[Congressional Record (Bound Edition), Volume 159 (2013), Part 13]
[Senate]
[Pages 18524-18528]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DURBIN (for himself, Ms. Warren, Mrs. Boxer, and Mr. 
        Reed):
  S. 1803. A bill to require certain protections for student loan 
borrowers, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1803

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

     SECTION 1. SHORT TITLE.

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

     SEC. 2. TRUTH IN LENDING ACT AMENDMENTS.

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

[[Page 18525]]

     reasonable effort to obtain the information necessary to 
     determine--

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

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

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

       ``(ii) Consumer financial protection bureau requirements.--
     The Director of the Consumer Financial Protection Bureau, in 
     consultation with the Secretary of Education, shall 
     promulgate rules establishing minimum standards for private 
     educational lenders in carrying out the requirements of this 
     paragraph and a model form for borrowers to notify private 
     educational lenders of the information under this 
     paragraph.'';
       (vi) in paragraph (8), as redesignated by clause (iv), by 
     adding at the end the following:
       ``(D) Model disclosure form for alternative repayment 
     plans, forbearance, and deferment options.--Not later than 2 
     years after the date of enactment of the Student Loan 
     Borrower Bill of Rights, the Director of the Consumer 
     Financial Protection Bureau, in consultation with the 
     Secretary of Education, shall develop and issue model forms 
     to allow borrowers to compare alternative repayment plans, 
     forbearance, and deferment options with the borrower's 
     existing repayment plan with respect to a private education 
     loan. Such forms shall include the following:
       ``(i) The total amount to be paid over the life of the 
     loan.
       ``(ii) The total amount in interest to be paid over the 
     life of the loan.
       ``(iii) The monthly payment amount.
       ``(iv) The expected pay-off date.
       ``(v) Related fees and costs.
       ``(vi) Eligibility requirements, and how the borrower can 
     apply for the alternative repayment plan, forbearance, or 
     deferment option.
       ``(vii) Any consequences, including the loss of eligibility 
     for alternative repayment plans, forbearance, or deferment 
     options.'';
       (vii) in paragraph (11), as redesignated by clause (iv), by 
     striking ``paragraph (7)'' and inserting ``paragraph (10)'';
       (viii) in paragraph (14), as redesignated by clause (iv), 
     by striking ``paragraph (5)'' and inserting ``paragraph 
     (8)''; and
       (ix) by adding at the end the following:
       ``(15) Student loan borrower bill of rights.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Borrower.--The term `borrower' means the person to 
     whom a private education loan is extended.
       ``(ii) Charge off.--The term `charge off' means charge to 
     profit and loss, or subject to any similar action.
       ``(iii) Private education loan.--The term `private 
     education loan' has the meaning given the term in section 
     140(a).
       ``(iv) Servicer.--The term `servicer' means the person 
     responsible for the servicing of a private education loan, 
     including any agent of such person or the person who makes, 
     owns, or holds a loan if such person also services the loan.
       ``(v) Servicing.--The term `servicing' means--

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

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

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

       ``(ii) the transferee shall--

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

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

       ``(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 private education loan that is forwarded from the 
     transferor servicer during the 60-day period beginning on the 
     date on which the transferor servicer stops accepting 
     payment, if the transferor servicer receives such payment on 
     or before the applicable due date, including any grace 
     period;
       ``(III) provide borrowers a simple, online process for 
     transferring existing electronic fund transfer authority; and
       ``(IV) honor any promotion or benefit offered to the 
     borrower or advertised by the previous owner or transferor 
     servicer of such private education loan.

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

       ``(I) minimizes the amount of fees and interest incurred by 
     the borrower and the total loan amount paid by the borrower;
       ``(II) minimizes delinquencies, assignments to collection, 
     and charge-offs;

[[Page 18526]]

       ``(III) requires servicers to apply payments on the date 
     received; and
       ``(IV) allows the borrower to instruct the servicer to 
     apply payments in a manner preferred by the borrower.

