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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

HIGHER EDUCATION
(110 ILCS 992/) Student Loan Servicing Rights Act.

110 ILCS 992/Art. 5

 
    (110 ILCS 992/Art. 5 heading)
ARTICLE 5. STUDENT LOAN BILL OF RIGHTS
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-5

    (110 ILCS 992/5-5)
    Sec. 5-5. General provisions.
    (a) A servicer shall not engage in any unfair or deceptive practice toward any borrower or cosigner or misrepresent or omit any material information in connection with the servicing of a student loan, including, but not limited to, misrepresenting the amount, nature, or terms of any fee or payment due or claimed to be due on a student loan, the terms and conditions of the student loan agreement, or the borrower's or cosigner's obligations under the student loan or the terms of any repayment plans.
    (b) A servicer shall not misapply payments made by a borrower to the outstanding balance of a student loan.
    (c) A servicer shall oversee third parties, including subservicers, debt collectors, independent contractors, subsidiaries, affiliates, or other agents, to ensure that those companies comply with this Article 5 when working on behalf of the servicer.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-10

    (110 ILCS 992/5-10)
    Sec. 5-10. Payment processing.
    (a) A servicer shall credit borrower and cosigner payments promptly and accurately.
    (b) A servicer shall provide borrowers and cosigners with prompt notice if the servicer changes the address to which the borrower or cosigner needs to send payments.
    (c) A servicer shall not charge a penalty to a borrower or cosigner if a student loan payment is received at an address used for payments for a period of 90 days after the change in address.
    (d) A servicer shall not misrepresent the delinquent amount of the loan on any call with a borrower or cosigner.
    (e) A servicer shall allow a borrower or cosigner to specify instructions as to how an overpayment should be applied to the balance of the loan as consistent with the promissory note.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-15

    (110 ILCS 992/5-15)
    Sec. 5-15. Fees.
    (a) Unless otherwise provided by federal law, a servicer may only charge late fees that are reasonable and proportional to the cost it incurs related to a late payment.
    (b) Unless otherwise provided by federal law, a servicer shall not charge a borrower or cosigner any fee to modify, defer, forbear, renew, extend, or amend the borrower's or cosigner's loan.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-20

    (110 ILCS 992/5-20)
    Sec. 5-20. Billing statements.
    (a) In any student loan billing statement, a servicer shall not misrepresent the:
        (1) fees assessed;
        (2) total amount due for each loan;
        (3) payment due date;
        (4) date to avoid late fees;
        (5) accrued interest during the billing cycle;
        (6) default payment methodology;
        (7) means to provide instructions for a payment; or
        (8) procedure regarding escalated requests for
    
assistance.
    (b) A servicer shall not misrepresent information regarding the $0 bill and advancement of the due date on any billing statement that reflects $0 owed.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-25

    (110 ILCS 992/5-25)
    Sec. 5-25. Payment histories. A servicer shall provide a written payment history to a borrower or cosigner upon request at no cost within 21 calendar days of receiving the request.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-30

    (110 ILCS 992/5-30)
    Sec. 5-30. Specialized assistance for student loan borrowers.
    (a) A servicer shall specially designate servicing and collections personnel deemed repayment specialists who have received enhanced training related to repayment options.
    (b) A servicer shall refrain from presenting forbearance as the sole or first repayment option to a student loan borrower struggling with repayment unless the servicer has determined that, based on the borrower's financial status, a short term forbearance is appropriate.
    (c) All inbound and outbound calls from a federal loan borrower eligible for referral to a repayment specialist and a private loan borrower eligible for referral to a repayment specialist shall be routed to a repayment specialist.
    (d) During each inbound or outbound communication with an eligible federal loan borrower, a repayment specialist shall first inform a federal loan borrower eligible for referral to a repayment specialist that federal income-driven repayment plans that can reduce the borrower's monthly payment may be available, discuss such plans, and assist the borrower in determining whether a particular repayment plan may be appropriate for the borrower.
    (e) A repayment specialist shall assess the long-term and short-term financial situation and needs of a federal loan borrower eligible for referral to a repayment specialist and consider any available specific information from the borrower as necessary to assist the borrower in determining whether a particular income-driven repayment option may be available to the borrower.
    (f) In each discussion with a federal loan borrower eligible for referral to a repayment specialist, a repayment specialist shall present and explain the following options, as appropriate:
        (1) total and permanent disability discharge, public
    
