102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3032

 

Introduced 1/5/2022, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Student Debt Assistance Act. Prohibits an institution of higher learning or a public or private entity that provides academic transcripts from (i) withholding academic transcripts from a current or former student because the student owes a debt to the institution, (ii) conditioning the provision of an academic transcript on the payment of a debt, other than a fee charged to provide the transcript, (iii) charging a higher fee to obtain an academic transcript or providing less favorable treatment of a request for an academic transcript because a current or former student owes a debt, or (iv) using academic transcript issuance as a tool for debt collection. Beginning with the 2022-2023 academic year, requires an institution of higher learning to make a good faith effort to offer a debt repayment plan to any student who owes a debt of $250 or more to the institution. Sets forth provisions concerning the debt repayment plan and enrollment procedures. Effective immediately.


LRB102 22166 CMG 31295 b

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

SB3032LRB102 22166 CMG 31295 b

1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Student Debt Assistance Act.
 
6    Section 5. Findings. The General Assembly makes all of the
7following findings:
8        (1) Student debt is a consistent and growing problem
9    in this State as well as nationwide. Due to unpaid tuition
10    and fees, colleges and universities in this State place
11    thousands of students on academic hold and often send the
12    uncollected student debt to collection agencies. Either of
13    these methods used by a college or university to collect
14    student debt leads to significant issues for students.
15    Being placed on academic hold prevents a student from
16    enrolling in additional courses of study or receiving the
17    student's academic transcript, which may prevent the
18    student from receiving a job promotion that may help the
19    student pay the student's debt to the college or
20    university.
21        (2) Student debt that is sent to a collection agency
22    often results in a student owing hundreds of dollars in
23    collection fees and negatively affects the student's

 

 

SB3032- 2 -LRB102 22166 CMG 31295 b

1    credit score. Additionally, sending a student's debt to a
2    collection agency is not an effective method to collect
3    unpaid student debt. In Ohio, a state with aggressive debt
4    collection practices, public universities were only able
5    to recover less than 7 cents of every dollar owed.
6        (3) Unpaid student debt presents an equity problem.
7    Unpaid student debt disproportionately impacts low-income
8    students and significantly affects students who attend
9    community colleges.
10        (4) This State and its institutions of higher learning
11    must do whatever is possible to prevent student debt from
12    being sent to collection agencies.
13        (5) This Act provides opportunities for students to
14    pay off their unpaid debts and to ensure that our
15    institutions of higher learning are doing their part to
16    assist students in these efforts.
 
17    Section 10. Definitions. In this Act:
18    "Academic hold" means any restriction imposed by an
19institution of higher learning to prevent a student from
20enrolling in courses of study or gaining access to the
21institution's services.
22    "Applicable provider" means an institution of higher
23learning or a public or private entity that is responsible for
24providing academic transcripts to a current or former student
25of an institution of higher learning.

 

 

SB3032- 3 -LRB102 22166 CMG 31295 b

1    "Debt" means any money, obligation, claim, or sum due or
2owing or alleged to be due or owing from a student to an
3institution of higher learning. "Debt" does not include the
4fee, if any, that is charged to students by an applicable
5provider for the actual cost of providing an academic
6transcript to a student.
7    "Financial evidence" means a bank statement, pay stubs,
8student loan approval, or other documentation used by a
9student to provide proof to an institution of higher learning
10that the student will be able to pay the tuition and mandatory
11fees for the next academic term.
12    "Good faith effort" means that an institution of higher
13learning has taken all necessary steps to contact a student
14concerning the student's delinquent debt and, if a student is
15eligible, has offered the student a debt repayment plan. A
16"good faith effort" to contact a student made by an
17institution of higher learning before sending the student's
18delinquent account to debt collection must include:
19        (1) making numerous attempts to contact the student
20    via phone or email;
21        (2) giving the student ample time to respond to the
22    final email or phone call, especially if the student
23    withdrew from the institution for a documented medical
24    reason or to take care of a family member; and
25        (3) giving the student ample time to return the
26    required paperwork if contact with the student is made

 

 

SB3032- 4 -LRB102 22166 CMG 31295 b

1    regarding the student's delinquent debt and a debt
2    repayment plan is offered to the student.
3    "Institution of higher learning" or "institution" has the
4meaning ascribed to that term in the Higher Education Student
5Assistance Act.
 
