Sec. 1016. Improved consumer protections for student loan servicing

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

The Truth in Lending Act ( 15 U.S.C. 1601 et seq. ) is amended by adding at the end the following new chapter: Sec. 188. Definitions. 189. Servicing of postsecondary education loans. 190. Payments and fees. 191. Authority of Bureau. 192. State laws unaffected; inconsistent Federal and State provisions. In this chapter: The term alternative repayment arrangement means an agreed upon arrangement between a loan holder (or, for a Federal Direct Loan or a Federal Perkins Loan, the Secretary of Education or the institution of higher education that made such loan, respectively) or student loan servicer and a borrower— that is different than the terms under an existing postsecondary education loan; and pursuant to which remittance of a monthly payment— satisfies the terms of the postsecondary education loan; or is not required for a period of 1 or more months in order to satisfy the terms of the postsecondary education loan.

The term billing group means a postsecondary education loan account that— is serviced by a student loan servicer; and includes 2 or more postsecondary education loans that are in repayment status. The term Bureau has the meaning given that term in section 103. The term effective date of transfer means the date on which the first payment is due to a transferee servicer from a borrower under a postsecondary education loan. The term Federal Direct Loan means a loan made under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.).

The term Federal Perkins Loan means a loan made under part E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087aa et seq.). The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ). The term late fee means a late fee, penalty, or adjustment to principal, imposed because of a late payment or delinquency by the borrower under a postsecondary education loan. The term loan holder means a person who owns the title to or promissory note for a postsecondary education loan (except for a Federal Direct Loan or a Federal Perkins Loan).

The term open end credit plan has the meaning given that term in section 103. The term postsecondary education expense means any expense that is included as part of the cost of attendance (as that term is defined in section 472 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ll )) of a student. The term postsecondary education lender — means— a financial institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) that solicits, makes, or extends postsecondary education loans; a Federal credit union, as defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 ) that solicits, makes, or extends postsecondary education loans; and any other person engaged in the business of soliciting, making, or extending postsecondary education loans; and does not include— the Secretary of Education; or an institution of higher education with respect to any Federal Perkins Loan made by the institution.

The term postsecondary education loan — means a loan that is— made, insured, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq. , 1087a et seq., 1087aa et seq.); or issued or made by a postsecondary education lender and is— extended to a borrower with the expectation that the amounts extended will be used in whole or in part to pay postsecondary education expenses; or extended for the purpose of refinancing or consolidating 1 or more loans described in subclause

(I)or clause (i); includes a private education loan (as defined in section 140(a)); and does not include a loan— made under an open-end credit plan; or that is secured by real property. Subject to subparagraph (B), the term qualified written request means a written correspondence of a borrower (other than notice on a payment medium supplied by the student loan servicer) transmitted by mail, facsimile, or electronically through an email address or website designated by the student loan servicer to receive communications from borrowers that— includes, or otherwise enables the student loan servicer to identify, the name and account of the borrower; and includes, to the extent applicable— sufficient detail regarding the information sought by the borrower; or a statement of the reasons for the belief of the borrower that there is an error regarding the account of the borrower. A written correspondence of a borrower is a qualified written request if the written correspondence— meets the requirements under clauses

(i)and

(ii)of subparagraph (A); and is transmitted to and received by a student loan servicer at a mailing address, facsimile number, email address, or website address other than the address or number designated by that student loan servicer to receive communications from borrowers. A student loan servicer shall, within a reasonable period of time, transfer a written correspondence of a borrower received by the student loan servicer at a mailing address, facsimile number, email address, or website address other than the address or number designated by that student loan servicer to receive communications from borrowers to the correct address or appropriate office or other unit of the student loan servicer. A written correspondence of a borrower transferred in accordance with clause