service loan forgiveness, closed school discharge, and defenses to repayment;
        (2) other repayment plans;
        (3) deferment; and
        (4) forbearance.
    (g) A repayment specialist shall assess the long-term and short-term financial situation and needs of a private loan borrower eligible for referral to a repayment specialist in determining whether any private loan repayment options may be appropriate for the borrower.
    (h) A servicer shall present and explain all private loan repayment options, including alternative repayment arrangements applicable to private student loan borrowers.
    (i) A servicer shall be prohibited from implementing any compensation plan that has the intended or actual effect of incentivizing a repayment specialist to violate this Act or any other measure that encourages undue haste or lack of quality.
    (j) The requirements of this Section shall not apply if a repayment specialist has already conversed with a borrower consistent with the requirements of this Section.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-35

    (110 ILCS 992/5-35)
    Sec. 5-35. Disclosures related to discharge and cancellation. If a servicer is aware that a student loan borrower attended a school the United States Department of Education has made findings supporting a defense to repayment claim or closed school discharge, or that a borrower may be eligible to have his or her loans forgiven under a total and permanent disability discharge program, the servicer's personnel shall disclose information related to the Department of Education's procedure for asserting a defense to repayment claim, closed school discharge, or submitting an application for a total and permanent disability discharge.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-40

    (110 ILCS 992/5-40)
    Sec. 5-40. Income-driven repayment plan certifications. A servicer shall disclose the date that a borrower's income-driven payment plan certification will expire and the consequences to the borrower for failing to recertify by the date, including the new repayment amount.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-45

    (110 ILCS 992/5-45)
    Sec. 5-45. Information to be provided to private education loan borrowers.
    (a) A servicer shall provide on its website a description of any alternative repayment plan offered by the servicer for private education loans.
    (b) A servicer shall establish policies and procedures and implement them consistently in order to facilitate evaluation of private student loan alternative repayment arrangement requests, including providing accurate information regarding any private student loan alternative repayment arrangements that may be available to the borrower through the promissory note or that may have been marketed to the borrower through marketing materials.
    A private student loan alternative repayment arrangements shall consider the affordability of repayment plans for a distressed borrower, as well as investor, guarantor, and insurer guidelines and previous outcome and performance information.
    (c) If a servicer offers private student loan repayment arrangements, a servicer shall consistently present and offer those arrangements to borrowers with similar financial circumstances.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-50

    (110 ILCS 992/5-50)
    Sec. 5-50. Cosigner release. For private student loans, a servicer shall provide information on its website concerning the availability and criteria for a cosigner release.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-55

    (110 ILCS 992/5-55)
    Sec. 5-55. Payoff statements. A servicer shall indicate on its website that a borrower may request a payoff statement. A servicer shall provide the payoff statement within 10 days, including information the requester needs to pay off the loan. If a payoff is made, the servicer must send a paid-in-full notice within 30 days.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-60