6    Section 15. Withholding of academic transcripts
7prohibited. After the effective date of this Act, an
8applicable provider may not do any of the following:
9        (1) Refuse to provide an academic transcript to a
10    current or former student on the grounds that the student
11    owes a debt.
12        (2) Condition the provision of an academic transcript
13    on the payment of a debt, other than a fee charged to
14    provide the transcript.
15        (3) Charge a higher fee for obtaining an academic
16    transcript or provide less favorable treatment of a
17    request for an academic transcript because a current or
18    former student owes a debt.
19        (4) Use academic transcript issuance as a tool for
20    debt collection.
 
21    Section 20. Higher education debt repayment plan.
22    (a) To provide students with an opportunity to pay off
23debt they owe to an institution of higher learning, beginning
24with the 2022-2023 academic year, an institution of higher

 

 

SB3032- 5 -LRB102 22166 CMG 31295 b

1learning must make a good faith effort to offer a debt
2repayment plan to any student who owes a debt of $250 or more
3to the institution. A debt repayment plan offered by an
4institution of higher learning must satisfy the following
5requirements:
6        (1) If the amount of the student's debt is less than or
7    equal to $2,500, the student must be offered the option of
8    at least a 3-month, 6-month, 9-month, 12-month, or
9    18-month debt repayment plan.
10        (2) If the amount of the student's debt is more than
11    $2,500, the student must be offered the option of at least
12    a 6-month, 9-month, 12-month, 24-month, or 36-month debt
13    repayment plan.
14        (3) All late fees or past-due fees incurred by a
15    student that remain unpaid on the date the student enters
16    into the debt repayment plan with the institution of
17    higher learning must be waived by the institution.
18        (4) An institution of higher learning may use a
19    third-party entity to assist in setting up and
20    administering debt repayment plans; however, neither the
21    institution of higher learning nor the third-party entity
22    may charge the student interest on the amount of debt owed
23    under the debt repayment plan. Neither the institution nor
24    the third-party entity may charge the student more than
25    $50 in fees to set up and administer the debt repayment
26    plan.

 

 

SB3032- 6 -LRB102 22166 CMG 31295 b

1        (5) An institution of higher learning or a third-party
2    entity that administers an institution's debt repayment
3    plans may not charge a student any fee or prepayment
4    penalty for the early repayment of the debt under the debt
5    repayment plan.
6        (6) If a student enters into a debt repayment plan,
7    the institution of higher learning or third-party entity
8    must offer the student an option to renegotiate the debt
9    repayment plan for a longer time period if the student can
10    provide financial evidence that the student is not able to
11    make the required payments due to unforeseen medical,
12    travel, or cost-of-living expenses. The student may
13    renegotiate only for time periods offered by the
14    applicable provider.
15        (7) A student may not have more than one active debt
16    repayment plan at a time for a past-due debt with an
17    institution of higher learning or a third-party entity
18    that administers an institution's debt repayment plans.
19        (8) If a student makes a payment of less than the
20    negotiated monthly payment amount and fails to submit the
21    remainder of the negotiated monthly payment due before the
22    end of the applicable month, then the payment made shall
23    be considered to be a missed payment for that month and
24    shall be designated as such. The student may request that
25    the institution of higher learning or third-party entity
26    remove the designation if the student can provide

 

 