(ii)shall be deemed to be received by the student loan servicer on the date on which the written correspondence is transferred to the correct address or appropriate office or other unit of the student loan servicer. The term student loan servicer — means a person who performs student loan servicing; includes a person performing student loan servicing for a postsecondary education loan on behalf of an institution of higher education or the Secretary of Education under a contract or other agreement; does not include the Secretary of Education to the extent the Secretary directly performs student loan servicing for a postsecondary education loan; and does not include an institution of higher education, to the extent that the institution directly performs student loan servicing for a Federal Perkins Loan made by the institution. The term student loan servicing includes any of the following activities: Receiving any scheduled periodic payments from a borrower under a postsecondary education loan (or notification of such payments). Applying payments described in subparagraph

(A)to an account of the borrower pursuant to the terms of the postsecondary education loan or of the contract governing the servicing of the postsecondary education loan. During a period in which no payment is required on the postsecondary education loan— maintaining account records for the postsecondary education loan; and communicating with the borrower on behalf of the loan holder or, with respect to a Federal Direct Loan or Federal Perkins Loan, the Secretary of Education or the institution of higher education that made the loan, respectively. Interacting with a borrower to facilitate the activities described in subparagraphs (A), (B), and (C), including activities to help prevent default by the borrower of the obligations arising from the postsecondary education loan. The term transfer of servicing means the assignment, sale, or transfer of any student loan servicing of a postsecondary education loan from a transferor servicer to a transferee servicer. The term transferee servicer means the person to whom any student loan servicing of a postsecondary education loan is assigned, sold, or transferred. The term transferor servicer means the person who assigns, sells, or transfers any student loan servicing of a postsecondary education loan to another person. A student loan servicer may not— charge a fee for responding to a qualified written request under this chapter; fail to take timely action to respond to a qualified written request from a borrower to correct an error relating to an allocation of payment or the payoff amount of the postsecondary education loan; fail to take reasonable steps to avail the borrower of all possible alternative repayment arrangements to avoid default; fail to perform the obligations required under section 493C(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1098e(d) ); fail to respond within 10 business days to a request from a borrower to provide the name, address, and other relevant contact information of the loan holder of the borrower's postsecondary education loan or, for a Federal Direct Loan or a Federal Perkins Loan, the Secretary of Education or the institution of higher education who made the loan, respectively; fail to comply with— any applicable requirement of the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.); or in the case of a postsecondary education loan made, issued, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ), part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.), or part E of title VIII of such Act ( 42 U.S.C. 297a et seq. ), any applicable requirement of the Act authorizing the postsecondary education loan; fail to comply with any other obligation that the Bureau, by regulation, has determined to be appropriate to carry out the consumer protection purposes of this chapter; or fail to perform other standard servicer's duties. If a borrower under a postsecondary education loan submits a qualified written request to the student loan servicer for information relating to the student loan servicing of the postsecondary education loan, the student loan servicer shall provide a written response acknowledging receipt of the qualified written request within 5 business days unless any action requested by the borrower is taken within such period. Not later than 30 business days after the receipt from any borrower of any qualified written request under subparagraph

(A)and, if applicable, before taking any action with respect to the qualified written request of the borrower, the student loan servicer shall— make appropriate corrections in the account of the borrower, including the crediting of any late fees, and transmit to the borrower a written notification of such correction (which shall include the name and toll-free or collect-call telephone number of a representative of the student loan servicer who can provide assistance to the borrower); after conducting an investigation, provide the borrower with a written explanation or clarification that includes— to the extent applicable, a statement of the reasons for which the student loan servicer believes the account of the borrower is correct as determined by the student loan servicer; and the name and toll-free or collect-call telephone number of an individual employed by, or the office or department of, the student loan servicer who can provide assistance to the borrower; or after conducting an investigation, provide the borrower with a written explanation or clarification that includes— information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the student loan servicer; and the name and toll-free or collect-call telephone number of an individual employed by, or the office or department of, the student loan servicer who can provide assistance to the borrower. There may be 1 extension of the 30-day period described in subparagraph

