[Congressional Record Volume 169, Number 200 (Tuesday, December 5, 2023)]
[Senate]
[Pages S5751-S5761]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. DURBIN (for himself, Ms. Klobuchar, Mr. Reed, Ms. Smith,
Mr. Welch, Ms. Duckworth, and Ms. Warren):
S. 3404. 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. Madam 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. 3404
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. HIGHER EDUCATION ACT OF 1965 AMENDMENTS.
(a) 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
[[Page S5752]]
(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. 3901 et seq.) and other Federal or State laws; and
``(B) a Servicemember and Veterans Liaison designated under
section 128(e)(16)(K)(i) of the Truth in Lending Act (15
U.S.C. 1638(e)(16)(K)(i)) is available to answer inquiries
about servicemember and veteran benefits, including the toll-
free telephone number and email address 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. 3901 et seq.) and other Federal or State laws; and
``(ii) a Servicemember and Veterans Liaison designated
under section 128(e)(16)(K)(i) of the Truth in Lending Act
(15 U.S.C. 1638(e)(16)(K)(i)) is available to answer
inquiries about servicemember and veteran benefits, including
the toll-free telephone number and email address to contact
the Liaison pursuant to such section.
``(E) A statement that a repayment specialist office or
unit designated under section 128(e)(16)(J)(i) of the Truth
in Lending Act (15 U.S.C. 1638(e)(16)(J)(i)) is available to
answer inquiries related to alternative repayment options,
including the toll-free telephone number and email address to
contact the specialist pursuant to section 128(e)(16)(J)(iii)
of such Act.''; 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. 3901 et seq.) and other Federal or State laws; and
``(ii) a Servicemember and Veterans Liaison designated
under section 128(e)(16)(K)(i) of the Truth in Lending Act
(15 U.S.C. 1638(e)(16)(K)(i)) is available to answer
inquiries about servicemember and veteran benefits, including
the toll-free telephone number and email address to contact
the Liaison pursuant to such section.
``(G) A statement that a repayment specialist office or
unit designated under section 128(e)(16)(J)(i) of the Truth
in Lending Act (15 U.S.C. 1638(e)(16)(J)(i)) is available to
answer inquiries related to alternative repayment options,
including the toll-free telephone number and email address to
contact the specialist pursuant to section 128(e)(16)(J)(iii)
of such Act.''.
(b) Terms and Conditions of Loans.--Section 455 of the
Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by
adding at the end the following:
``(r) Prepayment, Payment Application, and Payment
Allocation.--
``(1) In general.--A borrower may prepay all or part of a
loan made under this part at any time without penalty.
``(2) Prepayment.--
``(A) In general.--If a borrower pays any amount in excess
of the amount due for a loan made under this part, the excess
amount shall be a prepayment.
``(B) Application of prepayment.--If a borrower makes a
prepayment, the Secretary shall--
``(i) apply the prepaid amount according to the terms of
the promissory note signed by the borrower;
``(ii) upon request of the borrower, apply the prepaid
amount to the outstanding loan principal; or
``(iii) upon request of the borrower, advance the due date
of the next payment and notify the borrower of any revised
due date for the next payment.
``(3) Payment allocation.--If a borrower has more than 1
loan made under this part, the Secretary shall allocate any
prepayment or other partial payment in the same manner as
amounts are allocated under section 128(e)(16)(G)(i) of the
Truth in Lending Act (15 U.S.C. 1638(e)(16)(G)(i)).''.
(c) Contracts.--Section 456 of the Higher Education Act of
1965 (20 U.S.C. 1087f) is amended--
(1) in subsection (a), by striking paragraph (3) and
inserting the following:
``(3) Rules of construction.--
``(A) Consortia.--Nothing in this section shall be
construed as a limitation of the authority of any State
agency to enter into an agreement for the purposes of this
section as a member of a consortium of State agencies.
``(B) Compliance with state and federal laws.--Nothing in
this section shall be construed as altering, limiting, or
affecting any obligation by an entity with which the
Secretary enters into a contract under this section to comply
with any applicable Federal or State law, including any
Federal consumer financial law, as defined in section
1002(14) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5481(14)).
``(C) Authorities.--Nothing in this section shall be
construed as altering, limiting, or affecting the authority
of a State attorney general or any other State regulatory or
enforcement agency or authority to bring an action or other
regulatory proceeding arising solely under the law of such
State.''; and
(2) by adding at the end the following:
``(c) Applicability of Provisions Under the Consumer
Financial Protection Act of 2010.--
``(1) Consumer financial product or service.--A consumer
financial product or service offered by an entity with which
the Secretary enters into a contract under this section for
origination, servicing, or collection described in subsection
(b), as part of such contract, shall have the meaning given
the term in section 1002 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5481).
``(2) Covered person.--Any entity with which the Secretary
enters into a contract under this section for origination,
servicing, or collection described in subsection (b) shall be
considered a `covered person' (as defined in section 1002 of
the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)) and subject to the provisions of the Consumer
Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.).
``(3) Postsecondary educational lender or servicer.--Any
entity with which the Secretary enters into a contract under
this section for origination, servicing, or collection, as
described in subsection (b), and is engaged in the provision
of, or offering, servicing shall be considered a
`postsecondary educational lender or servicer' (as defined in
section 128(e) of the Truth in Lending Act (15 U.S.C.
1638(e)), and subject to the provisions of section 128(e) of
the Truth in Lending Act (12 U.S.C. 1638(e)).
``(d) Complaints From Student Loan Borrowers.--In awarding
any contract under this section for origination, servicing,
or collection described in subsection (b), the Secretary
shall require, as part of such contract, any entity receiving
such an award--
``(1) to respond to consumer complaints submitted to any
Federal, State, or local agency that accepts complaints from
student loan borrowers, including the Bureau of Consumer
Financial Protection, by borrowers who owe loans made under
this part; and
``(2) to share information about consumer complaints with
the Secretary, the Bureau of Consumer Financial Protection,
the Federal Trade Commission, the Department of Veterans
Affairs, any State attorney general, or any other Federal or
State regulatory or enforcement agency that compiles
information about such complaints.
``(e) Limitations on Contracts.--Any entity with which the
Secretary enters into a contract under this section shall be
prohibited, as part of such contract, from marketing to the
borrower of a loan made, insured, or guaranteed under this
title a financial product or service--
``(1) using data obtained as a result of the contract or
the relationship with the borrower stemming from the
contract;
``(2) during any outreach or contact with the borrower
resulting from the contract or the relationship with the
borrower stemming from the contract; or
``(3) on any platform or through any method resulting from
the contract or the relationship with the borrower stemming
from the contract.
``(f) Student Loan Servicing Interagency Working Group.--
``(1) In general.--Not later than 30 days after the date of
enactment of the Student Loan Borrower Bill of Rights, the
Secretary shall establish a student loan servicing
interagency working group co-chaired by the Secretary and the
Director of the Bureau of Consumer Financial Protection and
including the Chief Operating Officer of the Office of
Federal Student Aid, the Director of the Office of Management
and Budget, the Secretary of the Treasury, and the heads of
any other relevant Federal departments or agencies.