       ``(E) Rehabilitation of loans.--If a borrower successfully 
     and voluntarily makes 9 payments within 20 days of the due 
     date during 10 consecutive months of amounts owed on a 
     private education loan, or otherwise brings a private 
     education loan current after the loan is charged-off, the 
     loan shall be considered rehabilitated, and the lender or 
     servicer shall request that any consumer reporting agency to 
     which the charge-off was reported remove the delinquency that 
     led to the charge-off and the charge-off from the borrower's 
     credit history.
       ``(F) Servicemembers, veterans, and private education 
     loans.--
       ``(i) Servicemember and veterans liaison.--Each servicer 
     shall designate an employee to act as the servicemember and 
     veterans liaison who is responsible for answering inquiries 
     from servicemembers and veterans, and is specially trained on 
     servicemember and veteran benefits under the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 501 et seq.) and other 
     Federal or State laws related to private education loans.
       ``(ii) Toll-free telephone number.--Each servicer shall 
     maintain a toll-free telephone number that shall--

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

       ``(iii) Prohibition on charge offs.--A lender or servicer 
     may not charge off or report a private education loan as 
     delinquent, assigned to collection (internally or by referral 
     to a third party), 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).
       ``(G) Borrower's loan history.--
       ``(i) In general.--A servicer shall make available through 
     a secure website, or in writing upon request, the loan 
     history of each borrower for each private education loan, 
     separately designating--

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

       ``(ii) Original documentation.--A servicer shall make 
     available to the borrower, if requested, at no charge, copies 
     of the original loan documents and the promissory note for 
     each private education loan.
       ``(H) Error resolution.--The Director of the Consumer 
     Financial Protection Bureau, in consultation with the 
     Secretary of Education, shall promulgate rules requiring 
     servicers to establish error resolution procedures to allow 
     borrowers to inquire about errors related to their private 
     education loans and obtain timely resolution of such errors.
       ``(I) Additional servicing standards.--The Director of the 
     Consumer Financial Protection Bureau, in consultation with 
     the Secretary of Education, may establish additional 
     servicing standards to reduce delinquencies, assignment to 
     collections, and charge-offs, and to ensure borrowers 
     understand their rights and obligations related to their 
     private education loans.
       ``(J) Arbitration.--
       ``(i) Waiver of rights and remedies.--Any rights and 
     remedies available to borrowers against servicers may not be 
     waived by any agreement, policy, or form, including by a 
     predispute arbitration agreement.
       ``(ii) Predispute arbitration agreements.--No predispute 
     arbitration agreement shall be valid or enforceable by a 
     servicer, including as a third-party beneficiary or by 
     estoppel, if the agreement requires arbitration of a dispute 
     with respect to a private education loan. This subparagraph 
     applies to predispute arbitration agreements entered into 
     before the date of enactment of the Student Loan Borrower 
     Bill of Rights, as well as on and after such date of 
     enactment, if the violation that is the subject of the 
     dispute occurred on or after such date of enactment.
       ``(K) Enforcement.--The provisions of this paragraph shall 
     be enforced by the agencies specified in subsections (a) 
     through (d) of section 108, in the manner set forth in that 
     section or under any other applicable authorities available 
     to such agencies by law.
       ``(L) Preemption.--Nothing in this paragraph may be 
     construed to preempt any provision of State law regarding 
     private education loans where the State law provides stronger 
     consumer protections.
       ``(M) Civil liability.--A servicer that fails to comply 
     with any requirement imposed under this paragraph shall be 
     deemed a creditor that has failed to comply with a 
     requirement under this chapter for purposes of liability 
     under section 130 and such servicer shall be subject to the 
     applicable liability provisions under such section.''; and
       (B) by adding at the end the following:
       ``(g) Information To Be Available at No Charge.--The 
     information required to be disclosed under this section shall 
     be made available at no charge to the borrower.''; and
       (2) in section 130(a)--
       (A) in paragraph (3), by striking ``128(e)(7)'' and 
     inserting ``128(e)(10)''; and
       (B) in the flush matter at the end, by striking ``or 
     paragraph (4)(C), (6), (7), or (8) of section 128(e),'' and 
     inserting ``or paragraph (4)(C), (9), (10), or (11) of 
     section 128(e),''.