(B)of not more than 15 days if, before the end of such 30-day period, the student loan servicer notifies the borrower of the extension and the reasons for the delay in responding. Each student loan servicer shall, on an annual basis, report to the Bureau the aggregate number of extensions sought by the student loan servicer under clause (i). During the 60-day period beginning on the date on which a student loan servicer receives a qualified written request from a borrower relating to a dispute regarding payments by the borrower, a student loan servicer may not provide negative credit information to any consumer reporting agency (as defined in section 603 of the Truth in Lending Act ( 15 U.S.C. 1681a )) relating to the subject of the qualified written request or to such period, including any information relating to a late payment or payment owed by the borrower on the borrower's postsecondary education loan. A student loan servicer shall designate an office or other unit of the student loan servicer to act as a point of contact regarding postsecondary education loans for— a borrower who is not less than 60 days delinquent under the postsecondary education loan; a borrower who seeks information regarding, seeks to enter an agreement for, or seeks to resolve an issue under a repayment option that requires subsequent submission of supporting documentation; and a borrower under a private education loan (as defined in section 140) who is seeking to modify the terms of the repayment of the postsecondary education loan because of hardship. In this subsection, the term veteran has the meaning given that term in section 101 of title 38, United States Code. A student loan servicer shall designate 1 or more employees to act as a liaison for members of the Armed Forces, veterans, and spouses and dependents of a member of the Armed Forces or a veteran, who shall be— responsible for answering inquiries relating to postsecondary education loans from members of the Armed Forces, veterans, and spouses and dependents of a member of the Armed Forces or a veteran; and specially trained on the benefits available to members of the Armed Forces and veterans under the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.) and other Federal and State laws relating to postsecondary education loans. A student loan servicer shall establish and maintain a toll-free telephone number that— may be used by a member of the Armed Forces, veteran, or spouse or dependent of a member of the Armed Forces or a veteran to connect directly to the liaison designated under paragraph (2); and shall be listed on the primary Internet website of the student loan servicer and on monthly billing statements. A postsecondary education lender shall disclose to each person who applies for a postsecondary education loan, at the time of application for the postsecondary education loan, whether there may be a transfer of servicing of the postsecondary education loan at any time during which the postsecondary education loan is outstanding. A postsecondary education lender shall not be liable to a borrower for failure to comply with subparagraph

(A)if the application for a postsecondary education loan was made before the regulations established under section 191 take effect. A transferor servicer shall notify the borrower under a postsecondary education loan, in writing, of any transfer of student loan servicing for the postsecondary education loan (with respect to which such notice is made). Except as provided under clause (ii), the notice required under subparagraph

(A)shall be made to the borrower not less than 15 days before the effective date of transfer of the student loan servicing of the postsecondary education loan. The notice required under subparagraph

(A)shall be made to the borrower not more than 30 days after the effective date of transfer of the student loan servicing of the borrower's postsecondary education loan if the transfer of student loan servicing is preceded by— termination of the contract for student loan servicing of the postsecondary education loan for cause; commencement of bankruptcy proceedings of the transferor servicer; or any other situation in which the Bureau determines that such exception is warranted. The notice required under subparagraph

(A)shall— be made in writing and, if the transferor servicer has an email address for the borrower, by email; and include— the effective date of the transfer; the name, address, website, and toll-free or collect-call telephone number of the transferee servicer; a toll-free or collect-call telephone number for an individual employed by the transferor servicer, or the office or department of, the transferor servicer that can be contacted by the borrower to answer inquiries relating to the transfer of servicing; the name and toll-free or collect-call telephone number for an individual employed by the transferee servicer, or the office or department of, the transferee servicer that can be contacted by the borrower to answer inquiries relating to the transfer of servicing; the date on which the transferor servicer will cease to accept payments relating to the borrower's postsecondary education loan and the date on which the transferee servicer will begin to accept such payments; a statement that the transfer of student loan servicing of the postsecondary education loan does not affect any term or condition of the postsecondary education loan other than terms directly related to the student loan servicing of the postsecondary education loan; a statement disclosing— whether borrower authorization for recurring electronic funds transfers will be transferred to the transferee servicer; and if any such recurring electronic funds transfers cannot be transferred, information as to how the borrower may establish new recurring electronic funds transfers in connection with transfer of servicing to the transferee servicer; a statement disclosing— the application of all payments and charges relating to the borrower's postsecondary education loan as of the effective date of the transfer, including— the date the last payment of the borrower was received; the date the last late fee, arrearages, or other charge was applied; and the amount of the last payment allocated to principal, interest, and other charges; the status of the borrower's postsecondary education loan as of the effective date of the transfer, including whether the loan is in default; whether any application for an alternative repayment arrangement submitted by the borrower is pending; and an itemization and explanation for all arrearages claimed to be due as of the effective date of the transfer; a detailed description of any benefit, alternative repayment arrangement, or other term or condition arranged between the transferor servicer and the borrower that is not included in the terms of the promissory note; a detailed description of any item identified under subclause