``(2) Advisory report on rulemaking.--
``(A) In general.--Not later than 120 days after the date
the working group under paragraph (1) is established, the
working group shall publish an advisory report making
recommendations to the Director of the Bureau of Consumer
Financial Protection related to the promulgation of
regulations under section 128(e)(17)(A) of the Truth in
Lending Act (15 U.S.C. 1638(e)(17)(A)) with respect to
entities with which the Secretary has entered into a contract
under this section.
``(B) Public feedback.--Following the publication of the
advisory report required under subparagraph (A), the
Secretary shall accept, for not less than 60 days, from the
public specific feedback on the recommendations included in
the report.
``(3) Publication of final recommendations.--Not later than
30 days following the conclusion of the public feedback
process described in paragraph (2)(B), the Secretary shall
publish final recommendations for the Director of the Bureau
of Consumer Financial Protection related to the promulgation
of regulations under section 128(e)(17)(A) of the Truth in
Lending Act (15 U.S.C. 1638(e)(17)(A)).
``(4) Policy direction to federal student aid.--The working
group shall develop policy direction for the Office of
Federal Student Aid to incorporate, into contracts awarded
under this section, applicable requirements and standards
promulgated under section 128(e)(17)(A) of the Truth in
Lending Act (15 U.S.C. 1638(e)(17)(A)) or described in
section 128(e)(17)(B)(i)(II) of such Act.
``(5) Meetings.--After the Secretary publishes final
recommendations under paragraph (3), the working group shall
meet not less often than once per year including to--
``(A) evaluate the application of regulations promulgated
under section 128(e)(17)(A) of the Truth in Lending Act (15
U.S.C.
[[Page S5753]]
1638(e)(17)(A)) on entities with which the Secretary has
entered into a contract under this section;
``(B) evaluate the Office of Federal Student Aid's
implementation of policy direction developed pursuant to
paragraph (4);
``(C) develop and implement an oversight plan to ensure
compliance by entities with which the Secretary has entered
into a contract under this section with policy direction
developed under paragraph (4) and regulations promulgated
under section 128(e)(17)(A) of the Truth in Lending Act (15
U.S.C. 1638(e)(17)(A)) or described in section
128(e)(17)(B)(i)(II) of such Act; and
``(D) undertake other activities to improve coordination
among the members of the working group as it relates to the
Secretary's administration of loans made, insured, or
guaranteed under this title.
``(6) Investigations.--In order to carry out its duties
under this subsection, the working group may engage in
investigations of entities with which the Secretary has
entered into a contract under this section.
``(7) Rule of construction.--Nothing in this subsection
shall be considered to alter, limit, or restrict the Bureau
of Consumer Financial Protection's obligations under chapter
5 of title 5, United States Code (commonly known as the
`Administrative Procedures Act'), including the Director's
obligation to provide notice, solicit public comment, and
respond to such comment when issuing regulations.''.
(d) Removal of Record of Default.--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. 494. REMOVAL OF RECORD OF DEFAULT.
``Upon repaying in full the amount due on a defaulted loan
made, insured, or guaranteed under this title, the Secretary,
guaranty agency, or other holder of the loan shall request
any consumer reporting agency to which the Secretary,
guaranty agency, or holder, as applicable, reported the
default of the loan, to remove any adverse item of
information relating to such loan from the borrower's credit
history.''.
(e) Removal of Record of Default From Credit History.--
Section 455(g) of the Higher Education Act of 1965 (20 U.S.C.
1087e(g)) is amended by adding at the end the following:
``(3) Consumer reporting agencies.--Upon obtaining a
Federal Direct Consolidation Loan that discharges the
liability on a defaulted loan made, insured, or guaranteed
under this title, the Secretary, guaranty agency, or other
holder of the loan shall request any consumer reporting
agency to which the Secretary, guaranty agency or holder, as
applicable, reported the default of the loan, to remove any
adverse item of information relating to such loan from the
borrower's credit history.''.
(f) Default Reduction Program.--Section 428F(a)(1)(C) of
the Higher Education Act of 1965 (20 U.S.C. 1078-6(a)(1)(C))
is amended by striking ``to remove the record of the default
from the borrower's credit history'' and inserting ``to
remove any adverse item of information relating to such loan
from the borrower's credit history''.
SEC. 3. TRUTH IN LENDING ACT AMENDMENTS.
(a) In General.--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 (10)'';
(iii) in paragraph (2)(L), by striking ``paragraph (6)''
and inserting ``paragraph (10)'';
(iv) in paragraph (4)(C), by striking ``paragraph (7)'' and
inserting ``paragraph (11)'';
(v) by redesignating paragraphs (5) through (11) as
paragraphs (9) through (15), 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 or servicer 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 postsecondary educational lender and
servicer, and the address to which communications and
payments should be sent including a telephone number, email
address, and website where the borrower may obtain additional
information;
``(D) a description of all alternative repayment options,
including applicable repayment plans and options for loan
consolidation, loan forgiveness, and loan repayment; and
``(E) a statement that a Servicemember and Veterans Liaison
designated under paragraph (16)(K) is available to answer
inquiries about servicemember and veteran benefits related to
postsecondary education loans, including the toll-free
telephone number and email address to contact the Liaison
pursuant to paragraph (16)(K).
``(6) Disclosures when borrower is at-risk.--
``(A) In general.--Not more than 5 days after a
postsecondary educational lender or servicer determines that
a borrower meets the criteria established in paragraph
(16)(J)(i), the postsecondary educational lender or servicer
shall--
``(i) disclose to the borrower, in writing, clearly and
conspicuously that a repayment specialist office or unit is
available to discuss alternative repayment options and answer
borrower inquiries related to their postsecondary educational
loan, including the toll-free number to contact the office or
unit pursuant to paragraph (16)(J)(iii); and
``(ii) inform the borrower, in writing, of the existence of
discharge programs, the criteria required to qualify for
discharge under each of such programs, and how to apply.
``(B) Outreach to at-risk borrowers.--The Director, in
accordance with paragraph (17)(A), shall promulgate rules to
establish a timeline for additional live outreach by the
repayment specialist office or unit to at-risk borrowers.
``(7) Actions when borrower is 30 days delinquent.--
``(A) In general.--Not more than 5 days after a borrower
becomes 30 days delinquent on a postsecondary education loan,
the repayment specialist office or unit designated under
paragraph (16)(J) shall--
``(i) make a good faith effort to establish live contact
with the borrower to discuss alternative repayment options
and other options available to avoid default; and
``(ii) disclose to the borrower, in writing, clearly and
conspicuously--
``(I) of the availability of income-driven repayment plans
under sections 455 and 493C of the Higher Education Act of
1965 (20 U.S.C. 1087e and 1098e) and the public service loan
forgiveness program under section 455(m) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(m)) and how to apply;
``(II) the minimum payment that the borrower must make to
bring the loan current;
``(III) a statement, related to potential charge off (as
defined in paragraph (16)(A)) or assignment to collections as
appropriate, to include--
``(aa) the date on which the loan will be charged-off or
assigned to collections if no payment is made or the minimum
payment required to be disclosed pursuant to item (bb) is not
made;
``(bb) the minimum payment that must be made to avoid the
loan being charged off or assigned to collection; and
``(cc) the consequences to the borrower of charge off or
assignment to collections;
``(IV) a statement that a Servicemember and Veterans
Liaison designated under paragraph (16)(K) is available to
answer inquiries about servicemember and veteran benefits
related to postsecondary education loans, including the toll-
free telephone number and email address to contact the
Liaison pursuant to paragraph (16)(K); and
``(V) a statement that a repayment specialist office or
unit designated under paragraph (16)(J) is available to
answer inquiries related to alternative repayment options,
including the toll-free telephone number and email address to
contact the specialist pursuant to paragraph (16)(J)(iii).