     SEC. 3. STUDENT LOAN BORROWER BILL OF RIGHTS.

       The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) 
     is amended--
       (1) in part G of title IV (20 U.S.C. 1088 et seq.) by 
     adding at the end the following:

     ``SEC. 493E. STUDENT LOAN BORROWER BILL OF RIGHTS.

       ``(a) Definitions.--In this section:
       ``(1) Servicer.--The term `servicer' means the person 
     responsible for the servicing of any student loan, including 
     any agent of such person or the person who makes, owns, or 
     holds a loan if such person also services the loan.
       ``(2) Servicing.--The term `servicing' means--
       ``(A) receiving any scheduled periodic payments from a 
     borrower pursuant to the terms of a student loan;
       ``(B) making the payments of principal and interest and 
     such other payments with respect to the amounts received from 
     the borrower, as may be required pursuant to the terms of the 
     loan; and
       ``(C) performing other administrative services with respect 
     to the loan.
       ``(3) Student loan.--The term `student loan' means a loan 
     made, insured, or guaranteed under this title.
       ``(b) Transfer of Lender or Servicer.--If the sale, other 
     transfer, or assignment of a student 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--
       ``(1) the transferor shall--
       ``(A) notify the borrower in writing not fewer than 45 days 
     before transferring a legally enforceable right to receive 
     payment from the borrower on such loan, of--
       ``(i) the sale, transfer, or assignment;
       ``(ii) the identity of the transferee;
       ``(iii) the name and address of the party to whom 
     subsequent payments or communications must be sent;
       ``(iv) the telephone numbers and websites of both the 
     transferor and the transferee;
       ``(v) the effective date of the sale, transfer, or 
     assignment;
       ``(vi) the date on which the current servicer will stop 
     accepting payments; and
       ``(vii) the date on which the transferee servicer will 
     begin accepting payment; and
       ``(B) forward to the transferee servicer any payment with 
     respect to such student loan, immediately upon receiving such 
     payment, from a borrower during the 60-day period beginning 
     on the date on which the transferor servicer stops accepting 
     payment for such student loan; and
       ``(2) the transferee shall--
       ``(A) notify the borrower in writing not fewer than 45 days 
     before transferring a legally enforceable right to receive 
     payment from the borrower on such loan, of--
       ``(i) the sale, transfer, or assignment;
       ``(ii) the identity of the transferor;
       ``(iii) the name and address of the party to whom 
     subsequent payments or communications must be sent;
       ``(iv) the telephone numbers and websites of both the 
     transferor and the transferee;
       ``(v) the effective date of the sale, transfer, or 
     assignment;
       ``(vi) the date on which the current servicer will stop 
     accepting payments; and
       ``(vii) the date on which the transferee servicer will 
     begin accepting payment;
       ``(B) accept as on-time and may not impose any late fee or 
     finance charge with respect to such student loan for any 
     payment forwarded from the transferor servicer during the 60-
     day period beginning on the date on which the transferor 
     servicer stops accepting payment, if the transferor servicer 
     received such payment from the borrower on or before the 
     applicable due date, including any grace period;
       ``(C) provide borrowers a simple, online process for 
     transferring existing electronic fund transfer authority; and
       ``(D) honor any promotion or benefit offered to the 
     borrower or advertised by the previous owner or transferor 
     servicer of such student loan.
       ``(c) Material Change in Mailing Address or Procedure for 
     Handling Payments.--If a servicer makes a change in the 
     mailing address, office, or procedures for handling payments 
     with respect to any student loan, and such change causes a 
     delay in the crediting of the account of the borrower made 
     during the 60-day period following the date on which such 
     change took effect, the servicer may not impose any late fee 
     or finance charge for a late payment on such student loan.
       ``(d) Eligibility for Discharge.--The Director of the 
     Consumer Financial Protection Bureau, in consultation with 
     the Secretary, shall promulgate rules requiring lenders and 
     servicers to--

