[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

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     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.

                          ____________________