``(B) Modifications.--The disclosures described in
subparagraph (A)(ii) may be modified subject to regulations
promulgated by the Director, based on consumer testing and in
accordance with paragraph (17)(A).
``(8) Actions when borrower is having difficulty making
payment or is 60 days delinquent.--
``(A) In general.--Not more than 5 days after a borrower
notifies a postsecondary educational lender or servicer that
the borrower is having difficulty making payment or a
borrower becomes 60 days delinquent on a postsecondary
education loan, the repayment specialist office or unit
designated under paragraph (16)(J) 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 any alternative
repayment option, including Federal Direct Consolidation
Loans under part D of title IV of the Higher Education Act of
1965 (20 U.S.C. 1087a et seq.), as applicable, or the public
service loan forgiveness program under section 455(m) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(m));
``(II) if the borrower is eligible for servicemember or
veteran benefits under the Servicemembers Civil Relief Act
(50 U.S.C. 3901 et seq.) or other Federal or State law
related to postsecondary education loans; and
``(III) if the postsecondary education loan, if 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.), is eligible for
discharge by the Secretary;
``(ii) make a good faith effort to establish live contact
with the borrower to provide the borrower information about
alternative repayment options and benefits for which the
borrower is eligible, including all terms, conditions, and
fees or costs associated with such repayment plan, pursuant
to paragraph (9)(D);
``(iii) provide to the borrower in writing, in simple and
understandable terms, such information required by clause
(ii);
[[Page S5754]]
``(iv) allow the borrower a reasonable amount of time to
apply for an alternative repayment option or benefits, if
eligible, before the loan is placed in default;
``(v) notify the borrower that a Servicemember and Veterans
Liaison designated under paragraph (16)(K) is available to
answer inquiries about servicemember and veteran benefits
related to postsecondary education loans, including the toll-
free telephone number and email address to contact the
Liaison pursuant to paragraph (16)(K); and
``(vi) notify the borrower that a repayment specialist
office or unit designated under paragraph (16)(J) is
available to answer inquiries related to alternative
repayment options, including the toll-free telephone number
and email address to contact the specialist pursuant to
paragraph (16)(J)(iii).
``(B) Forbearance or deferment.--If, after receiving
information about alternative repayment options from the
repayment specialist, a borrower notifies the postsecondary
educational lender or servicer that a long-term alternative
repayment option is not appropriate, the postsecondary
educational lender or servicer 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 (9)(D).
``(C) Notification process.--
``(i) In general.--Each postsecondary educational lender or
servicer shall establish a process, in accordance with
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 option is not
appropriate.
``(ii) Consumer financial protection bureau requirements.--
The Director shall, based on consumer testing, and in
accordance with paragraph (17)(A), promulgate rules
establishing minimum standards for postsecondary educational
lender or servicers in carrying out the requirements of this
paragraph and a model form for borrowers to notify
postsecondary educational lender or servicers of the
information under this paragraph.'';
(vii) in paragraph (9), as redesignated by clause (v), by
adding at the end the following:
``(D) Model disclosure form for alternative repayment
options, forbearance, and deferment options.--Not later than
2 years after the date of enactment of the Student Loan
Borrower Bill of Rights, the Director shall, based on
consumer testing and through regulations promulgated in
accordance with paragraph (17)(A), develop and issue model
forms to allow borrowers to compare alternative repayment
options, forbearance, and deferment options with the
borrower's existing repayment plan with respect to a
postsecondary education loan. In developing such forms, the
Director shall consider and evaluate the following for
inclusion:
``(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) Other related fees and costs, as applicable.
``(vi) Eligibility requirements, and how the borrower can
apply for an alternative repayment option, 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
options, forbearance, deferment, or discharge options.'';
(viii) in paragraph (12), as redesignated by clause (v), by
striking ``paragraph (7)'' and inserting ``paragraph (11)'';
(ix) by striking paragraph (14), as redesignated by clause
(v), and inserting the following:
``(14) 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;
``(B) the term `postsecondary education loan' means--
``(i) a private education loan;
``(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.); or
``(iii) a loan 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.);
``(C) the term `postsecondary educational lender or
servicer' means--
``(i) an eligible lender of a loan made, insured, or
guaranteed under part B of the Higher Education Act of 1965
(20 U.S.C. 1071 et seq.);
``(ii) any entity with which the Secretary enters into a
contract under section 456 of the Higher Education Act of
1965 (20 U.S.C. 1087f) for origination, servicing, or
collection described in subsection (b) of such section 456
and is engaged in the provision of, or offering, servicing,
as defined in paragraph (16)(A)(iv), or collections
regardless of whether the Secretary identifies the entity as
a `servicer' in such contract;
``(iii) a private educational lender;
``(iv) any other person or entity engaged in the business
of securing, making, or extending postsecondary education
loans on behalf of a person or entity described in clause (i)
or (iii); or
``(v) any other holder of a postsecondary education loan
other than the Secretary;
``(D) the term `Director' means the Director of the Bureau;
and
``(E) the term `Secretary' means the Secretary of
Education.'';
(x) in paragraph (15), as redesignated by clause (v), by
striking ``paragraph (5)'' and inserting ``paragraph (9)'';
and
(xi) by adding at the end the following:
``(16) 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 postsecondary
educational lender or servicer) transmitted by mail,
facsimile, or electronically through an email address or
website designated by the postsecondary educational lender or
servicer to receive communications from borrowers that--
``(aa) includes, or otherwise enables the postsecondary
educational lender or 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 postsecondary educational
lender or servicer at a mailing address, facsimile number,
email address, or website address other than the address or
number designated by that postsecondary educational lender or
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 postsecondary educational
lender or servicer shall, within a reasonable period of time,
transfer a written correspondence of a borrower received by
the postsecondary educational lender or servicer at a mailing
address, facsimile number, email address, or website address
other than the address or number designated by that
postsecondary educational lender or servicer to receive
communications from borrowers to the correct address or
appropriate office or other unit of the postsecondary
educational lender or 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 postsecondary educational lender
or servicer on the date on which the written correspondence
is transferred to the correct address or appropriate office
or other unit of the postsecondary educational lender or
servicer.
``(iv) Servicing.--The term `servicing' means 1 or more of
the following:
``(I) Receiving any scheduled periodic payments from a
borrower or notification of such payments pursuant to the
terms of a postsecondary education loan or contract governing
the servicing.
``(II) Applying payments to the borrower's account pursuant
to the terms of the postsecondary education loan or the
contract governing the servicing.
``(III) Maintaining account records for a postsecondary
education loan.
``(IV) Communicating with a borrower regarding a
postsecondary education loan on behalf of the postsecondary
educational lender or servicer.
``(V) Interactions with a borrower, including activities to
help prevent default on obligations arising from
postsecondary education loans, conducted to facilitate the
activities described in subclause (I) or (II) on behalf of
the postsecondary educational lender or servicer.
