110 ILCS 992/7-10

(110 ILCS 992/7-10)

Sec. 7-10. Monthly payment affordability.

(a) Each EISA shall specify the EISA payment calculation method applicable to the EISA. An EISA shall not require payments from the consumer toward that EISA that exceed 8% of the consumer's income. An EISA provider shall not enter into an EISA with a consumer if the consumer would be committing to pay more than 15% of the consumer's income at any time during the EISA duration, based on information available to the EISA provider at the time of the projection, inclusive of any payment obligations that the EISA provider knows will arise in the future for other EISAs and education loans upon which the consumer is obligated at the time of the projection. The EISA provider must confirm a consumer's EISA and education loan liabilities through a verifiable third-party source. At a minimum, the EISA provider must confirm such liabilities using information maintained by a nationwide consumer reporting agency, as defined by 15 U.S.C. 1681a(f), and doing so is sufficient for meeting the requirement in this subsection. However, nothing in this subsection shall prohibit an EISA provider from using other sources to provide additional verification. For the purposes of calculating the portion of a student's future income that would be consumed by the EISA for which the student has applied and other EISAs and education loans known at the time, the EISA provider shall calculate the aggregate future burden of all such obligations, including the EISA for which the student is applying, at the hypothetical future income levels described in subdivision (a)(15)(iii) of Section 7-75, ranging from the income threshold of the EISA for which the student has applied up to the maximum income described in subdivision (a)(15)(iii) of Section 7-75. The terms of the EISA for which the student has applied cannot cause the student's aggregate future burden to exceed the percentage limits in this subsection at any of the income increments stated in this Section. For the purpose of calculating the percentage burden of an EISA at a given future income level, the EISA provider shall use the EISA payment amount that would be applicable for the EISA at such income level. For the purpose of calculating the percentage burden of an educational loan at a given future income level, the EISA provider shall divide the annual payment obligation by income level using the most affordable payment plan or option which would yield the lowest monthly payments that would be available to the student at such income level under such loan. For students enrolled in a program eligible to receive federal student loans under Title IV of the federal Higher Education Act of 1965, as part of this analysis the EISA provider shall assume a federal loan balance equal to the larger of (1) the student's existing federal loan balance and (2) the aggregate maximum amount the student is eligible to borrow under Federal Direct Stafford Loans for the student's status, dependent or independent.

(b) The EISA must state that when a consumer has income that is equal to or below the income threshold set forth in the EISA that the consumer's payment obligation is zero dollars. The income threshold must be equal to or greater than $47,000; however, that amount shall be increased on January 1, 2026, and every other January 1 thereafter, by the annual unadjusted percentage increase (but not less than zero) in the index for the 12 months ending with the preceding September, including all previous adjustments.

(c) An EISA must offer at least 3 months of voluntary payment relief pauses for every 30 income-determined payments required under the EISA.

(d) During the payment process for the EISA, the consumer may request that the income threshold on the EISA be adjusted upward to ensure the consumer's income, less any payments required by the EISA, would be greater than or equal to the minimum essential income based on the consumer's current place of residence.

As used in this subsection (d), the consumer's minimum essential income is equal to 275% of the federal poverty guidelines for a single person (for the year in which the calculation is performed), multiplied by a cost-of-living adjustment factor equal to the ratio of (i) one plus the current locality payment percentage issued by the U.S. Office of Personnel Management for the locality pay area in which the consumer resides, divided by (ii) one plus the current locality payment percentage issued by the U.S. Office of Personnel Management for the "Rest of U.S." locality pay area. The locality pay areas described in this subsection (d) are the locality pay areas described in 5 CFR 531.603.

An EISA provider must notify consumers of this option on each monthly billing statement. Nothing in this provision shall prevent an EISA provider from taking reasonable steps to confirm a consumer's place of residence (such as requiring a copy of a utility bill or a driver's license) for the purpose of establishing the consumer's minimum essential income, including if the EISA provider believes a consumer's place of residence has changed. Furthermore, an EISA provider may require that a consumer has resided at a location for at least 90 days before adjusting the consumer's minimum essential income.

The requirements for repayment options in subsection (k) of Section 5-30 apply to this Section.

(Source: P.A. 104-383, eff. 8-15-25.)