    (110 ILCS 992/5-60)
    Sec. 5-60. Requirements related to the transfer of servicing.
    (a) When acting as the transferor servicer, a servicer shall provide to each borrower subject to the transfer a written notice not less than 15 calendar days before the effective date of the transfer. The transferee servicer and transferor servicer may provide a single notice, in which case the notice shall be provided not less than 15 calendar days before the effective date of the transfer. The notice by the transferor servicer or, if applicable, the combined notice of transfer shall contain the following information:
        (1) the effective date of the transfer of servicing;
        (2) the name, address, and toll-free telephone number
    
for the transferor servicer's designated point of contact that can be contacted by the borrower to obtain answers to servicing inquiries;
        (3) the name, address, and toll-free telephone number
    
for the transferee servicer's designated point of contact that can be contacted by the borrower to obtain answers to servicing inquiries;
        (4) the date on which the transferor servicer will
    
cease to accept payments relating to the loan and the date on which the transferee servicer will begin to accept such payments; the dates shall either be the same or consecutive days;
        (5) a statement that the transfer of servicing does
    
not affect any term or condition of the loan other than terms directly related to the servicing of a loan;
        (6) information on whether the borrower's
    
authorization for recurring electronic fund transfers, if applicable, will be transferred to the transferee servicer; if any such recurring electronic funds transfers cannot be transferred, the transferee servicer shall provide information explaining how the borrower may establish new recurring electronic funds transfers with the transferee servicer; and
        (7) a statement of the current loan balance,
    
including the current unpaid amount of principal, interest, and fees.
    (b) When acting as the transferee servicer, a servicer shall provide to each borrower subject to the transfer a written notice not more than 15 calendar days after the effective date of the transfer. The transferee servicer and transferor servicer may provide a combined notice of transfer, in which case the notice shall be provided not less than 15 days before the effective date of the transfer. The notice by the transferee servicer or, if applicable, the combined notice of transfer shall contain the following information:
        (1) the effective date of the transfer of servicing;
        (2) the name, address, and toll-free telephone number
    
for the transferee servicer's designated point of contact that can be contacted by the borrower to obtain answers to servicing inquiries;
        (3) the date on which the transferor servicer will
    
cease to accept payments relating to the loan and the date on which the transferee servicer will begin to accept such payments; the dates shall either be the same or consecutive days;
        (4) a statement that the transfer of servicing does
    
not affect any term or condition of the student loan other than terms directly related to the servicing of a loan;
        (5) information on whether the borrower's
    
authorization for recurring electronic fund transfers, if applicable, will be transferred to the transferee servicer; if any such recurring electronic funds transfers cannot be transferred, the transferee servicer shall provide information explaining how the borrower may establish new recurring electronic funds transfers with the transferee servicer; and
        (6) a statement of the current loan balance,
    
including the current unpaid amount of principal, interest, and fees.
    (c) During the 60 calendar day period beginning on the effective date of transfer of the servicing of any loan, a payment timely made to the transferor servicer may not be treated as late for any purpose by the transferee servicer, including the assessment of late fees, accrual of additional interest, and furnishing negative credit information.
    (d) To the extent practicable, for at least 120 calendar days beginning on the effective date of transfer of servicing of any loan, when acting as the transferor servicer, a servicer shall promptly transfer payments received to the transferee servicer for application to the borrower's loan account.
    (e) Unless a borrower's authorizations for recurring electronic fund transfers are automatically transferred to the transferee servicer, when acting as transferee servicer, a servicer shall make available to a borrower whose loan servicing is transferred an online process through which a borrower may make a new authorization for recurring electronic fund transfers. A servicer shall also provide a process through which the borrower may make a new authorization for recurring electronic funds transfers by phone or through written approval.
(Source: P.A. 100-540, eff. 12-31-18.)

110 ILCS 992/5-65

    (110 ILCS 992/5-65)
    Sec. 5-65. Requests for assistance; account dispute resolution; appeals.
    (a) A servicer shall implement reasonable policies and procedures for accepting, processing, investigating, and responding to requests for assistance in a timely and effective manner, including, but not limited to, the following requirements:
        (1) A servicer shall provide readily accessible
    
methods for consumers to submit a request for assistance to the servicer, including such methods as phone, email, and U.S. mail.
        (2) A servicer shall post on its website and disclose
    
on its billing statements:
            (A) the toll-free telephone number, email
        
address, and mailing address for consumers to submit a requests for assistance to the servicer; and
            (B) the procedures for a requester to send a
        