[[Page 18527]]

       ``(1) identify and contact borrowers who may be eligible 
     for student loan discharge by the Secretary;
       ``(2) provide the borrower, in writing, in simple and 
     understandable terms, information about obtaining such 
     discharge; and
       ``(3) create a streamlined process for eligible borrowers 
     to apply for and receive such discharge.
       ``(e) Application of Payments.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, the Director of the Consumer Financial Protection 
     Bureau, in consultation with the Secretary, shall issue rules 
     for the application of student loan payments that--
       ``(A) minimizes the amount of fees and interest incurred by 
     the borrower and the total loan amount paid by the borrower;
       ``(B) minimizes delinquencies, assignments to collection, 
     and charge offs;
       ``(C) requires servicers to apply payments on the date 
     received; and
       ``(D) allows the borrower to direct the servicer to apply 
     payments in a manner preferred by the borrower.
       ``(2) Method that best benefits borrower.--In issuing the 
     rules under paragraph (1), the Director of the Consumer 
     Financial Protection Bureau shall choose the application 
     method that best benefits the borrower and is compatible with 
     existing repayment options.
       ``(f) Servicemembers, Veterans, and Student Loans.--
       ``(1) Servicemember and veterans liaison.--Each servicer of 
     a student loan shall designate an employee to act as the 
     servicemember and veterans liaison who is responsible for 
     answering inquiries from servicemembers and veterans, and is 
     specially trained on servicemember and veteran benefits and 
     options under the Servicemembers Civil Relief Act (50 U.S.C. 
     App. 501 et seq.) and other Federal or State laws related to 
     student loans.
       ``(2) Toll-free telephone number.--Each servicer of a 
     student loan shall maintain a toll-free telephone number for 
     the servicemember and veterans liaison designated under 
     paragraph (1), which shall be made available on the primary 
     Internet website of the servicer and on monthly billing 
     statements.
       ``(3) Prohibition on default.--Notwithstanding any other 
     provision of this Act, a servicer may not report a student 
     loan as delinquent, assigned to collection (internally or by 
     referral to a third party), charged off, or in default, 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).
       ``(4) Additional liaisons.--The Secretary shall determine 
     additional entities with whom borrowers interact, including 
     guaranty agencies, that shall designate an employee to act as 
     the servicemember and veterans liaison who is responsible for 
     answering inquiries from servicemembers and veterans, and is 
     specially trained on servicemember and veteran benefits and 
     options under the Servicemembers Civil Relief Act (50 U.S.C. 
     App. 501 et seq.) and other Federal or State laws related to 
     student loans.
       ``(g) Borrower's Loan History.--
       ``(1) In general.--A servicer of a student loan shall make 
     available through a secure website, or in writing upon 
     request, the loan history of each borrower for each student 
     loan, separately designating--
       ``(A) payment history;
       ``(B) loan history, including any forbearances, deferrals, 
     delinquencies, and defaults;
       ``(C) annual percentage rate history; and
       ``(D) 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.
       ``(2) Original documentation.--A servicer shall make 
     available to the borrower, if requested, at no charge, copies 
     of the original loan documents and the promissory note for 
     each student loan.
       ``(h) Error Resolution.--The Director of the Consumer 
     Financial Protection Bureau, in consultation with the 
     Secretary, shall promulgate rules requiring servicers to 
     establish error resolution procedures to allow borrowers to 
     inquire about errors related to their student loans and 
     obtain timely resolution of such errors.
       ``(i) Additional Servicing Standards.--The Director of the 
     Consumer Financial Protection Bureau, in consultation with 
     the Secretary, may establish additional servicing standards 
     to reduce delinquencies, assignments to collection, and 
     defaults, and to ensure borrowers understand their rights and 
     obligations related to their student loans.
       ``(j) Promulgation of Rules.--The Director of the Consumer 
     Financial Protection Bureau, in consultation with the 
     Secretary, shall promulgate rules implementing this 
     section.'';
       (2) in section 433 (20 U.S.C. 1083)--
       (A) in subsection (b)--
       (i) in paragraph (12), by striking ``and'' after the 
     semicolon;
       (ii) in paragraph (13), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(14) a statement that--
       ``(A) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(B) a Servicemember and Veterans Liaison designated under 
     section 493E(f) is available to answer inquiries about 
     servicemember and veteran benefits, including the toll-free 
     telephone number to contact the Liaison pursuant to section 
     493E(f).''; and
       (B) in subsection (e)--
       (i) in paragraph (2), by adding at the end the following:
       ``(D) A statement that--
       ``(i) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(ii) a Servicemember and Veterans Liaison designated 
     under section 493E(f) is available to answer inquiries about 
     servicemember and veteran benefits, including the toll-free 
     telephone number to contact the Liaison pursuant to section 
     493E(f).'';
       (ii) in paragraph (3), by adding at the end the following:
       ``(F) A statement that--
       ``(i) the borrower may be entitled to servicemember and 
     veteran benefits under the Servicemembers Civil Relief Act 
     (50 U.S.C. App. 501 et seq.) and other Federal or State laws; 
     and
       ``(ii) a Servicemember and Veterans Liaison designated 
     under section 493E(f) is available to answer inquiries about 
     servicemember and veteran benefits, including the toll-free 
     telephone number to contact the Liaison pursuant to section 
     493E(f).''; and
       (iii) by adding at the end the following:
       ``(4) Notification of repayment options and alternatives to 
     default.--The Secretary shall require eligible lenders to, 
     not later than 1 year after the date of enactment of the 
     Student Loan Borrower Bill of Rights--
       ``(A) notify borrowers, in writing, in simple and 
     understandable terms, about alternative repayment options, 
     including income-based repayment, income contingent 
     repayment, consolidation, and forgiveness options, as well as 
     servicemember or veteran benefits under the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 501 et seq.) or other 
     Federal or State laws;
       ``(B) provide borrowers, in writing, in simple and 
     understandable terms, information about alternative repayment 
     plans, including all terms, conditions, and fees or costs 
     associated with such repayment plans in a format that allows 
     the borrower to compare the current repayment plan with 
     alternative repayment plans; and
       ``(C) offer to enroll such borrowers in alternative 
     repayment plans, if eligible.''; and
       (3) in section 455(d) (20 U.S.C. 1087e(d)), by adding at 
     the end the following:
       ``(6) Notification of repayment options.--The Secretary 
     shall carry out, not later than 1 year after the date of 
     enactment of the Student Loan Borrower Bill of Rights, the 
     activities described in subparagraphs (A), (B), and (C) of 
     section 433(e)(4) with respect to loans made under this 
     part.''.