(VIII)that will cease to apply upon transfer, including an explanation; and information on how to file a complaint with the Bureau. A transferee servicer shall notify the borrower under a postsecondary education loan, in writing, of any transfer of servicing of the postsecondary education loan. Except as provided in clause (ii), the notice required under subparagraph

(A)shall be made to the borrower not more than 15 days after the effective date of transfer of the student loan servicing of the borrower's postsecondary education loan. The notice required under subparagraph

(A)shall be made to the borrower not more than 30 days after the effective date of transfer of the student loan servicing of the student loan servicing of borrower's postsecondary education loan if the transfer of servicing is preceded by— termination of the contract for student loan servicing the postsecondary education loan for cause; commencement of bankruptcy proceedings of the transferor servicer; or any other situation in which the Bureau determines that such exception is warranted. The notice required under subparagraph

(A)shall be made in the same manner as under paragraph (2)(C) and include the information described in paragraph (2)(C). The notification required under this subsection shall be provided in writing. During the 60-day period beginning on the effective date of transfer relating to a borrower's postsecondary education loan, a late fee may not be imposed on the borrower with respect to any payment on the postsecondary education loan, and no such payment may be treated as late for any other purposes, if the payment is received by the transferor servicer (rather than the transferee servicer who should properly receive payment) before the due date applicable to such payment. To the maximum extent practicable, a transferor servicer shall notify a borrower, both in writing and by telephone, regarding any payment received by the transferor servicer (rather than the transferee servicer who should properly receive payment). A transferee servicer shall make available to a borrower whose student loan servicing is transferred to the transferee servicer a simple, online process through which the borrower may transfer to the transferee servicer any existing authority for an electronic fund transfer that the borrower had provided to the transferor servicer. A student loan servicer shall not be liable to a borrower for failure to comply with paragraph

(2)or

(3)with respect to a transfer of student loan servicing before the regulations under section 191 take effect. A student loan servicer or a postsecondary education lender shall not be liable to a borrower for failure to comply with a requirement under this section if, not later than 60 days after discovering an error and before the commencement of an action under section 130 or the receipt of written notice of the error from the borrower, the student loan servicer notifies the borrower of the error and makes any adjustments in the appropriate account that are necessary to ensure that the borrower will not be required to pay an amount greater than the amount that the borrower otherwise would have paid. A loan holder or student loan servicer may not recommend or encourage default or delinquency on an existing postsecondary education loan prior to and in connection with the process of qualifying for or enrolling in an alternative repayment arrangement, including the origination of a new postsecondary education loan that refinances all or any portion of such existing loan or debt. A late fee may not be charged to a borrower under a postsecondary education loan under any of the following circumstances, either individually or in combination: On a per-loan basis when a borrower has multiple postsecondary education loans in a billing group. In an amount greater than 4 percent of the amount of the payment past due. Before the end of the 15-day period beginning on the date the payment is due. More than once with respect to a single late payment. The borrower fails to make a singular, non successive regularly-scheduled payment on the postsecondary education loan. No late fee may be charged to a borrower under a postsecondary education loan relating to an insufficient payment if the payment is made on or before the due date of the payment, or within any applicable grace period for the payment, if the insufficiency is attributable only to a late fee relating to an earlier payment, and the payment is otherwise a full payment for the applicable period. Except as provided in paragraph (2), a postsecondary education loan executed after the date of enactment of the Higher Education Affordability Act may not include a provision that permits the loan holder or student loan servicer to accelerate, in whole or in part, payments on the postsecondary education loan. A postsecondary education loan may include a provision that permits acceleration of the postsecondary education loan in cases of payment default. A loan holder or student loan servicer may not charge a borrower any fee to modify, renew, extend, or amend a postsecondary education loan, or to defer any payment due under the terms of a postsecondary education loan. Except as provided in subparagraph

