Sec. 4. Know before you owe
1,338 words·~6 min read·
/bill/113/s/1803/is/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by section 2, is further amended— by striking paragraph
(3)and inserting the following: Except as provided in subparagraph (B), before a creditor may issue any funds with respect to an extension of credit described in this subsection, the creditor shall obtain from the relevant institution of higher education where such loan is to be used for a student, such institution's certification of— the enrollment status of the student; the student's cost of attendance at the institution as determined by the institution under part F of title IV of the Higher Education Act of 1965; and the difference between— such cost of attendance; and the student's estimated financial assistance, including such assistance received under title IV of the Higher Education Act of 1965 and other financial assistance known to the institution, as applicable. Notwithstanding subparagraph (A), a creditor may issue funds, not to exceed the amount described in subparagraph (A)(iii), with respect to an extension of credit described in this subsection without obtaining from the relevant institution of higher education such institution’s certification if such institution fails to provide within 15 business days of the creditor’s request for such certification— notification of the institution's refusal to certify the request; or notification that the institution has received the request for certification and will need additional time to comply with the certification request. If a creditor issues funds without obtaining a certification, as described in subparagraph (B), such creditor shall report the issuance of such funds in a manner determined by the Director of the Consumer Financial Protection Bureau. ; and by adding at the end the following: A creditor that issues any funds with respect to an extension of credit described in this subsection shall send loan statements, where such loan is to be used for a student, to borrowers of such funds not less than once every 3 months during the time that such student is enrolled at an institution of higher education. Each statement described in clause
(i)shall— report the borrower's total remaining debt to the creditor, including accrued but unpaid interest and capitalized interest; report any debt increases since the last statement; and list the current interest rate for each loan. On or before the date a creditor issues any funds with respect to an extension of credit described in this subsection, the creditor shall notify the relevant institution of higher education, in writing, of the amount of the extension of credit and the student on whose behalf credit is extended. The form of such written notification shall be subject to the regulations of the Consumer Financial Protection Bureau. A creditor that issues funds with respect to an extension of credit described in this subsection shall prepare and submit an annual report to the Consumer Financial Protection Bureau containing the required information about private student loans to be determined by the Consumer Financial Protection Bureau, in consultation with the Secretary of Education. . Section 140(a)(7)(A) of the Truth in Lending Act ( 15 U.S.C. 1650(a)(7)(A) ) is amended— by redesignating clause
(ii)as clause (iii); in clause (i), by striking and after the semicolon; and by adding after clause
(i)the following: is not made, insured, or guaranteed under title VII or title VIII of the Public Health Service Act ( 42 U.S.C. 292 et seq. and 296 et seq.); and . Not later than 365 days after the date of enactment of this Act, the Director of the Consumer Financial Protection Bureau shall issue regulations in final form to implement paragraphs
(3)and
(16)of section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by paragraph (1). Such regulations shall become effective not later than 6 months after their date of issuance. Section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ) is amended by striking paragraph
(28)and inserting the following: Upon the request of a private educational lender, acting in connection with an application initiated by a borrower for a private education loan in accordance with section 128(e)(3) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(3) ), the institution shall within 15 days of receipt of a certification request— provide such certification to such private educational lender— that the student who initiated the application for the private education loan, or on whose behalf the application was initiated, is enrolled or is scheduled to enroll at the institution; of such student's cost of attendance at the institution as determined under part F of this title; and of the difference between— the cost of attendance at the institution; and the student's estimated financial assistance received under this title and other assistance known to the institution, as applicable; notify the creditor that the institution has received the request for certification and will need additional time to comply with the certification request; or provide notice to the private educational lender of the institution’s refusal to certify the private education loan under subparagraph (D). With respect to a certification request described in subparagraph (A), and prior to providing such certification under subparagraph (A)(i) or providing notice of the refusal to provide certification under subparagraph (A)(iii), the institution shall— determine whether the student who initiated the application for the private education loan, or on whose behalf the application was initiated, has applied for and exhausted the Federal financial assistance available to such student under this title and inform the student accordingly; and provide the borrower whose loan application has prompted the certification request by a private education lender, as described in subparagraph (A)(i), with the following information and disclosures: The availability of, and the borrower’s potential eligibility for, Federal financial assistance under this title, including disclosing the terms, conditions, interest rates, and repayment options and programs of Federal student loans. The borrower's ability to select a private educational lender of the borrower's choice. The impact of a proposed private education loan on the borrower's potential eligibility for other financial assistance, including Federal financial assistance under this title. The borrower’s right to accept or reject a private education loan within the 30-day period following a private educational lender’s approval of a borrower’s application and about a borrower’s 3-day right to cancel period. For purposes of this paragraph, the terms private educational lender and ‘private education loan’ have the meanings given such terms in section 140 of the Truth in Lending Act (15 U.S.C. 1650). An institution shall not provide a certification with respect to a private education loan under this paragraph unless the private education loan includes terms that provide— the borrower alternative repayment plans, including loan consolidation or refinancing; and that the liability to repay the loan shall be cancelled upon the death or disability of the borrower or co-borrower. In this paragraph, the term disability means a permanent and total disability, as determined in accordance with the regulations of the Secretary of Education, or a determination by the Secretary of Veterans Affairs that the borrower is unemployable due to a service connected-disability. . The amendment made by paragraph
(1)shall take effect on the effective date of the regulations described in subsection (a)(3). Section 151(8)(A)(ii) of the Higher Education Act of 1965 ( 20 U.S.C. 1019(8)(A)(ii) ) is amended by inserting certifying, after promoting, . Not later than 24 months after the issuance of regulations under subsection (a)(3), the Director of the Consumer Financial Protection Bureau and the Secretary of Education shall jointly submit to Congress a report on the compliance of institutions of higher education and private educational lenders with section 128(e)(3) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by subsection (a), and section 487(a)(28) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ), as amended by subsection (b). Such report shall include information about the degree to which specific institutions utilize certifications in effectively encouraging the exhaustion of Federal student loan eligibility and lowering student private education loan debt.
Connectionstraces to 5
Citation graph
cites case law
Cites 5Cited by 0 across 0 sources