Full Text of HB2685 101st General Assembly
HB2685eng 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Student Loan Investment Act. | 6 | | Section 5. Findings and purpose. The General Assembly finds | 7 | | that it is vital for the State to combat the college-debt | 8 | | crisis and increase access to post-secondary education for all | 9 | | residents of this State. The purpose of this Act is to assist | 10 | | qualified residents to attend and pay for post-secondary | 11 | | education through a system of investment programs, which may | 12 | | include income-sharing agreements, linked deposits, and | 13 | | origination and refinancing of student loans. | 14 | | Section 10. Definitions.
As used in this Act: | 15 | | "Borrower" means an Illinois resident student who has | 16 | | received an education loan or an Illinois resident parent who | 17 | | has received or agreed to pay an education loan, subject to | 18 | | approval by the State Treasurer.
| 19 | | "Education loan" means a loan made to a borrower in | 20 | | accordance with this Act to finance an Illinois resident | 21 | | student's attendance at an institution of higher education. | 22 | | "Education loan" also includes Income Share Agreements.
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| 1 | | "Income share agreement" means an agreement between a | 2 | | borrower and an eligible lender approved by the State Treasurer | 3 | | in which the borrower agrees to pay a percentage of the | 4 | | borrower's future earnings for a fixed period in exchange for | 5 | | funds to pay for their post-secondary education.
| 6 | | "Institution of higher education" means a post-secondary | 7 | | educational institution located in Illinois and approved by the | 8 | | State Treasurer.
| 9 | | "Student Investment Account" means that portion of the | 10 | | Treasurer's State Investment Portfolio described in Section 15 | 11 | | this Act.
| 12 | | Section 15. Establishment of Student Investment Account. | 13 | | The State Treasurer may allocate up to 5% of the Treasurer's | 14 | | State Investment Portfolio (State Investment Portfolio) to the | 15 | | Student Investment Account. The 5% cap shall be calculated | 16 | | based on: (1) the balance of the State Investment Portfolio at | 17 | | the inception of the State's fiscal year; or (2) the average | 18 | | balance of the State Investment Portfolio in the immediately | 19 | | preceding 5 fiscal years, whichever number is greater. Earnings | 20 | | on the investments in the Student Investment Account may be | 21 | | reinvested into the Student Investment Account without being | 22 | | counted against the 5% cap. | 23 | | Section 20. Operation of the Student Investment Account. | 24 | | The State Treasurer may: originate, guarantee, acquire, and |
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| 1 | | service education loans; facilitate such arrangements between | 2 | | borrowers and eligible lenders; and perform such other acts as | 3 | | may be necessary or desirable in connection with the education | 4 | | loans. The State Treasurer may receive, hold, and invest moneys | 5 | | paid into the Student Investment Account and take such other | 6 | | actions as are necessary to operate the Student Investment | 7 | | Account. The State Treasurer may invest in, and enter into | 8 | | contracts with, institutions that provide education loans. The | 9 | | State Treasurer may also: enter into Income Share Agreements | 10 | | with borrowers; facilitate such arrangements between borrowers | 11 | | and eligible lenders; and perform such other acts as may be | 12 | | necessary or desirable in connection with such Income Share | 13 | | Agreements. The State Treasurer may also deposit funds with | 14 | | financial institutions that provide education loans. | 15 | | Section 25. Administration of the Student Investment | 16 | | Account. The State Treasurer may enter into such contracts and | 17 | | guarantee agreements as are necessary to operate the Student | 18 | | Investment Account with eligible lenders, financial | 19 | | institutions, institutions of higher education, individuals, | 20 | | corporations, and qualified loan origination and servicing | 21 | | organizations and with any governmental entity and with any | 22 | | agency or instrumentality of the United States. The State | 23 | | Treasurer is authorized to establish specific criteria | 24 | | governing the eligibility of entities to participate in its | 25 | | programs, the making of education loans, provisions for |
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| 1 | | default, the establishment of default reserve funds, the | 2 | | purchase of default insurance, the provision of prudent debt | 3 | | service reserves, and the furnishing by participating entities | 4 | | of such additional guarantees of the education loans as the | 5 | | State Treasurer shall determine. | 6 | | Section 30. Fees. The State Treasurer shall establish fees | 7 | | to cover the costs of administration, recordkeeping, | 8 | | marketing, and investment management related to the Student | 9 | | Investment Account. The State Treasurer may pay eligible | 10 | | lenders, financial institutions, institutions of higher | 11 | | education, individuals, corporations, qualified loan | 12 | | origination and servicing organizations, governmental | 13 | | entities, and any agencies or instrumentalities of the United | 14 | | States an administrative fee in connection with services | 15 | | provided pursuant to the Student Investment Account in such | 16 | | amounts, at such times, and in such manner as may be prescribed | 17 | | by the State Treasurer. | 18 | | Section 35. Insurance. The State Treasurer may charge and | 19 | | collect premiums for insurance on education loans and other | 20 | | related charges and pay such insurance premiums or a portion | 21 | | thereof and other charges as are prudent. | 22 | | Section 40. Wage deductions. The State Treasurer may deduct | 23 | | from the salary, wages, commissions, and bonuses of any |