(B)or (D), a loan holder or student loan servicer may not charge a fee for informing or transmitting to a borrower or a person authorized by the borrower the balance due to pay off the outstanding balance on a postsecondary education loan. If a loan holder or student loan servicer provides the information described in subparagraph

(A)by facsimile transmission or courier service, the loan holder or student loan servicer may charge a processing fee to cover the cost of such transmission or service in an amount that is not more than a comparable fee imposed for similar services provided in connection with consumer credit transactions. A loan holder or student loan servicer shall disclose to the borrower that payoff balances are available for free pursuant to subparagraph

(A)before charging a transaction fee under subparagraph (B). If a loan holder or student loan servicer has provided the information described in subparagraph

(A)without charge, other than the transaction fee permitted under subparagraph (B), on 4 or more occasions during a calendar year, the loan holder or student loan servicer may thereafter charge a reasonable fee for providing such information during the remainder of the calendar year. A loan holder or a student loan servicer that has received a request by a borrower or a person authorized by a borrower for the information described in paragraph (1)(A) shall provide such information to the borrower or person authorized by the borrower not later than 5 business days after receiving such request. Except as provided in paragraph (3), a student loan servicer shall provide written notice to a borrower of any material change in the terms of the postsecondary education loan, including an increase in the interest rate, not later than 45 days before the effective date of the change or increase. The Bureau shall, by regulation, establish guidelines for determining which changes in terms are material under subparagraph (A). Except as provided in paragraph (3), a loan holder or student loan servicer may not increase the interest rate or other fee applicable to an outstanding balance on a postsecondary education loan. The requirements under paragraphs