``(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;
[[Page S5755]]
``(dd) the telephone numbers, email address, 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
``(III) provide to the transferee all borrower information
and complete payment history information for any such
postsecondary education loan, including--
``(aa) an identification of the repayment plan under which
payments were made;
``(bb) the number of months qualifying toward a loan
forgiveness program and identifying such program;
``(cc) the date of enrollment into any income-driven
repayment plan under section 455 or 493C of the Higher
Education Act of 1965 (20 U.S.C. 1087e and 1098e);
``(dd) the dates of any forbearance or deferment; and
``(ee) any application for administrative relief submitted
to the transferor; 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, email address, 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 90-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 available or granted
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.--
``(i) In general.--If a postsecondary educational lender or
servicer makes a change in the mailing address, office, or
procedures for handling payments with respect to any
postsecondary education loan, the postsecondary educational
lender or servicer shall notify the borrower in writing and
through the borrower's preferred or designated method of
communication not less than 45 calendar days in advance of
such change.
``(ii) Borrower protection window.--If a change described
in clause (i) causes a delay in the crediting of the account
of the borrower made during the 90-day period following the
date on which such change took effect, the postsecondary
educational lender or servicer may not impose on the borrower
any negative consequences, including negative credit
reporting, lost eligibility in borrower benefits, late fees,
interest capitalization, or other financial injury.
``(D) Interest rate and term changes for certain
postsecondary education loans.--
``(i) Notification requirements.--
``(I) In general.--Except as provided in clause (iii), a
postsecondary educational lender or servicer shall provide
written notice, in a clear and conspicuous manner, to a
borrower of any material change in the terms of the
postsecondary education loan, including an increase in the
interest rate, not later than 45 days before the effective
date of the change or increase.
``(II) Material changes in terms.--The Director shall, by
regulation, establish guidelines for determining which
changes in terms are material under subclause (I).
``(ii) Limits on interest rate and fee increases applicable
to outstanding balance.--Except as provided in clause (iii),
a postsecondary educational lender or servicer may not
increase the interest rate or other fee applicable to an
outstanding balance on a postsecondary education loan.
``(iii) Exceptions.--The requirements under clauses (i) and
(ii) shall not apply to--
``(I) an increase based on an applicable variable interest
rate incorporated in the terms of a postsecondary education
loan that provides for changes in the interest rate according
to operation of an index that is not under the control of the
postsecondary educational lender or servicer and is published
for viewing by the general public;
``(II) an increase in interest rate due to the completion
of a workout or temporary hardship arrangement by the
borrower or the failure of the borrower to comply with the
terms of a workout or temporary hardship arrangement if--
``(aa) the interest rate applicable to a category of
transactions following any such increase does not exceed the
rate or fee that applied to that category of transactions
prior to commencement of the arrangement; and
``(bb) the postsecondary educational lender or servicer has
provided the borrower, prior to the commencement of such
arrangement, with clear and conspicuous disclosure of the
terms of the arrangement (including any increases due to such
completion or failure); and
``(III) an increase in interest rate due to a provision
included within the terms of a postsecondary education loan
that provides for a lower interest rate based on the
borrower's agreement to a prearranged plan that authorizes
recurring electronic funds transfers if--
``(aa) the borrower withdraws the borrower's authorization
of the prearranged recurring electronic funds transfer plan;
and
``(bb) after withdrawal of the borrower's authorization and
prior to increasing the interest rate, the postsecondary
educational lender or servicer has provided the borrower with
clear and conspicuous disclosure of the impending change in
borrower's interest rate and a reasonable opportunity to
reauthorize the prearranged electronic funds transfers plan.
``(E) Payment information.--
``(i) Statement required with each billing cycle.--A
postsecondary educational lender or servicer for each
borrower's account that is being serviced by the
postsecondary educational lender or servicer and that
includes a postsecondary education loan shall transmit to the
borrower, for each billing cycle during which there is an
outstanding balance in that account, a clearly and
conspicuously written statement that includes--
``(I) the interest rate, principal balance, minimum monthly
payment, and payment due date for each loan;
``(II) the outstanding balance in the account and each loan
at the beginning of the billing cycle;
``(III) the total amount credited to the account and each
loan during the billing cycle;
``(IV) the total amount of unpaid interest for the account
and each loan;
``(V) the amount of any fee added to the account during the
billing cycle, itemized to show each individual fee amount
and reason for each fee;
``(VI) the address and phone number of the postsecondary
educational lender or servicer to which the borrower may
direct billing inquiries;
``(VII) the amount of any payments or other credits during
the billing cycle that was applied respectively to the
principal and to interest for each loan;
``(VIII) the manner, pursuant to subparagraph (G), in which
payments will be allocated among multiple loans if the
borrower does not provide specific payment instructions;
``(IX) whether each loan is in deferment or forbearance;
``(X) information on how to file a complaint with the
Bureau and with the ombudsman designated pursuant to section
1035 of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5535) and the Department of Education;
``(XI) for any borrower considered to be at-risk, as
described in subparagraph (J)(i), a statement that a
repayment specialist office or unit designated under
subparagraph (J) is available to answer inquiries related to
alternative repayment options, including the toll-free
telephone number and email address to contact the specialist
pursuant to subparagraph (J)(iii); and
``(XII) any other information determined appropriate by the
Director through regulations promulgated, based on consumer
testing and in accordance with paragraph (17)(A).
``(ii) Disclosure of payment deadlines.--In the case of a
postsecondary education loan account under which a late fee
or charge may be imposed due to the failure of the borrower
to make payment on or before the due date for such payment,
the billing statement required under clause (i) with respect
to the account shall include, in a conspicuous location on
the billing statement and in clear and plain language, the
date on which the payment is due or, if different, the date
on which a late fee will be charged, together with the amount
of the late fee to be imposed if payment is made after that
date.
``(F) Application of payments.--
``(i) Apply payment on date received.--Unless otherwise
directed by the borrower, a postsecondary educational lender
or servicer shall apply payments to a borrower's account on
the date the payment is received.
``(ii) Promulgation of rules.--The Director, in accordance
with paragraph (17)(A), may promulgate rules for the
application of postsecondary education loan payments that--
``(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 postsecondary educational lenders or
servicers to apply payments on the date received; and
``(V) allows the borrower to instruct the postsecondary
educational lender or servicer
[[Page S5756]]
to apply payments in a manner preferred by the borrower.
``(iii) Method that best benefits borrower.--In
promulgating the rules under clause (ii), the Director shall
choose the allocation method that best benefits the borrower
and is compatible with existing repayment options.
``(G) Allocation of payments among multiple loans.--
``(i) Allocation of underpayments.--Unless otherwise
directed by the borrower, upon receipt of a payment that does
not satisfy the full amount due for each postsecondary
education loan, the postsecondary educational lender or
servicer shall allocate amounts in a manner that minimizes
negative consequences, including negative credit reporting
and late fees, and, where multiple loans share an equal stage
of delinquency, the postsecondary educational lender or
servicer shall first allocate payment to the postsecondary
education loan with the smallest monthly payment, and then,
after satisfying that monthly payment, to each successive
loan bearing the next highest monthly payment, until the
payment is exhausted. A borrower may instruct or expressly
authorize a postsecondary educational lender or servicer to
allocate payments in a different manner.