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| 1 | | employee in this State and, to the extent permitted by the laws | 2 | | of the United States and individual states in which an employee | 3 | | might reside, any employee outside the State of Illinois by | 4 | | serving a notice of administrative wage garnishment on an | 5 | | employer, in accordance with rules adopted by the State | 6 | | Treasurer, for the recovery of an education loan debt owned or | 7 | | serviced by the State Treasurer. Levy must not be made until | 8 | | the State Treasurer has caused a demand to be made on the | 9 | | employee, in a manner consistent with rules adopted by the | 10 | | State Treasurer, such that the employee is provided an | 11 | | opportunity to contest the existence or amount of the education | 12 | | loan obligation. | 13 | | Section 45. Investment policy. The State Treasurer shall | 14 | | develop, publish, and implement one or more investment policies | 15 | | covering the investment of moneys in accordance with this Act. | 16 | | Section 50. Student Investment Account Administrative | 17 | | Fund. The Student Investment Account Administrative Fund | 18 | | (Administrative Fund) is created as a special fund outside the | 19 | | State treasury with the State Treasurer as custodian. Moneys in | 20 | | the Administrative Fund may be used by the State Treasurer to | 21 | | pay expenses related to all aspects of operation and | 22 | | administration of the Student Investment Account. The State | 23 | | Treasurer may deposit a portion of the earnings of the | 24 | | investments in the Student Investment Account and a portion of |
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| 1 | | any administrative fees, and the proceeds thereof, collected | 2 | | pursuant to Section 30 into the Administrative Fund. | 3 | | Section 55. Student Investment Account Loss Reserve Fund. | 4 | | The Student Investment Account Loss Reserve Fund (Loss Reserve | 5 | | Fund) may be created as a special fund outside the State | 6 | | treasury with the State Treasurer as custodian. Moneys in the | 7 | | Loss Reserve Fund may be used by the State Treasurer to | 8 | | establish loss reserve funds. The State Treasurer may deposit a | 9 | | portion of the earnings of the investments in the Student | 10 | | Investment Account and a portion of any administrative fees, | 11 | | and the proceeds thereof, collected pursuant to Section 30 into | 12 | | the Loss Reserve Fund. | 13 | | Section 60. Student Investment Account Assistance Fund. | 14 | | The Student Investment Account Assistance Fund (Assistance | 15 | | Fund) may be created as a special fund outside the State | 16 | | treasury with the State Treasurer as custodian. Moneys in the | 17 | | Assistance Fund may be used by the State Treasurer to provide | 18 | | assistance to qualifying borrowers. The State Treasurer may | 19 | | deposit a portion of the earnings of the investments in the | 20 | | Student Investment Account and a portion of any administrative | 21 | | fees, and the proceeds thereof, collected pursuant to Section | 22 | | 30 into the Assistance Fund. | 23 | | Section 65. Rules. The State Treasurer may adopt rules he |
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| 1 | | or she deems necessary or desirable to implement and administer | 2 | | this Act. | 3 | | Section 900. The Deposit of State Moneys Act is amended by | 4 | | changing Section 22.5 as follows:
| 5 | | (15 ILCS 520/22.5) (from Ch. 130, par. 41a)
| 6 | | (For force and effect of certain provisions, see Section 90 | 7 | | of P.A. 94-79) | 8 | | Sec. 22.5. Permitted investments. The State Treasurer may, | 9 | | with the
approval of the Governor, invest and reinvest any | 10 | | State money in the treasury
which is not needed for current | 11 | | expenditures due or about to become due, in
obligations of the | 12 | | United States government or its agencies or of National
| 13 | | Mortgage Associations established by or under the National | 14 | | Housing Act, 12 1201
U.S.C. 1701 et seq., or
in mortgage | 15 | | participation certificates representing undivided interests in
| 16 | | specified, first-lien conventional residential Illinois | 17 | | mortgages that are
underwritten, insured, guaranteed, or | 18 | | purchased by the Federal Home Loan
Mortgage Corporation or in | 19 | | Affordable Housing Program Trust Fund Bonds or
Notes as defined | 20 | | in and issued pursuant to the Illinois Housing Development
Act. | 21 | | All such obligations shall be considered as cash and may
be | 22 | | delivered over as cash by a State Treasurer to his successor.