(1)and

(2)shall not apply to— an increase in any applicable variable interest rate incorporated in the terms of a postsecondary education loan that provides for changes in the interest rate according to operation of an index that is not under the control of the loan holder or student loan servicer and is published for viewing by the general public; an increase in interest rate due to the completion of a workout or temporary hardship arrangement by the borrower or the failure of the borrower to comply with the terms of a workout or temporary hardship arrangement if— the interest rate applicable to a category of transactions following any such increase does not exceed the rate or fee that applied to that category of transactions prior to commencement of the arrangement; and the loan holder or student loan servicer has provided the borrower, prior to the commencement of such arrangement, with clear and conspicuous disclosure of the terms of the arrangement (including any increases due to such completion or failure); and an increase in interest rate due to a provision included within the terms of a postsecondary education loan that provides for a lower interest rate based on the borrower’s agreement to a prearranged plan that authorizes recurring electronic funds transfers if— the borrower withdraws the borrower’s authorization of the prearranged recurring electronic funds transfer plan; and after withdrawal of the borrower’s authorization and prior to increasing the interest rate, the loan holder or student loan servicer has provided the borrower with clear and conspicuous disclosure of the impending change in borrower’s interest rate and a reasonable opportunity to reauthorize the prearranged electronic funds transfers plan. Payments received from a borrower under a postsecondary education loan by the student loan servicer shall be posted promptly to the account of the borrower as specified in regulations of the Bureau. Such regulations shall prevent a fee from being imposed on any borrower if the student loan servicer has received the borrower’s payment in readily identifiable form, by 5:00 p.m. on the date on which such payment is due, in the amount, manner, and location specified by the student loan servicer. A student loan servicer that services a billing group of a borrower shall, upon receipt of a payment from the borrower, apply amounts in excess of the monthly payment amount first to the principal of the postsecondary education loan bearing the highest interest rate, and then to each successive principal balance bearing the next highest interest rate until the payment is exhausted, unless otherwise specified in writing by the borrower. Not later than 1 year after the date on which the Bureau submits the first report required under section 1018 of the Higher Education Affordability Act, the Bureau shall issue regulations establishing the manner in which a student loan servicer shall apply amounts less than the total payment due during the billing cycle. In issuing the regulations required under subclause (I), the Bureau shall consider— the impact of the regulations on— outstanding debt of borrowers and the imposition of late fees; credit ratings of borrowers; and continued availability of alternative repayment arrangements; any other factors the Bureau determines are appropriate; and the findings from the report required under section 1018 of the Higher Education Affordability Act. If a student loan servicer makes a material change in the mailing address, office, or procedures for handling borrower payments, and such change causes a material delay in the crediting of a payment made during the 60-day period following the date on which such change took effect, the student loan servicer may not impose any late fee for a late payment on the postsecondary education loan to which such payment was credited. A student loan servicer may advance the date due of the next regularly scheduled installment payment of a postsecondary education loan upon remittance of a prepayment by the borrower, if— the borrower's payment is sufficient to satisfy at least 1 additional installment payment; the number of billing cycles for which the date due is advanced is equal to total number of installment payments satisfied by the prepayment; and upon receipt by the student loan servicer, the prepayment is applied— to the principal balance of the postsecondary education loan; or if the student loan servicer services a billing group of a borrower, to the principal balance of the postsecondary education loan with the highest interest rate in such billing group. A student loan servicer shall provide a clear, understandable and transparent means, including through submission of an online form, for the borrower to elect to— instruct the servicer not to advance the date due of future installment payments as described in paragraph (1); and voluntarily make payments in excess of the borrower's regularly scheduled installment payment amount on a periodic basis via recurring electronic funds transfers or other automatic payment arrangement. A student loan servicer may not treat a payment on a postsecondary education loan as late for any purpose unless the student loan servicer has adopted reasonable procedures designed to ensure that each billing statement required under subsection (j)(1) is mailed or delivered to the consumer not later than 21 days before the payment due date. A student loan servicer for each borrower’s account that is being serviced by that student loan servicer and that includes a postsecondary education loan shall transmit to the borrower, for each billing cycle at the end of which there is an outstanding balance in that account, a statement that includes— the outstanding balance in the account at the beginning of the billing cycle; the total amount credited to the account during the billing cycle; the amount of any fee added to the account during the billing cycle, itemized to show the amounts, if any, due to the application of an increased interest rate, and the amount, if any, imposed as a minimum or fixed charge; the balance on which the fee described in subparagraph

(C)was computed and a statement of how the balance was determined; whether the balance described in subparagraph

(D)was determined without first deducting all payments and other credits during the billing cycle, and the amount of any such payments and credits; the outstanding balance in the account at the end of the billing cycle; the date by which, or the period within which, payment must be made to avoid late fees, if any; the address of the student loan servicer to which the borrower may direct billing inquiries; the amount of any payments or other credits during the billing cycle that was applied to pay down principal, and the amount applied to interest; in the case of a billing group, the allocation of any payments or other credits during the billing cycle to each of the postsecondary education loans in the billing group; and information on how to file a complaint with the Bureau and with the ombudsman designated pursuant to section 1035 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5535 ). In the case of a postsecondary education loan account under which a late fee or charge may be imposed due to the failure of the borrower to make payment on or before the due date for such payment, the billing statement required under paragraph