     SEC. 4. KNOW BEFORE YOU OWE.

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

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

       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     creditor may issue funds, not to exceed the amount described 
     in subparagraph (A)(iii), with respect to an extension of 
     credit described in this subsection without obtaining from 
     the relevant institution of higher education such 
     institution's certification if such institution fails to 
     provide within 15 business days of the creditor's request for 
     such certification--
       ``(i) notification of the institution's refusal to certify 
     the request; or
       ``(ii) notification that the institution has received the 
     request for certification and will need additional time to 
     comply with the certification request.
       ``(C) Loans disbursed without certification.--If a creditor 
     issues funds without

[[Page 18528]]

     obtaining a certification, as described in subparagraph (B), 
     such creditor shall report the issuance of such funds in a 
     manner determined by the Director of the Consumer Financial 
     Protection Bureau.''; and
       (B) by adding at the end the following:
       ``(16) Provision of information.--
       ``(A) Provision of information to students.--
       ``(i) Loan statement.--A creditor that issues any funds 
     with respect to an extension of credit described in this 
     subsection shall send loan statements, where such loan is to 
     be used for a student, to borrowers of such funds not less 
     than once every 3 months during the time that such student is 
     enrolled at an institution of higher education.
       ``(ii) Contents of loan statement.--Each statement 
     described in clause (i) shall--