| 23 | | The State Treasurer may, with the approval of the Governor, | 24 | | purchase
any state bonds with any money in the State Treasury |
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| 1 | | that has been set
aside and held for the payment of the | 2 | | principal of and interest on the
bonds. The bonds shall be | 3 | | considered as cash and may be delivered over
as cash by the | 4 | | State Treasurer to his successor.
| 5 | | The State Treasurer may, with the approval of the Governor, | 6 | | invest or
reinvest any State money in the treasury that is not | 7 | | needed for
current expenditure due or about to become due, or | 8 | | any money in the
State Treasury that has been set aside and | 9 | | held for the payment of the
principal of and the interest on | 10 | | any State bonds, in shares,
withdrawable accounts, and | 11 | | investment certificates of savings and
building and loan | 12 | | associations, incorporated under the laws of this
State or any | 13 | | other state or under the laws of the United States;
provided, | 14 | | however, that investments may be made only in those savings
and | 15 | | loan or building and loan associations the shares and | 16 | | withdrawable
accounts or other forms of investment securities | 17 | | of which are insured
by the Federal Deposit Insurance | 18 | | Corporation.
| 19 | | The State Treasurer may not invest State money in any | 20 | | savings and
loan or building and loan association unless a | 21 | | commitment by the savings
and loan (or building and loan) | 22 | | association, executed by the president
or chief executive | 23 | | officer of that association, is submitted in the
following | 24 | | form:
| 25 | | The .................. Savings and Loan (or Building | 26 | | and Loan)
Association pledges not to reject arbitrarily |
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| 1 | | mortgage loans for
residential properties within any | 2 | | specific part of the community served
by the savings and | 3 | | loan (or building and loan) association because of
the | 4 | | location of the property. The savings and loan (or building | 5 | | and
loan) association also pledges to make loans available | 6 | | on low and
moderate income residential property throughout | 7 | | the community within
the limits of its legal restrictions | 8 | | and prudent financial practices.
| 9 | | The State Treasurer may, with the approval of the Governor, | 10 | | invest or
reinvest, at a price not to exceed par, any State | 11 | | money in the treasury
that is not needed for current | 12 | | expenditures due or about to become
due, or any money in the | 13 | | State Treasury that has been set aside and
held for the payment | 14 | | of the principal of and interest on any State
bonds, in bonds | 15 | | issued by counties or municipal corporations of the
State of | 16 | | Illinois.
| 17 | | The State Treasurer may, with the approval of the Governor, | 18 | | invest or
reinvest any State money in the Treasury which is not | 19 | | needed for current
expenditure, due or about to become due, or | 20 | | any money in the State Treasury
which has been set aside and | 21 | | held for the payment of the principal of and
the interest on | 22 | | any State bonds, in participations in loans, the principal
of | 23 | | which participation is fully guaranteed by an agency or | 24 | | instrumentality
of the United States government; provided, | 25 | | however, that such loan
participations are represented by | 26 | | certificates issued only by banks which
are incorporated under |
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| 1 | | the laws of this State or any other state
or under the laws of | 2 | | the United States, and such banks, but not
the loan | 3 | | participation certificates, are insured by the Federal Deposit
| 4 | | Insurance Corporation.