``(ii) Allocation of excess amounts.--Unless otherwise
directed by the borrower, upon receipt of a payment exceeding
the total amount due among all the borrower's postsecondary
education loans, the postsecondary educational lender or
servicer shall satisfy the amounts due for each loan, and
then allocate amounts in excess of the minimum payment amount
first to the postsecondary education loan balance bearing the
highest annual percentage rate, and then, once that loan is
repaid, to each successive postsecondary education loan
bearing the next highest annual percentage rate, until the
payment is exhausted. A borrower may instruct or expressly
authorize a postsecondary educational lender or servicer to
allocate such excess payments in a different manner.
``(iii) Allocation of exact payments.--Unless otherwise
directed by the borrower upon receipt of a payment that
exactly satisfies the monthly payments for each loan, the
postsecondary educational lender or servicer shall allocate
payments to satisfy each monthly payment.
``(iv) Promulgation of rules.--The Director, in accordance
with paragraph (17)(A), may promulgate rules for the
allocation of payments among multiple postsecondary education
loans that--
``(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 postsecondary educational lenders or
servicers to apply payments on the date received; and
``(V) allows the borrower to instruct postsecondary
educational lenders or servicers 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 shall choose the
allocation method that best benefits the borrower and is
compatible with existing repayment options.
``(H) 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.
``(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.
``(iii) Payments at local branches.--If the loan holder, in
the case of a postsecondary education loan account referred
to in subparagraph (A), is a financial institution that
maintains a branch or office at which payments on any such
account are accepted from the borrower in person, the date on
which the borrower makes a payment on the account at such
branch or office shall be considered to be the date on which
the payment is made for purposes of determining whether a
late fee may be imposed due to the failure of the borrower to
make payment on or before the due date for such payment.
``(I) Borrower inquiries.--
``(i) Duty of postsecondary educational lenders or
servicers to respond to borrower inquiries.--
``(I) Notice of receipt of request.--If a borrower submits
a qualified written request to the postsecondary educational
lender or servicer for information relating to the servicing
of the postsecondary education loan, the postsecondary
educational lender or 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 postsecondary
educational lender or 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 and email address of a
representative of the postsecondary educational lender or
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 postsecondary educational lender or servicer
believes the account of the borrower is correct as determined
by the postsecondary educational lender or servicer; and
``(BB) the name and toll-free or collect-call telephone
number and email address of an individual employed by, or the
office or department of, the postsecondary educational lender
or 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 postsecondary educational lender or servicer;
and
``(BB) the name and toll-free or collect-call telephone
number and email address of an individual employed by, or the
office or department of, the postsecondary educational lender
or 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 postsecondary
educational lender or servicer notifies the borrower of the
extension and the reasons for the delay in responding.
``(bb) Reports to bureau.--Each postsecondary educational
lender or servicer shall, on an annual basis, report to the
Bureau the aggregate number of extensions sought by the such
postsecondary educational lender or servicer under item (aa).
``(ii) Protection against negative consequences.--During
the 60-day period beginning on the date on which a
postsecondary educational lender or servicer receives a
qualified written request from a borrower relating to a
dispute regarding payments by the borrower, a postsecondary
educational lender or servicer may not impose any negative
consequences on the borrower relating to the subject of the
qualified written request or to such period, including--
``(I) engaging in debt collection efforts, including under
chapter 37 of title 31, United States Code;
``(II) providing negative credit information to any
consumer reporting agency (as defined in section 603 of the
Fair Credit Reporting Act (15 U.S.C. 1681a));
``(III) lost eligibility for a borrower benefit;
``(IV) late fees;
``(V) interest capitalization; or
``(VI) other financial injury.
``(J) Repayment specialists for at-risk borrowers.--
``(i) At-risk borrowers.--A postsecondary educational
lender or servicer shall designate an office or other unit to
act as a repayment specialist regarding postsecondary
education loans for--
``(I) any borrower who--
``(aa) becomes 30 calendar days or more delinquent under
the postsecondary education loan; or
``(bb) notifies the postsecondary educational lender or
servicer pursuant to paragraph (8)(C) that the borrower is
having difficulty making payment;
``(II) any borrower who requests information related to
options to reduce or suspend the borrower's monthly payment,
or otherwise indicates that the borrower is experiencing or
is about to experience financial hardship or distress;
``(III) any borrower who has not completed the program of
study for which the borrower received the loans;
``(IV) any borrower who is enrolled in discretionary
forbearance for more than 9 of the previous 12 months;
``(V) any borrower who has rehabilitated or consolidated 1
or more postsecondary education loans out of default within
the prior 24 months;
``(VI) 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;
``(VII) a borrower who seeks to modify the terms of the
repayment of the postsecondary education loan because of
hardship; and
``(VIII) any borrower or segment of borrowers determined by
the Director or the Secretary to be at-risk.
[[Page S5757]]
``(ii) Training.--Staff of the repayment specialist office
or unit designated under clause (i) shall--
``(I) receive rigorous, ongoing training related to
available repayment plans, loan forgiveness, and cancellation
and discharge options; and
``(II) be trained to--
``(aa) assess the borrower's long-term and short-term
financial situation in discussing alternative repayment
options with borrowers;
``(bb) inform borrowers, when there is sufficient
information to determine that a borrower may be eligible,
about closed-school discharge, discharge under defense to
repayment, or total and permanent disability discharge prior
to informing the borrower about any other options for
repayment; and
``(cc) inform borrowers about alternative repayment
options, prior to discussing forbearance and deferment.
``(iii) Toll-free telephone number and email address.--Each
postsecondary educational lender or servicer shall maintain--
``(I) a toll-free telephone number that shall--
``(aa) connect directly to the repayment specialist office
or unit designated under clause (i);
``(bb) be made available on the primary internet website of
the postsecondary educational lender or servicer, on monthly
billing statements, and any disclosures required by paragraph
(6); and
``(cc) not subject borrowers to unreasonable call wait
times; and
``(II) an email address that shall--
``(aa) connect directly to the repayment specialist office
or unit designated under clause (i);
``(bb) be made available on the primary internet website of
the postsecondary educational lender or servicer, on monthly
billing statements, and any disclosures required by paragraph
(6); and
``(cc) be monitored on a regular basis.
``(iv) Compensation.--Staff of the repayment specialist
office or unit designated under clause (i) shall not be
compensated on the basis of the volume of calls or accounts
handled, dollar amounts collected, brevity of calls, or in
any other manner that may encourage undue haste and lack of
diligence or quality customer service.
``(K) Servicemembers, veterans, and postsecondary education
loans.--
``(i) Servicemember and veterans liaison.--Each
postsecondary educational lender or servicer shall designate
an employee to act as the servicemember and veterans liaison
who is responsible for answering inquiries from
servicemembers, veterans, and their immediate family members,
and is specially trained on servicemember and veteran
benefits under the Servicemembers Civil Relief Act (50 U.S.C.
3901 et seq.) and other Federal or State laws related to
postsecondary education loans.