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

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

       ``(I) that the student who initiated the application for 
     the private education loan, or on whose behalf the 
     application was initiated, is enrolled or is scheduled to 
     enroll at the institution;
       ``(II) of such student's cost of attendance at the 
     institution as determined under part F of this title; and
       ``(III) of the difference between--

       ``(aa) the cost of attendance at the institution; and
       ``(bb) the student's estimated financial assistance 
     received under this title and other assistance known to the 
     institution, as applicable;
       ``(ii) notify the creditor that the institution has 
     received the request for certification and will need 
     additional time to comply with the certification request; or
       ``(iii) provide notice to the private educational lender of 
     the institution's refusal to certify the private education 
     loan under subparagraph (D).
       ``(B) With respect to a certification request described in 
     subparagraph (A), and prior to providing such certification 
     under subparagraph (A)(i) or providing notice of the refusal 
     to provide certification under subparagraph (A)(iii), the 
     institution shall--
       ``(i) determine whether the student who initiated the 
     application for the private education loan, or on whose 
     behalf the application was initiated, has applied for and 
     exhausted the Federal financial assistance available to such 
     student under this title and inform the student accordingly; 
     and
       ``(ii) provide the borrower whose loan application has 
     prompted the certification request by a private education 
     lender, as described in subparagraph (A)(i), with the 
     following information and disclosures:

       ``(I) The availability of, and the borrower's potential 
     eligibility for, Federal financial assistance under this 
     title, including disclosing the terms, conditions, interest 
     rates, and repayment options and programs of Federal student 
     loans.
       ``(II) The borrower's ability to select a private 
     educational lender of the borrower's choice.
       ``(III) The impact of a proposed private education loan on 
     the borrower's potential eligibility for other financial 
     assistance, including Federal financial assistance under this 
     title.
       ``(IV) The borrower's right to accept or reject a private 
     education loan within the 30-day period following a private 
     educational lender's approval of a borrower's application and 
     about a borrower's 3-day right to cancel period.

       ``(C) For purposes of this paragraph, the terms `private 
     educational lender' and `private education loan' have the 
     meanings given such terms in section 140 of the Truth in 
     Lending Act (15 U.S.C. 1650).
       ``(D)(i) An institution shall not provide a certification 
     with respect to a private education loan under this paragraph 
     unless the private education loan includes terms that 
     provide--
       ``(I) the borrower alternative repayment plans, including 
     loan consolidation or refinancing; and
       ``(II) that the liability to repay the loan shall be 
     cancelled upon the death or disability of the borrower or co-
     borrower.
       ``(ii) In this paragraph, the term `disability' means a 
     permanent and total disability, as determined in accordance 
     with the regulations of the Secretary of Education, or a 
     determination by the Secretary of Veterans that the borrower 
     is unemployable due to a service connected-disability.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the effective date of the regulations 
     described in subsection (a)(3).
       (3) Preferred lender arrangement.--Section 151(8)(A)(ii) of 
     the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii)) 
     is amended by inserting ``certifying,'' after ``promoting,''.
       (c) Report.--Not later than 24 months after the issuance of 
     regulations under subsection (a)(3), the Director of the 
     Consumer Financial Protection Bureau and the Secretary of 
     Education shall jointly submit to Congress a report on the 
     compliance of institutions of higher education and private 
     educational lenders with section 128(e)(3) of the Truth in 
     Lending Act (15 U.S.C. 1638(e)), as amended by subsection 
     (a), and section 487(a)(28) of the Higher Education Act of 
     1965 (20 U.S.C. 1094(a)), as amended by subsection (b). Such 
     report shall include information about the degree to which 
     specific institutions utilize certifications in effectively 
     encouraging the exhaustion of Federal student loan 
     eligibility and lowering student private education loan debt.

     SEC. 5. REPORT ON STUDENT LOAN SERVICERS.

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

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