| 5 | | Whenever the total amount of vouchers presented to the | 6 | | Comptroller under Section 9 of the State Comptroller Act | 7 | | exceeds the funds available in the General Revenue Fund by | 8 | | $1,000,000,000 or more, then the State Treasurer may invest any | 9 | | State money in the Treasury, other than money in the General | 10 | | Revenue Fund, Health Insurance Reserve Fund, Attorney General | 11 | | Court Ordered and Voluntary Compliance Payment Projects Fund, | 12 | | Attorney General Whistleblower Reward and Protection Fund, and | 13 | | Attorney General's State Projects and Court Ordered | 14 | | Distribution Fund, which is not needed for current | 15 | | expenditures, due or about to become due, or any money in the | 16 | | State Treasury which has been set aside and held for the | 17 | | payment of the principal of and the interest on any State bonds | 18 | | with the Office of the Comptroller in order to enable the | 19 | | Comptroller to pay outstanding vouchers. At any time, and from | 20 | | time to time outstanding, such investment shall not be greater | 21 | | than $2,000,000,000. Such investment shall be deposited into | 22 | | the General Revenue Fund or Health Insurance Reserve Fund as | 23 | | determined by the Comptroller. Such investment shall be repaid | 24 | | by the Comptroller with an interest rate tied to the London | 25 | | Interbank Offered Rate (LIBOR) or the Federal Funds Rate or an | 26 | | equivalent market established variable rate, but in no case |
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| 1 | | shall such interest rate exceed the lesser of the penalty rate | 2 | | established under the State Prompt Payment Act or the timely | 3 | | pay interest rate under Section 368a of the Illinois Insurance | 4 | | Code. The State Treasurer and the Comptroller shall enter into | 5 | | an intergovernmental agreement to establish procedures for | 6 | | such investments, which market established variable rate to | 7 | | which the interest rate for the investments should be tied, and | 8 | | other terms which the State Treasurer and Comptroller | 9 | | reasonably believe to be mutually beneficial concerning these | 10 | | investments by the State Treasurer. The State Treasurer and | 11 | | Comptroller shall also enter into a written agreement for each | 12 | | such investment that specifies the period of the investment, | 13 | | the payment interval, the interest rate to be paid, the funds | 14 | | in the Treasury from which the Treasurer will draw the | 15 | | investment, and other terms upon which the State Treasurer and | 16 | | Comptroller mutually agree. Such investment agreements shall | 17 | | be public records and the State Treasurer shall post the terms | 18 | | of all such investment agreements on the State Treasurer's | 19 | | official website. In compliance with the intergovernmental | 20 | | agreement, the Comptroller shall order and the State Treasurer | 21 | | shall transfer amounts sufficient for the payment of principal | 22 | | and interest invested by the State Treasurer with the Office of | 23 | | the Comptroller under this paragraph from the General Revenue | 24 | | Fund or the Health Insurance Reserve Fund to the respective | 25 | | funds in the Treasury from which the State Treasurer drew the | 26 | | investment. Public Act 100-1107 This amendatory Act of the |
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| 1 | | 100th General Assembly shall constitute an irrevocable and | 2 | | continuing authority for all amounts necessary for the payment | 3 | | of principal and interest on the investments made with the | 4 | | Office of the Comptroller by the State Treasurer under this | 5 | | paragraph, and the irrevocable and continuing authority for and | 6 | | direction to the Comptroller and Treasurer to make the | 7 | | necessary transfers. | 8 | | The State Treasurer may, with the approval of the Governor, | 9 | | invest or
reinvest any State money in the Treasury that is not | 10 | | needed for current
expenditure, due or about to become due, or | 11 | | any money in the State Treasury
that has been set aside and | 12 | | held for the payment of the principal of and
the interest on | 13 | | any State bonds, in any of the following:
| 14 | | (1) Bonds, notes, certificates of indebtedness, | 15 | | Treasury bills, or other
securities now or hereafter issued | 16 | | that are guaranteed by the full faith
and credit of the | 17 | | United States of America as to principal and interest.
| 18 | | (2) Bonds, notes, debentures, or other similar | 19 | | obligations of the United
States of America, its agencies, | 20 | | and instrumentalities.
| 21 | | (2.5) Bonds, notes, debentures, or other similar | 22 | | obligations of a
foreign government, other than the | 23 | | Republic of the Sudan, that are guaranteed by the full | 24 | | faith and credit of that
government as to principal and | 25 | | interest, but only if the foreign government
has not | 26 | | defaulted and has met its payment obligations in a timely |
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| 1 | | manner on
all similar obligations for a period of at least | 2 | | 25 years immediately before
the time of acquiring those | 3 | | obligations.