``(ii) Toll-free telephone number and email address.--Each
postsecondary educational lender or servicer shall maintain--
``(I) a toll-free telephone number that shall--
``(aa) connect directly to the servicemember and veterans
liaison designated under clause (i);
``(bb) be made available on the primary internet website of
postsecondary educational lender or servicer and on monthly
billing statements; and
``(cc) not subject borrowers to unreasonable call wait
times; and
``(II) an email address that shall--
``(aa) connect directly to the servicemember and veterans
liaison designated under clause (i);
``(bb) be made available on the primary internet website of
the postsecondary educational lender or servicer and on
monthly billing statements; and
``(cc) be monitored on a regular basis.
``(iii) Prohibition on charge offs and default.--A
postsecondary educational 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 Director, in consultation
with 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, veterans, and their immediate family
members, and is specially trained on servicemembers and
veteran benefits and option under the Servicemembers Civil
Relief Act (50 U.S.C. 3901 et seq.).
``(L) Borrower's loan history.--
``(i) In general.--A postsecondary educational lender or
servicer shall make available in a secure electronic form
usable by borrowers, or in writing upon request, the loan
history of each borrower for each postsecondary education
loan, separately designating--
``(I) history of information on the loan before any
consolidation or transfer of such loan;
``(II) payment history, including repayment plan and
payments--
``(aa) made on such loan to previous postsecondary
educational lenders or servicers; and
``(bb) qualifying toward a loan forgiveness program and
designating such program;
``(III) loan history, including any forbearances,
deferrals, delinquencies, assignment to collection, and
charge offs;
``(IV) annual percentage rate history;
``(V) 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;
``(VI) amount due to pay off the outstanding balance; and
``(VII) any other items determined by the Director through
regulations promulgated in accordance with paragraph (17)(A).
``(ii) Original documentation.--A postsecondary educational
lender or 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.
``(M) Error resolution.--The Director, in consultation with
the Secretary, shall promulgate rules requiring postsecondary
educational lenders or 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.
``(N) Additional servicing standards.--
``(i) Prohibitions.--A postsecondary educational lender or
servicer may not--
``(I) charge a fee for responding to a qualified written
request under this paragraph;
``(II) fail to take timely action to respond to a qualified
written request from a borrower to correct an error relating
to an allocation of payment or the payoff amount of the
postsecondary education loan;
``(III) fail to take reasonable steps to avail the borrower
of all possible alternative repayment arrangements to avoid
default;
``(IV) fail to perform the obligations required under title
IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.);
``(V) fail to respond within 10 business days to a request
from a borrower to provide the name, address, and other
relevant contact information of the loan holder of the
borrower's postsecondary education loan or, for a Federal
Direct Loan or a Federal Perkins Loan, the Secretary of
Education, or the institution of higher education who made
the loan, respectively;
``(VI) fail to comply with any applicable requirement of
the Servicemembers Civil Relief Act (50 U.S.C. 3901 et seq.);
``(VII) charge a convenience, processing, or any other fee
for payments made electronically or by telephone;
``(VIII) fail to comply with any other obligation that the
Bureau, by regulation, has determined to be appropriate to
carry out the consumer protection purposes of this paragraph;
``(IX) fail to perform other standard servicing duties and
functions; or
``(X) engage in any unfair, deceptive, or abusive acts or
practices, as those terms are described in section 1031 of
the Consumer Financial Protection Act of 2010 (12 U.S.C.
5531).
``(ii) Business hours.--Postsecondary educational lenders
or servicers shall be open for borrower inquiries and
outreach during and after normal business hours, including
availability after 5:00 pm in all continental United States
time zones and some weekend hours.
``(iii) Additional standards.--The Director may promulgate
regulations, in accordance with paragraph (17)(A),
establishing 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.
``(O) Prohibition on limiting borrower legal action by
postsecondary educational lenders and servicers.--
``(i) Waiver of rights and remedies.--Notwithstanding
chapter 1 of title 9, United States Code (commonly known as
the `Federal Arbitration Act'), any rights and remedies
available to borrowers against postsecondary educational
lenders or servicers may not be waived by any agreement,
policy, or form, including by a mandatory predispute
arbitration agreement or class action waiver.
``(ii) Predispute arbitration agreements.--Notwithstanding
chapter 1 of title 9, United States Code (commonly known as
the `Federal Arbitration Act'), no limitation or restriction
on the ability of a borrower to pursue a claim in court with
respect to a postsecondary education loan, including
mandatory predispute arbitration agreements and class action
waivers, shall be valid or enforceable by a postsecondary
educational lender or servicer, including as a third-party
beneficiary or by estoppel.
``(P) 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.
``(Q) Civil liability.--A postsecondary educational lender
or 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
postsecondary educational lender or servicer shall be subject
to the liability provisions under such
[[Page S5758]]
section, including the provisions under paragraphs (1),
(2)(A)(i), (2)(B), and (3) of section 130(a).
``(R) Eligibility for discharge.--The Director, in
accordance with paragraph (17)(A), shall promulgate rules
requiring postsecondary educational lenders and servicers
to--
``(i) identify and contact borrowers who may be eligible
for--
``(I) student loan discharge by the Secretary, including
under section 437 of the Higher Education Act of 1965 (20
U.S.C. 1087); and
``(II) special and time-limited discharge opportunities,
including borrowers who may become eligible for such
discharge upon taking one or more actions; and
``(ii) provide the borrower, in writing, in simple and
understandable terms, complete and accurate information about
obtaining such discharge, including any action that must be
taken in order to become eligible for discharge; and
``(iii) provide the information described under clause (ii)
to any borrower of the postsecondary educational lender or
servicer who contacts the lender or servicer and inquires
about loan affordability or discharge opportunities.
``(S) Forbearance upon request.--A postsecondary
educational lender or servicer shall grant a borrower
forbearance on a private education loan, renewable at 12-
month intervals, if--
``(i) the borrower requests forbearance; and
``(ii) the borrower is described in any of subclauses (I)
through (IV) of section 428(c)(3)(A)(i) of the Higher
Education Act of 1965 (20 U.S.C. 1078(c)(3)(A)(i)).
``(17) Consumer financial protection bureau requirements.--
``(A) Rulemaking.--The Director shall, based on consumer
testing (as appropriate) and upon consideration of any final
recommendations published by the Secretary under section
456(f)(3) of the Higher Education Act of 1965 (20 U.S.C.
1087f(g)(3)), promulgate regulations in consultation with the
Secretary, to carry out the requirements of this subsection.
``(B) Compliance for certain entities.--
``(i) In general.--The Director may promulgate regulations
under subparagraph (A) to require an entity or class of
entities with which the Secretary has entered into a contract
under section 456 of the Higher Education Act of 1965 (20
U.S.C. 1087f) to comply with an alternative requirement or
standard promulgated by the Director in lieu of compliance
with any requirement or standard under this subsection if the
Director determines that--
``(I) such entity or class of entities are not required by
the Secretary pursuant to the contract to perform a servicing
function governed by the requirement or standard, and where
such function is required by the Secretary, to be performed
by another entity or class of entities; or
``(II) the Secretary, in consultation with the Chief
Operating Officer of Federal Student Aid, has promulgated
regulations to establish an alternative requirement or
standard with respect to such entity or class of entities
that better benefits or protects borrowers and the Director
incorporates such requirement or standard that better
benefits or protects borrowers into regulations promulgated
under subparagraph (A).