SB3032- 7 -LRB102 22166 CMG 31295 b

1    financial evidence that the student was unable to fully
2    pay the negotiated monthly payment amount as a result of
3    unforeseen medical, travel, or cost-of-living expenses.
4    (b) If a student who is eligible under subsection (a)
5enters into a debt repayment plan with an institution of
6higher learning but fails to make 3 consecutive monthly
7payments, the institution of higher learning may initiate the
8process to send the remaining debt owed by the student to a
9collection agency. Prior to sending the student's debt to a
10collection agency, the institution must make a good faith
11effort to inform the student that the institution will be
12sending the student's debt to a collection agency unless the
13student begins to make payments again. The institution shall
14allow the student to appeal the institution's decision to send
15the debt to a collection agency. The student may also provide
16financial evidence to the institution to explain why the
17student has stopped making the debt payments.
18    (c) Any applicable provider to which a student owes a debt
19of less than $250 must make a good faith effort to contact and
20inform the student of the debt.
 
21    Section 25. Enrollment procedures for a student who owes
22debt.
23    (a) Beginning with the 2022-2023 academic year, an
24institution of higher learning may not place a student on
25academic hold and must allow the student to continue to enroll

 

 

SB3032- 8 -LRB102 22166 CMG 31295 b

1in courses of study if:
2        (1) the student has entered into a debt repayment plan
3    with the institution of higher learning;
4        (2) the debt owed by the student is less than $2,500;
5    and
6        (3) the student provides financial evidence that the
7    student will not be accruing additional debt.
8    Any financial evidence requested by an institution under
9this subsection (a) must be of a nature that is easily
10accessible to the student and must not be overly burdensome to
11acquire. A student under this subsection (a) must provide
12financial evidence to the institution's office of financial
13aid or bursar's office. A student's financial evidence may be
14re-evaluated by the institution every academic term for as
15long as the student continues to owe debt to the institution.
16    (b) An institution of higher learning may not consider
17applying for or receiving student loan assistance as adding
18additional debt under subsection (a).
19    (c) If an institution of higher learning deems a student's
20financial evidence under subsection (a) insufficient, the
21student may appeal the institution's decision. The appeal
22process shall include a meeting with the institution's office
23of financial aid or bursar's office or another relevant
24department to discuss potential solutions that will allow the
25student to be eligible to enroll in additional courses of
26study. If, after the appeal process, the student's financial

 

 

SB3032- 9 -LRB102 22166 CMG 31295 b

1evidence is still deemed insufficient, the student may request
2a new appeal or provide new financial evidence once each
3academic term.
4    (d) Once a student pays a debt owed to an institution of
5higher learning, the institution may no longer request
6financial evidence from the student unless the student
7continues to meet the requirements under subsection (a).
8    (e) A student under subsection (a) who is allowed to
9enroll in additional courses of study but fails to make 2
10consecutive monthly payments under a debt repayment plan with
11the institution may be placed on academic hold by the
12institution until the student makes payments again. The
13institution shall allow the student to appeal the academic
14hold. In its discretion, the institution may remove the
15academic hold.
16    (f) If a student meets the eligibility requirements in
17subsection (a), enrolls in additional courses, and accrues
18additional debt in a subsequent semester or term, the
19institution of higher learning or third-party entity that
20administers an institution's debt repayment plan must give the
21student the ability to renegotiate the student's debt
22repayment plan to include the additional debt. If the
23additional debt added to the debt repayment plan causes the
24student to owe $2,500 or more in debt, the institution of
25higher learning may place the student on academic hold until
26the student meets the eligibility requirements in subsection

 

 

SB3032- 10 -LRB102 22166 CMG 31295 b

1(a) again.
2    (g) A student may not have more than one active debt
3repayment plan at a time for a past-due debt with an
4institution of higher learning or a third-party entity that
5administers an institution's debt repayment plans.
 
6    Section 30. Applicability. Nothing in this Act preempts an
7institution of higher learning's ability to offer or prevents
8an institution from offering any kind of financial aid to a
9student for the purpose of keeping the student out of debt.
10Nothing in this Act prevents an institution of higher learning
11from forgiving a student's debt.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.