| 4 | | (3) Interest-bearing savings accounts, | 5 | | interest-bearing certificates of
deposit, interest-bearing | 6 | | time deposits, or any other investments
constituting | 7 | | direct obligations of any bank as defined by the Illinois
| 8 | | Banking Act.
| 9 | | (4) Interest-bearing accounts, certificates of | 10 | | deposit, or any other
investments constituting direct | 11 | | obligations of any savings and loan
associations | 12 | | incorporated under the laws of this State or any other | 13 | | state or
under the laws of the United States.
| 14 | | (5) Dividend-bearing share accounts, share certificate | 15 | | accounts, or
class of share accounts of a credit union | 16 | | chartered under the laws of this
State or the laws of the | 17 | | United States; provided, however, the principal
office of | 18 | | the credit union must be located within the State of | 19 | | Illinois.
| 20 | | (6) Bankers' acceptances of banks whose senior | 21 | | obligations are rated in
the top 2 rating categories by 2 | 22 | | national rating agencies and maintain that
rating during | 23 | | the term of the investment.
| 24 | | (7) Short-term obligations of either corporations or | 25 | | limited liability companies organized in the United
States | 26 | | with assets exceeding $500,000,000 if (i) the obligations |
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| 1 | | are rated
at the time of purchase at one of the 3 highest | 2 | | classifications established
by at least 2 standard rating | 3 | | services and mature not later than 270
days from the date | 4 | | of purchase, (ii) the purchases do not exceed 10% of
the | 5 | | corporation's or the limited liability company's | 6 | | outstanding obligations, (iii) no more than one-third of
| 7 | | the public agency's funds are invested in short-term | 8 | | obligations of
either corporations or limited liability | 9 | | companies, and (iv) the corporation or the limited | 10 | | liability company has not been placed on the list of | 11 | | restricted companies by the Illinois Investment Policy | 12 | | Board under Section 1-110.16 of the Illinois Pension Code.
| 13 | | (7.5) Obligations of either corporations or limited | 14 | | liability companies organized in the United States, that | 15 | | have a significant presence in this State, with assets | 16 | | exceeding $500,000,000 if: (i) the obligations are rated at | 17 | | the time of purchase at one of the 3 highest | 18 | | classifications established by at least 2 standard rating | 19 | | services and mature more than 270 days, but less than 5 | 20 | | years, from the date of purchase; (ii) the purchases do not | 21 | | exceed 10% of the corporation's or the limited liability | 22 | | company's outstanding obligations; (iii) no more than 5% of | 23 | | the public agency's funds are invested in such obligations | 24 | | of corporations or limited liability companies; and (iv) | 25 | | the corporation or the limited liability company has not | 26 | | been placed on the list of restricted companies by the |
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| 1 | | Illinois Investment Policy Board under Section 1-110.16 of | 2 | | the Illinois Pension Code. The authorization of the | 3 | | Treasurer to invest in new obligations under this paragraph | 4 | | shall expire on June 30, 2019. | 5 | | (8) Money market mutual funds registered under the | 6 | | Investment Company
Act of 1940, provided that the portfolio | 7 | | of the money market mutual fund is
limited to obligations | 8 | | described in this Section and to agreements to
repurchase | 9 | | such obligations.
| 10 | | (9) The Public Treasurers' Investment Pool created | 11 | | under Section 17 of
the State Treasurer Act or in a fund | 12 | | managed, operated, and administered by
a bank.
| 13 | | (10) Repurchase agreements of government securities | 14 | | having the meaning
set out in the Government Securities Act | 15 | | of 1986, as now or hereafter amended or succeeded, subject | 16 | | to the provisions
of that Act and the regulations issued | 17 | | thereunder.
| 18 | | (11) Investments made in accordance with the | 19 | | Technology Development
Act.
| 20 | | (12) Investments made in accordance with the Student | 21 | | Loan Investment Act. | 22 | | For purposes of this Section, "agencies" of the United | 23 | | States
Government includes:
| 24 | | (i) the federal land banks, federal intermediate | 25 | | credit banks, banks for
cooperatives, federal farm credit | 26 | | banks, or any other entity authorized
to issue debt |
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| 1 | | obligations under the Farm Credit Act of 1971 (12 U.S.C. | 2 | | 2001
et seq.) and Acts amendatory thereto;
| 3 | | (ii) the federal home loan banks and the federal home | 4 | | loan
mortgage corporation;
| 5 | | (iii) the Commodity Credit Corporation; and
| 6 | | (iv) any other agency created by Act of Congress.