``(ii) Reports.--The Director shall 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 any regulations
promulgated under clause (i).
``(18) Postsecondary educational lenders or servicers and
contracts or subcontracts.--
``(A) In general.--Any person or entity that enters into a
contract or subcontract with a postsecondary educational
lender or servicer to perform the servicing of a
postsecondary educational loan may fulfill the obligations of
the postsecondary educational lender or servicer under this
subsection.
``(B) Joint and several liability for service providers.--
Any entity or person described in subparagraph (A) shall be
jointly and severally liable for the actions of the entity or
person in fulfilling the obligations of the postsecondary
educational lender or servicer under this subsection.''; 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)(11)''; 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), (10), (11), or (12) of
section 128(e),''.
(b) Effective Date.--
(1) In general.--The amendments made under subsection (a)
shall be effective 180 days after the date of enactment of
this Act.
(2) Delay.--The Director of the Bureau of Consumer
Financial Protection shall delay the effective date of the
amendments made under subsection (a) for not more than 1
additional year with respect to entities engaged in servicing
pursuant to a contract awarded under section 456 of the
Higher Education Act of 1965 (20 U.S.C. 1087f) pending the
Secretary of Education's final recommendations required under
section 456(f) of such Act related to the promulgation of
regulations by the Director under section 128(e)(17) of the
Truth in Lending Act (15 U.S.C. 1638(e)(17)).
SEC. 4. REHABILITATION OF PRIVATE EDUCATION LOANS.
Section 623(a)(1)(E) of the Fair Credit Reporting Act (15
U.S.C. 1681s-2(a)(1)(E)) is amended to read as follows:
``(E) Rehabilitation of private education loans.--
``(i) In general.--If a borrower of a private education
loan rehabilitates such loan in accordance with section
128(e)(23) of the Truth in Lending Act (15 U.S.C.
1638(e)(23)), the private educational lender or entity
engaged in servicing such loan 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.
``(ii) Banking agencies.--
``(I) In general.--If a private educational lender is
supervised by a Federal banking agency, the private
educational lender shall seek written approval from the
Federal banking agency that the terms and conditions of the
loan rehabilitation program of the lender meet the
requirements of section 128(e)(23) of the Truth in Lending
Act (15 U.S.C. 1638(e)(23)).
``(II) Feedback.--An appropriate Federal banking agency
shall provide feedback to a private educational lender within
120 days of a request for approval under subclause (I).
``(iii) Definitions.--For purposes of this subparagraph--
``(I) the term `appropriate Federal banking agency' has the
meaning given the term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
``(II) the term `private education loan' has the meaning
given the term in section 140(a) of the Truth in Lending Act
(15 U.S.C. 1650(a)).''.
SEC. 5. IMPROVED CONSUMER PROTECTIONS FOR PRIVATE EDUCATION
LOANS.
Section 128(e) of the Truth in Lending Act (15 U.S.C.
1638(e)), as amended by section 3, is further amended--
(1) by adding at the end the following:
``(19) Discharge of private education loans in the event of
death or disability of the borrower.--Each private education
loan shall include terms that provide that the liability to
repay the loan shall be cancelled--
``(A) upon the death of the borrower;
``(B) if the borrower becomes permanently and totally
disabled, as determined under section 437(a)(1) of the Higher
Education Act of 1965 (20 U.S.C. 1087(a)(1)) and the
regulations promulgated by the Secretary under that section;
or
``(C) if the Secretary of Veterans Affairs or the Secretary
of Defense determines that the borrower is unemployable due
to a service-connected condition or disability, in accordance
with the requirements of section 437(a)(2) of such Act and
the regulations promulgated by the Secretary under that
section.
``(20) Terms for co-borrowers.--Each private education loan
shall include terms that clearly define the requirements to
release a co-borrower from the obligation.
``(21) Prohibition of acceleration of payments on private
education loans.--
``(A) In general.--Except as provided in subparagraph (B),
a private education loan executed after the date of enactment
of this paragraph may not include a provision that permits
the private educational lender, loan holder, or entity
engaged in servicing such loan to accelerate, in whole or in
part, payments on the private education loan.
``(B) Acceleration caused by a payment default.--A private
education loan may include a provision that permits
acceleration of the loan in cases of payment default.
``(22) Prohibition on denial of credit due to eligibility
for protection under servicemembers civil relief act.--A
private educational lender may not deny or refuse credit to
an individual who is entitled to any right or protection
provided under the Servicemembers Civil Relief Act (50 U.S.C.
3901 et seq.) or subject, solely by reason of such
entitlement, such individual to any other action described in
paragraphs (1) through (6) of section 108 of such Act.
``(23) Rehabilitation of private education loans.--
``(A) In general.--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
entity engaged in servicing such loan 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.
``(B) Terms.--No private educational lender shall offer a
borrower rehabilitation of loans where the payment required
to rehabilitate a defaulted private education loan is less
than the monthly payment amount required upon completion of
rehabilitation.'';
(2) in paragraph (1)--
(A) by striking subparagraph (D) and inserting the
following:
``(D) requirements for a co-borrower, including--
[[Page S5759]]
``(i) any changes in the applicable interest rates without
a co-borrower; and
``(ii) any conditions the borrower is required meet in
order to release a co-borrower from the private education
loan obligation;'';
(B) by redesignating subparagraphs (O), (P), (Q), and (R)
as subparagraphs (P), (Q), (R), and (S), respectively; and
(C) by inserting after subparagraph (N) the following:
``(O) in the case of a refinancing of education loans that
include a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.)--
``(i) a list containing each loan to be refinanced, which
shall identify whether the loan is--
``(I) a private education loan;
``(II) a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.); or
``(III) a loan 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
``(ii) benefits that the borrower may be forfeiting,
including income-driven repayment options, opportunities for
loan forgiveness, forbearance or deferment options, interest
subsidies, and tax benefits;''; and
(3) in paragraph (2)--
(A) by redesignating subparagraphs (O) and (P) as
subparagraphs (P) and (Q), respectively; and
(B) by inserting after subparagraph (N) the following:
``(O) in the case of a refinancing of education loans that
include a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.)--
``(i) a list containing each loan to be refinanced, which
shall identify whether the loan is--
``(I) a private education loan;
``(II) a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.); or
``(III) a loan 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
``(ii) benefits that the borrower may be forfeiting,
including income-driven repayment options, opportunities for
loan forgiveness, forbearance or deferment options, interest
subsidies, and tax benefits;''.
SEC. 6. 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 sections 3 and 5, 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 covered educational
institution 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 (20 U.S.C. 1087kk et seq.);
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 (20 U.S.C. 1070 et seq.) (except
for Federal Direct PLUS Loans made on behalf of the student)
and other financial assistance known to the institution, as
applicable (except for loans made under the Public Health
Service Act (42 U.S.C. 201 et seq.)).
``(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 covered educational institution 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.''; and
(B) by adding at the end the following:
``(24) 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 a covered educational institution.
``(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
covered educational institution, 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.
``(25) Unlawful conduct.--An extension of credit described
in this subsection shall be void if made to a student to
attend--
``(A) a covered educational institution that, at the time
of the execution of such extension of credit, was not
lawfully authorized to operate in the State in which the
student resided at the time; or
``(B) a covered educational institution that engaged in any
unfair, deceptive, or abusive acts or practices, as those
terms are described in section 1031 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5531), related to the
student's recruitment, enrollment, instruction, job
placement, or other interactions with the covered educational
institution or its agents.''.
