report to the 
     Bureau of Consumer Financial Protection containing the 
     required information about private student loans to be 
     determined by the Bureau of Consumer Financial Protection, in 
     consultation with the Secretary of Education.''.
       (2) Definition of private education loan.--Section 
     140(a)(7)(A) of the Truth in Lending Act (15 U.S.C. 
     1650(a)(7)(A)) is amended--
       (A) by redesignating clause (ii) as clause (iii);
       (B) in clause (i), by striking ``and'' after the semicolon; 
     and
       (C) by adding after clause (i) the following:
       ``(ii) is not made, insured, or guaranteed under title VII 
     or title VIII of the Public Health Service Act (42 U.S.C. 292 
     et seq. and 296 et seq.); and''.
       (3) Regulations.--Not later than 365 days after the date of 
     enactment of this Act, the Director of the Bureau of Consumer 
     Financial Protection shall issue regulations in final form to 
     implement paragraphs (3) and (16) of section 128(e) of the 
     Truth in Lending Act (15 U.S.C. 1638(e)), as amended by 
     paragraph (1). Such regulations shall become effective not 
     later than 6 months after their date of issuance.
       (b) Amendments to the Higher Education Act of 1965.--
       (1) Program participation agreements.--Section 487(a) of 
     the Higher Education Act of 1965 (20 U.S.C. 1094(a)) is 
     amended by striking paragraph (28) and inserting the 
     following:
       ``(28)(A) 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 128(e)(3) of the Truth in Lending Act (15 U.S.C. 
     1638(e)(3)), the institution shall within 15 days of receipt 
     of a certification request--
       ``(i) provide such certification to such private 
     educational lender--
       ``(I) that the student 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;
       ``(II) of such student's cost of attendance at the 
     institution as determined under part F of this title; and
       ``(III) of the difference between--

       ``(aa) the cost of attendance at the institution; and
       ``(bb) the student's estimated financial assistance 
     received under this title and other assistance known to the 
     institution, as applicable;

       ``(ii) notify the creditor that the institution has 
     received the request for certification and will need 
     additional time to comply with the certification request; or

[[Page S1716]]

       ``(iii) provide notice to the private educational lender of 
     the institution's refusal to certify the private education 
     loan under subparagraph (D).
       ``(B) With respect to a certification request described in 
     subparagraph (A), and prior to providing such certification 
     under subparagraph (A)(i) or providing notice of the refusal 
     to provide certification under subparagraph (A)(iii), the 
     institution shall--
       ``(i) determine whether the student 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 
     student under this title and inform the student accordingly; 
     and
       ``(ii) provide the borrower whose loan application has 
     prompted the certification request by a private education 
     lender, as described in subparagraph (A)(i), with the 
     following information and disclosures:
       ``(I) The availability of, and the borrower's potential 
     eligibility for, Federal financial assistance under this 
     title, including disclosing the terms, conditions, interest 
     rates, and repayment options and programs of Federal student 
     loans.
       ``(II) The borrower's ability to select a private 
     educational lender of the borrower's choice.
       ``(III) The impact of a proposed private education loan on 
     the borrower's potential eligibility for other financial 
     assistance, including Federal financial assistance under this 
     title.
       ``(IV) 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 
     about a borrower's 3-day right to cancel period.
       ``(C) For purposes of this paragraph, the terms `private 
     educational lender' and `private education loan' have the 
     meanings given such terms in section 140 of the Truth in 
     Lending Act (15 U.S.C. 1650).
       ``(D)(i) An institution shall not provide a certification 
     with respect to a private education loan under this paragraph 
     unless the private education loan includes terms that 
     provide--
       ``(I) the borrower alternative repayment plans, including 
     loan consolidation or refinancing; and
       ``(II) that the liability to repay the loan shall be 
     cancelled upon the death or disability of the borrower or co-
     borrower.
       ``(ii) In this paragraph, the term `disability' means a 
     permanent and total disability, as determined in accordance 
     with the regulations of the Secretary of Education, or a 
     determination by the Secretary of Veterans Affairs that the 
     borrower is unemployable due to a service connected-
     disability.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the effective date of the regulations 
     described in subsection (a)(3).
       (3) Preferred lender arrangement.--Section 151(8)(A)(ii) of 
     the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii)) 
     is amended by inserting ``certifying,'' after ``promoting,''.
       (c) Report.--Not later than 24 months after the issuance of 
     regulations under subsection (a)(3), the Director of the 
     Bureau of Consumer Financial Protection and the Secretary of 
     Education shall jointly submit to Congress a report on the 
     compliance of institutions of higher education and private 
     educational lenders with section 128(e)(3) of the Truth in 
     Lending Act (15 U.S.C. 1638(e)), as amended by subsection 
     (a), and section 487(a)(28) of the Higher Education Act of 
     1965 (20 U.S.C. 1094(a)), as amended by subsection (b). Such 
     report shall include information about the degree to which 
     specific institutions utilize certifications in effectively 
     encouraging the exhaustion of Federal student loan 
     eligibility and lowering student private education loan debt.

     SEC. 5. MARKETING LIMITATION.

       Section 456 of the Higher Education Act of 1965 (20 U.S.C. 
     1087f) is amended by adding at the end the following:
       ``(c) Limitation on Contracts for the Servicing of Loans.--
     A servicer may not market to the borrower of a student loan 
     made, insured, or guaranteed under this title which the 
     servicer services, a financial product or service using data 
     obtained through the servicing relationship, or otherwise 
     during the servicing process.''.

     SEC. 6. SERVICER CHOICE.

       Section 456 of the Higher Education Act of 1965 (20 U.S.C. 
     1087f), as amended by section 5, is further amended by adding 
     at the end the following:
       ``(d) Switching Servicers.--The Secretary shall establish a 
     program that allows a borrower of a loan made under this part 
     after the date of enactment of the Student Loan Borrower Bill 
     of Rights to switch from the assigned servicer of such loan 
     to a new servicer based on a random reassignment by the 
     Secretary.''.

     SEC. 7. CENTRALIZED POINT OF ACCESS.

       Part G of title IV of the Higher Education Act of 1965 (20 
     U.S.C. 1088 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 493E. CENTRALIZED POINT OF ACCESS.

       ``Not later than 2 years after the date of enactment of the 
     Student Loan Borrower Bill of Rights, the Secretary shall 
     establish a centralized point of access for all borrowers of 
     loans that are made, insured, or guaranteed under this title 
     that are in repayment, including a central location for 
     account information and payment processing for such loan 
     servicing, regardless of the specific servicer.''.

     SEC. 8. REPORT ON STUDENT LOAN SERVICERS.

       Not later than 1 year after the date of enactment of this 
     Act, the Director of the Bureau of Consumer Financial 
     Protection, in consultation with the Secretary of Education, 
     shall submit a report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate, the Committee on Health, 
     Education, Labor, and Pensions of the Senate, the Committee 
     on Financial Services of the House of Representatives, and 
     the Committee on Education and the Workforce of the House of 
     Representatives on private and Federal student loan 
     servicers, including--
       (1) any legislative recommendations to improve student loan 
     servicing standards; and
       (2) information on proactive early intervention methods by 
     servicers to help distressed student loan borrowers enroll in 
     any eligible repayment plans.
                                 ______