| 7 | | The Treasurer may, with the approval of the Governor, lend | 8 | | any securities
acquired under this Act. However, securities may | 9 | | be lent under this Section
only in accordance with Federal | 10 | | Financial Institution Examination Council
guidelines and only | 11 | | if the securities are collateralized at a level sufficient
to | 12 | | assure the safety of the securities, taking into account market | 13 | | value
fluctuation. The securities may be collateralized by cash | 14 | | or collateral
acceptable under Sections 11 and 11.1.
| 15 | | (Source: P.A. 99-856, eff. 8-19-16; 100-1107, eff. 8-27-18; | 16 | | revised 9-27-18.)
| 17 | | Section 905. The Student Loan Servicing Rights Act is | 18 | | amended by changing Section 1-5 as follows: | 19 | | (110 ILCS 992/1-5)
| 20 | | Sec. 1-5. Definitions. As used in this Act: | 21 | | "Applicant" means a person applying for a license pursuant | 22 | | to this Act. | 23 | | "Borrower" or "student loan borrower" means a person who | 24 | | has received or agreed to pay a student loan for his or her own |
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| 1 | | educational expenses. | 2 | | "Cosigner" means a person who has agreed to share | 3 | | responsibility for repaying a student loan with a borrower. | 4 | | "Department" means the Department of Financial and | 5 | | Professional Regulation. | 6 | | "Division of Banking" means the Division of Banking of the | 7 | | Department of Financial and Professional Regulation. | 8 | | "Federal loan borrower eligible for referral to a repayment | 9 | | specialist" means a borrower who possesses any of the following | 10 | | characteristics: | 11 | | (1) requests information related to options to reduce | 12 | | or suspend his or her monthly payment; | 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 | | (3) has missed 2 consecutive monthly payments; | 17 | | (4) is at least 75 days delinquent; | 18 | | (5) is enrolled in a discretionary forbearance for more | 19 | | than 9 of the previous 12 months; | 20 | | (6) has rehabilitated or consolidated one or more loans | 21 | | out of default within the past 12 months; or | 22 | | (7) has not completed a course of study, as reflected | 23 | | in the servicer's records, or the borrower identifies | 24 | | himself or herself as not having completed a program of | 25 | | study. | 26 | | "Federal education loan" means any loan made, guaranteed, |
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| 1 | | or insured under Title IV of the federal Higher Education Act | 2 | | of 1965. | 3 | | "Income-driven payment plan certification" means the | 4 | | documentation related to a federal student loan borrower's | 5 | | income or financial status the borrower must submit to renew an | 6 | | income-driven repayment plan. | 7 | | "Income-driven repayment options" includes the | 8 | | Income-Contingent Repayment Plan, the Income-Based Repayment | 9 | | Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn | 10 | | Plan, the Revised Pay As You Earn Plan, and any other federal | 11 | | student loan repayment plan that is calculated based on a | 12 | | borrower's income. | 13 | | "Licensee" means a person licensed pursuant to this Act. | 14 | | "Other repayment plans" means the Standard Repayment Plan, | 15 | | the Graduated Repayment Plan, the Extended Repayment Plan, or | 16 | | any other federal student loan repayment plan not based on a | 17 | | borrower's income. | 18 | | "Private loan borrower eligible for referral to a repayment | 19 | | specialist" means a borrower who possesses any of the following | 20 | | characteristics: | 21 | | (1) requests information related to options to reduce | 22 | | or suspend his or her monthly payments; or | 23 | | (2) indicates that he or she is experiencing or | 24 | | anticipates experiencing financial hardship, distress, or | 25 | | difficulty making his or her payments. | 26 | | "Requester" means any borrower or cosigner that submits a |