written communication to the servicer regarding any request for assistance.
        (3) For any request for assistance that includes a
    
request for documentation or information, where a response cannot be immediately provided, a servicer shall provide the requested documentation or information to the requester within 14 calendar days of the request; if a servicer determines in good faith that it is unable to provide the documentation or information within 14 calendar days, promptly after making the determination, the servicer shall notify the requester of the expected response period, which must be reasonable for the request for assistance.
    (b) A servicer shall implement a process by which a requester can escalate any request for assistance. Such process shall allow a requester who has made a request for assistance on the phone and who receives a response during the call to obtain immediate review of the response by an employee of the servicer at a higher supervisory level.
    (c) The following requirements shall apply when a requester submits a written or oral request for assistance which contains an account dispute to a servicer:
        (1) Within 14 calendar days after its receipt of the
    
written communication or oral request for further escalation, a servicer shall attempt to make contact, including providing the requester with name and contact information of the representative handling the account dispute, by phone or in writing, to the requester and document such attempt in the borrower's account.
        (2) A servicer shall complete the following actions
    
within 30 calendar days of its receipt of the written communication or oral request for further escalation, subject to paragraph (3) of this subsection:
            (A) conduct a thorough investigation of the
        
account dispute;
            (B) make all appropriate corrections to the
        
account of the requester, including crediting any late fees assessed and derogatory credit furnishing as the result of any error, and, if any corrections are made, sending the requester a written notification that includes the following information:
                (i) an explanation of the correction or
            
corrections to the requester's account that have been made; and
                (ii) the toll-free telephone number, email
            
address, and mailing address of the servicer's personnel knowledgeable about the investigation and resolution of the account dispute.
        (3) If a servicer determines in good faith that it
    
cannot complete a thorough investigation of the account dispute within 30 calendar days after receiving the written communication or oral request for further escalation regarding the account dispute, then, promptly after making the determination, the servicer shall notify the requester of the expected resolution time period, which must be reasonable for the account dispute. A servicer must complete the actions listed in the investigation and resolution of account dispute within this time period.
        (4) If a servicer determines as a result of its
    
investigation that the requested changes to a requester's dispute will not be made, the servicer shall provide the requester with a written notification that includes the following information:
            (A) a description of its determination and an
        
explanation of the reasons for that determination;
            (B) the toll-free telephone number, email
        
address, and mailing address of the servicer's personnel knowledgeable about the investigation and resolution of the account dispute;
            (C) instructions about how the requester can
        
appeal the servicer's determination in accordance with paragraph (5) of this subsection; and
            (D) information regarding the method by which a
        
borrower may request copies of documents a servicer relied on to make a determination that no changes to a requester's account will be made.
        (5) After the requester receives a determination
    
regarding an account dispute in accordance with paragraph (4) of this subsection, the servicer shall allow a process by which the requester can appeal, in writing, the determination. The appeals process shall include:
            (A) a written acknowledgment notifying the
        
requester that the servicer has commenced the appeals process; such acknowledgment shall be sent within 14 calendar days after receiving a written request for appeal from the requester;
            (B) an independent reassessment of the servicer's
        
determination regarding the account dispute, performed by another employee of the servicer at an equal or higher supervisory level than the employee or employees involved in the initial account dispute determination;
            (C) investigation and resolution of appeals
        
within 30 calendar days after a servicer's commencement of the appeals process; and
            (D) notification sent to the requester, in
        
writing, documenting the outcome of the appeal, including any reason for denial.
    (d) While a requester has a pending account dispute, including any applicable appeal, a servicer shall take reasonable steps to:
        (1) prevent negative credit reporting with respect to
    
the borrower's or cosigner's account while the dispute is under review; and
        (2) suspend all collection activities on the account
    
while the account dispute is being researched or resolved, if the account dispute is related to the delinquency.
(Source: P.A. 100-540, eff. 12-31-18.)