(2) Definition of private education loan.--Section
140(a)(8) of the Truth in Lending Act (15 U.S.C. 1650(a)(8))
is amended--
(A) in subparagraph (A)--
(i) by redesignating clause (ii) as clause (iii);
(ii) in clause (i), by striking ``and'' after the
semicolon;
(iii) 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''; and
(iv) in clause (iii), as redesignated by clause (i), by
striking ``regardless of'' and all that follows through
``educational lender'' and inserting the following:
``regardless of--
``(I) whether the loan is provided through the institution
or provider of postsecondary education that the subject
student attends or directly to the borrower from the private
educational lender; or
``(II) whether some or all of the postsecondary education
financed by the private education loan has already been
provided;''; and
(B) by striking subparagraph (B) and inserting the
following:
``(B) does not include--
``(i) an extension of credit under an open-end consumer
credit plan, unless such open-end credit is extended
expressly for postsecondary education expenses;
``(ii) a reverse mortgage transaction;
``(iii) a residential mortgage transaction; or
``(iv) any other loan that is secured by real property or a
dwelling; 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), (24), and (25) 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 (except for Federal Direct PLUS
Loans made on behalf of the student) and other assistance
known to the institution, as applicable (except for loans
made under the Public Health Service Act (42 U.S.C. 201 et
seq.));
``(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 S5760]]
``(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 educational
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 options, including
loan consolidation or refinancing; and
``(II) for the discharge of the borrower and co-borrower's,
if applicable, liability to repay the loan pursuant to
paragraphs (19) and (20) of section 128(e) of the Truth in
Lending Act (15 U.S.C. 1638(e)).
``(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.--
(1) In general.--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--
(A) 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
(B) institutions of higher education with section
487(a)(28) of the Higher Education Act of 1965 (20 U.S.C.
1094(a)), as amended by subsection (b).
(2) Contents.--The report under paragraph (1) shall include
information about the degree to which specific institutions
utilize certifications in effectively--
(A) encouraging the exhaustion of Federal student loan
eligibility by borrowers prior to taking on private education
loan debt; and
(B) lowering student private education loan debt by
borrowers.
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 entity engaged in
servicing.''.
SEC. 8. EDUCATION LOAN OMBUDSMAN.
Section 1035 of the Consumer Financial Protection Act of
2010 (12 U.S.C. 5535) is amended--
(1) in the section heading, by striking ``private'';
(2) in subsection (a)--
(A) by striking ``a Private'' and inserting ``an''; and
(B) by striking ``private'';
(3) in subsection (b), by striking ``private education
student loan'' and inserting ``postsecondary education
loan'';
(4) in subsection (c)--
(A) in the matter preceding paragraph (1), by striking
``subsection'' and inserting ``section'';
(B) in paragraph (1), by striking ``private'';
(C) by striking paragraph (2) and inserting the following:
``(2) coordinate with the unit of the Bureau established
under section 1013(b)(3), in order to monitor complaints by
borrowers and responses to those complaints by the Bureau or
other appropriate Federal or State agency;''; and
(D) in paragraph (3), by striking ``private'';
(5) in subsection (d)--
(A) in paragraph (2)--
(i) by striking ``on the same day annually''; and
(ii) by inserting ``and be made available to the public''
after ``Representatives''; and
(B) by adding at the end the following:
``(3) Contents.--The report required under paragraph (1)
shall include information on the number, nature, and
resolution of complaints received, disaggregated by
postsecondary educational lender or servicer, region, State,
and institution of higher education.''; and
(6) by striking subsection (e) and inserting the following:
``(e) Definitions.--In this section:
``(1) Borrower.--The term `borrower' means a borrower of a
postsecondary education loan.
``(2) Institution of higher education.--The term
`institution of higher education' has the meaning given the
term in section 140 of the Truth in Lending Act (15 U.S.C.
1650).
``(3) Postsecondary education loan.--The term
`postsecondary education loan' means--
``(A) a private education loan, as defined in section 140
of the Truth in Lending Act (15 U.S.C. 1650);
``(B) 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.); or
``(C) a loan 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.).''.
SEC. 9. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE
EDUCATIONAL LENDERS.
(a) In General.--Not later than 2 years after the date of
enactment of this Act, the Director of the Bureau of Consumer
Financial Protection and the Secretary of Education, in
consultation with the Commissioners of the Federal Trade
Commission and the Attorney General of the United States,
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 education loans (as that term is
defined in section 140 of the Truth in Lending Act (15 U.S.C.
1650)) and private educational lenders (as that term is
defined in such section).
(b) Contents.--The report required by this section shall
examine, at a minimum--
(1) the growth and changes of the private education loan
market in the United States;
(2) factors influencing such growth and changes;
(3) the extent to which students and parents of students
rely on private education loans to finance postsecondary
education and the private education loan indebtedness of
borrowers;
(4) the characteristics of private education loan
borrowers, including--
(A) the types of institutions of higher education that they
attend;
(B) socioeconomic characteristics (including income and
education levels, racial characteristics, geographical
background, age, and gender);
(C) what other forms of financing borrowers use to pay for
education;
(D) whether they exhaust their Federal loan options before
taking out a private education loan;
(E) whether such borrowers are dependent or independent
students (as determined under part F of title IV of the
Higher Education Act of 1965 (20 U.S.C. 1087kk et seq.)) or
parents of such students;
(F) whether such borrowers are students enrolled in a
program leading to a certificate, license, or credential
other than a degree, an associate degree, a baccalaureate
degree, or a graduate or professional degree; and
(G) if practicable, employment and repayment behaviors;
(5) the characteristics of private educational lenders,
including whether such creditors are for-profit, non-profit,
or institutions of higher education;
(6) the underwriting criteria used by private educational
lenders, including the use of cohort default rate (as such
term is defined in section 435(m) of the Higher Education Act
of 1965 (20 U.S.C. 1085(m));
(7) the terms, conditions, and pricing of private education
loans;
(8) the consumer protections available to private education
loan borrowers, including the effectiveness of existing
disclosures and requirements and borrowers' awareness and
understanding about terms and conditions of various financial
products;
(9) whether Federal regulators and the public have access
to information sufficient to provide them with assurances
that private education loans are provided in accord with
[[Page S5761]]
the Nation's fair lending laws and that allows public
officials to determine lender compliance with fair lending
laws; and
(10) any statutory or legislative recommendations necessary
to improve consumer protections for private education loan
borrowers and to better enable Federal regulators and the
public to ascertain private educational lender compliance
with fair lending laws.
SEC. 10. REPORT ON POSTSECONDARY EDUCATION LOAN SERVICING.
Not later than 1 year after the date of enactment of this
Act, the Director of the Bureau of Consumer Financial
Protection and the Secretary of Education shall submit a
joint 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 servicing of postsecondary education
loans, including--
(1) any legislative recommendations to improve servicing
standards; and
(2) information on proactive early intervention methods by
postsecondary educational lenders or servicers to help
distressed postsecondary education loan borrowers enroll in
any eligible repayment plans.
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