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| 1 | | request for assistance. | 2 | | "Request for assistance" means all inquiries, complaints, | 3 | | account disputes, and requests for documentation a servicer | 4 | | receives from borrowers or cosigners. | 5 | | "Secretary" means the Secretary of Financial and | 6 | | Professional Regulation, or his or her designee, including the | 7 | | Director of the Division of Banking of the Department of | 8 | | Financial and Professional Regulation. | 9 | | "Servicing" means: (1) receiving any scheduled periodic | 10 | | payments from a student loan borrower or cosigner pursuant to | 11 | | the terms of a student loan; (2) applying the payments of | 12 | | principal and interest and such other payments with respect to | 13 | | the amounts received from a student loan borrower or cosigner, | 14 | | as may be required pursuant to the terms of a student loan; and | 15 | | (3) performing other administrative services with respect to a | 16 | | student loan. | 17 | | "Student loan" or "loan" means any federal education loan | 18 | | or other loan primarily for use to finance a postsecondary | 19 | | education and costs of attendance at a postsecondary | 20 | | institution, including, but not limited to, tuition, fees, | 21 | | books and supplies, room and board, transportation, and | 22 | | miscellaneous personal expenses. "Student loan" includes a | 23 | | loan made to refinance a student loan. | 24 | | "Student loan" shall not include an extension of credit | 25 | | under an open-end consumer credit plan, a reverse mortgage | 26 | | transaction, a residential mortgage transaction, or any other |
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| 1 | | loan that is secured by real property or a dwelling. | 2 | | "Student loan" shall not include an extension of credit | 3 | | made by a postsecondary educational institution to a borrower | 4 | | if one of the following apply: | 5 | | (1) The term of the extension of credit is no longer | 6 | | than the borrower's education program. | 7 | | (2) The remaining, unpaid principal balance of the | 8 | | extension of credit is less than $1,500 at the time of the | 9 | | borrower's graduation or completion of the program. | 10 | | (3) The borrower fails to graduate or successfully | 11 | | complete his or her education program and has a balance due | 12 | | at the time of his or her disenrollment from the | 13 | | postsecondary institution. | 14 | | "Student loan servicer" or "servicer" means any person | 15 | | engaged in the business of servicing student loans. | 16 | | "Student loan servicer" shall not include: | 17 | | (1) a bank, savings bank, savings association, or | 18 | | credit union organized under the laws of the State or any | 19 | | other state or under the laws of the United States; | 20 | | (2) a wholly owned subsidiary of any bank, savings | 21 | | bank, savings association, or credit union organized under | 22 | | the laws of the State or any other state or under the laws | 23 | | of the United States; | 24 | | (3) an operating subsidiary where each owner of the | 25 | | operating subsidiary is wholly owned by the same bank, | 26 | | savings bank, savings association, or credit union |
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| 1 | | organized under the laws of the State or any other state or | 2 | | under the laws of the United States; | 3 | | (4) the Illinois Student Assistance Commission and its | 4 | | agents when the agents are acting on the Illinois Student | 5 | | Assistance Commission's behalf; | 6 | | (5) a public postsecondary educational institution or
| 7 | | a private nonprofit postsecondary educational institution
| 8 | | servicing a student loan it extended to the borrower; | 9 | | (6) a licensed debt management service under the Debt
| 10 | | Management Service Act, except to the extent that the
| 11 | | organization acts as a subcontractor, affiliate, or
| 12 | | service provider for an entity that is otherwise subject to | 13 | | licensure under this Act; | 14 | | (7) any collection agency licensed under the
| 15 | | Collection Agency Act that is collecting post-default
| 16 | | debt; | 17 | | (8) in connection with its responsibilities as a | 18 | | guaranty agency engaged in default aversion, a State or | 19 | | nonprofit private institution or organization having an | 20 | | agreement with the U.S. Secretary of Education under | 21 | | Section 428(b) of the Higher Education Act (20 U.S.C. | 22 | | 1078(B));
| 23 | | (9) a State institution or a nonprofit private | 24 | | organization designated by a governmental entity to make or | 25 | | service student loans, provided in each case that the | 26 | | institution or organization services fewer than 20,000 |
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| 1 | | student loan accounts of borrowers who reside in Illinois; | 2 | | or
| 3 | | (10) a law firm or licensed attorney that is collecting | 4 | | post-default debt ; or . | 5 | | (11) the State Treasurer and its agents when the agents | 6 | | are acting on the State Treasurer's behalf. | 7 | | (Source: P.A. 100-540, eff. 12-31-18; 100-635, eff. 12-31-18 .)
| 8 | | Section 999. Effective date. This Act takes effect upon | 9 | | becoming law.
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