Illinois General Assembly - Full Text of HB4397
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Full Text of HB4397  100th General Assembly




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1    AN ACT concerning education.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Student Loan Servicing Rights Act is amended
5by changing Section 1-5 as follows:
6    (110 ILCS 992/1-5)
7    (This Section may contain text from a Public Act with a
8delayed effective date)
9    Sec. 1-5. Definitions. As used in this Act:
10    "Applicant" means a person applying for a license pursuant
11to this Act.
12    "Borrower" or "student loan borrower" means a person who
13has received or agreed to pay a student loan for his or her own
14educational expenses.
15    "Cosigner" means a person who has agreed to share
16responsibility for repaying a student loan with a borrower.
17    "Department" means the Department of Financial and
18Professional Regulation.
19    "Division of Banking" means the Division of Banking of the
20Department of Financial and Professional Regulation.
21    "Federal loan borrower eligible for referral to a repayment
22specialist" means a borrower who possesses any of the following



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1        (1) requests information related to options to reduce
2    or suspend his or her monthly payment;
3        (2) indicates that he or she is experiencing or
4    anticipates experiencing financial hardship, distress, or
5    difficulty making his or her payments;
6        (3) has missed 2 consecutive monthly payments;
7        (4) is at least 75 days delinquent;
8        (5) is enrolled in a discretionary forbearance for more
9    than 9 of the previous 12 months;
10        (6) has rehabilitated or consolidated one or more loans
11    out of default within the past 12 months; or
12        (7) has not completed a course of study, as reflected
13    in the servicer's records, or the borrower identifies
14    himself or herself as not having completed a program of
15    study.
16    "Federal education loan" means any loan made, guaranteed,
17or insured under Title IV of the federal Higher Education Act
18of 1965.
19    "Income-driven payment plan certification" means the
20documentation related to a federal student loan borrower's
21income or financial status the borrower must submit to renew an
22income-driven repayment plan.
23    "Income-driven repayment options" includes the
24Income-Contingent Repayment Plan, the Income-Based Repayment
25Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn
26Plan, the Revised Pay As You Earn Plan, and any other federal



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1student loan repayment plan that is calculated based on a
2borrower's income.
3    "Licensee" means a person licensed pursuant to this Act.
4    "Other repayment plans" means the Standard Repayment Plan,
5the Graduated Repayment Plan, the Extended Repayment Plan, or
6any other federal student loan repayment plan not based on a
7borrower's income.
8    "Private loan borrower eligible for referral to a repayment
9specialist" means a borrower who possesses any of the following
11        (1) requests information related to options to reduce
12    or suspend his or her monthly payments; or
13        (2) indicates that he or she is experiencing or
14    anticipates experiencing financial hardship, distress, or
15    difficulty making his or her payments.
16    "Requester" means any borrower or cosigner that submits a
17request for assistance.
18    "Request for assistance" means all inquiries, complaints,
19account disputes, and requests for documentation a servicer
20receives from borrowers or cosigners.
21    "Secretary" means the Secretary of Financial and
22Professional Regulation, or his or her designee, including the
23Director of the Division of Banking of the Department of
24Financial and Professional Regulation.
25    "Servicing" means: (1) receiving any scheduled periodic
26payments from a student loan borrower or cosigner pursuant to



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1the terms of a student loan; (2) applying the payments of
2principal and interest and such other payments with respect to
3the amounts received from a student loan borrower or cosigner,
4as may be required pursuant to the terms of a student loan; and
5(3) performing other administrative services with respect to a
6student loan.
7    "Student loan" or "loan" means any federal education loan
8or other loan primarily for use to finance a postsecondary
9education and costs of attendance at a postsecondary
10institution, including, but not limited to, tuition, fees,
11books and supplies, room and board, transportation, and
12miscellaneous personal expenses. "Student loan" includes a
13loan made to refinance a student loan.
14    "Student loan" shall not include an extension of credit
15under an open-end consumer credit plan, a reverse mortgage
16transaction, a residential mortgage transaction, or any other
17loan that is secured by real property or a dwelling.
18    "Student loan" shall not include an extension of credit
19made by a postsecondary educational institution to a borrower
20if one of the following apply:
21        (1) The term of the extension of credit is no longer
22    than the borrower's education program.
23        (2) The remaining, unpaid principal balance of the
24    extension of credit is less than $1,500 at the time of the
25    borrower's graduation or completion of the program.
26        (3) The borrower fails to graduate or successfully



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1    complete his or her education program and has a balance due
2    at the time of his or her disenrollment from the
3    postsecondary institution.
4    "Student loan servicer" or "servicer" means any person
5engaged in the business of servicing student loans.
6    "Student loan servicer" shall not include:
7        (1) a bank, savings bank, savings association, or
8    credit union organized under the laws of the State or any
9    other state or under the laws of the United States;
10        (2) a wholly owned subsidiary of any bank, savings
11    bank, savings association, or credit union organized under
12    the laws of the State or any other state or under the laws
13    of the United States;
14        (3) an operating subsidiary where each owner of the
15    operating subsidiary is wholly owned by the same bank,
16    savings bank, savings association, or credit union
17    organized under the laws of the State or any other state or
18    under the laws of the United States;
19        (4) the Illinois Student Assistance Commission and its
20    agents when the agents are acting on the Illinois Student
21    Assistance Commission's behalf;
22        (5) a public postsecondary educational institution or
23    a private nonprofit postsecondary educational institution
24    servicing a student loan it extended to the borrower;
25        (6) a licensed debt management service under the Debt
26    Management Service Act, except to the extent that the



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1    organization acts as a subcontractor, affiliate, or
2    service provider for an entity that is otherwise subject to
3    licensure under this Act;
4        (7) any collection agency licensed under the
5    Collection Agency Act that is collecting post-default
6    debt;
7        (8) in connection with its responsibilities as a
8    guaranty agency engaged in default aversion, a State or
9    nonprofit private institution or organization having an
10    agreement with the U.S. Secretary of Education under
11    Section 428(b) of the Higher Education Act (20 U.S.C.
12    1078(B)); or
13        (9) a State institution or a nonprofit private
14    organization designated by a governmental entity to make or
15    service student loans, provided in each case that the
16    institution or organization services fewer than 20,000
17    student loan accounts of borrowers who reside in Illinois;
18    or .
19        (10) a law firm or licensed attorney that is collecting
20    post-default debt.
21(Source: P.A. 100-540, eff. 12-31-18.)
22    Section 99. Effective date. This Act takes effect December
2331, 2018.