(1)with respect to the account shall include, in a conspicuous location on the billing statement, the date on which the payment is due or, if different, the date on which a late fee will be charged, together with the amount of the late fee to be imposed if payment is made after that date. If the loan holder, in the case of a postsecondary education loan account referred to in subparagraph (A), is a financial institution that maintains a branch or office at which payments on any such account are accepted from the borrower in person, the date on which the borrower makes a payment on the account at such branch or office shall be considered to be the date on which the payment is made for purposes of determining whether a late fee may be imposed due to the failure of the borrower to make payment on or before the due date for such payment. A loan holder or student loan servicer who, when acting in good faith, fails to comply with any requirement under this section will to be deemed to have not violated such requirement if the loan holder or student loan servicer establishes that— not later than 30 days after the date of execution of the postsecondary education loan and prior to the institution of any action under subtitle E of title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5561 et seq. )— the borrower is notified of or discovers the compliance failure; appropriate restitution to the borrower is made; and necessary adjustments are made to the postsecondary education loan that are necessary to bring the postsecondary education loan into compliance with the requirements of this section; or not later than 60 days after the loan holder or student loan servicer discovers or is notified of an unintentional violation or bona fide error and prior to the institution of any action under subtitle E of title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5561 et seq. )— the borrower is notified of the compliance failure; appropriate restitution to the borrower is made; and necessary adjustments are made to the postsecondary education loan that are necessary to bring the postsecondary education loan into compliance with the requirements of this section. Nothing in this section shall be construed to supercede any reporting or disclosure requirement required for a postsecondary education loan that is made, issued, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ), part A of title VII of the Public Health Service Act ( 42 U.S.C. 292 et seq. ), or part E of title VIII of such Act ( 42 U.S.C. 297a et seq. ), if such reporting requirement does not directly conflict with the requirements of this section. The Bureau, in consultation with the Secretary of Education, is authorized to prescribe such rules and regulations, make such interpretations, and grant such reasonable exemptions, in accordance with, and as may be necessary to achieve the purposes of, this chapter. The Bureau shall, in consultation with the Secretary of Education, issue regulations requiring disclosures, including the disclosures required under section 483A of the Higher Education Act of 1965, to borrowers that clearly and conspicuously inform borrowers of the protections afforded to them under this chapter and under other provisions relating to postsecondary education loans. The Bureau shall consider whether special disclosures are required to accommodate the unique needs of borrowers who are members of the Armed Forces or veterans. The regulations issued under paragraph

(1)shall— ensure that a borrower is made aware of— all repayment options available to the borrower, including the availability of refinancing products, and the effect of each repayment option on the total amount owed under, total cost of, and time to repay the postsecondary education loan; the risks and costs associated with default; and the eligibility of certain borrowers for discharge of certain postsecondary education loans; and require provision of information about how a borrower can file a complaint with the Bureau relating to an alleged violation of this chapter. The regulations issued under paragraph

(1)shall specify the timing of the disclosures described in paragraph (2)(A). Such timing may include— before the first payment is due under the postsecondary education loan; or when the borrower— first exhibits difficulty in making payments under the postsecondary education loan; is 30 days delinquent under the postsecondary education loan; is 60 days delinquent under the postsecondary education loan; notifies the student loan servicer of the intent of the borrower to forbear or defer payment under the postsecondary education loan; inquires about or requests the refinancing or consolidation of the postsecondary education loan; or informs the student loan servicer, or a postsecondary education lender acting on behalf of the borrower informs the student loan servicer, that the borrower will be refinancing or consolidating the loan. The Bureau, by regulation or order, shall prohibit acts or practices in connection with— a postsecondary education loan that the Bureau finds to be unfair, deceptive, or designed to evade the provisions of this chapter; or the refinancing of a postsecondary education loan, including facilitation of refinancing or enrollment in an alternative repayment arrangement, that the Bureau finds to be associated with abusive lending practices, or that are otherwise not in the interest of the borrower. In order to avoid duplication, to the extent practicable, the Bureau, in consultation with the Secretary of Education, may consider— obligations of student loan servicers under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); and findings from the report authorized under section 456(d) of the Higher Education Act of 1965 (20 U.S.C. 1087f(d)). Nothing in this chapter shall annul, alter, or affect, or exempt any person subject to the provisions of this chapter from complying with the laws of any State with respect to student loan servicing practices, fees on postsecondary education loans, or other requirements relating to postsecondary education loans, except to the extent that those laws are inconsistent with any provision of this chapter, and then only to the extent of the inconsistency. The Bureau is authorized to determine whether such inconsistencies exist. The Bureau may not determine that any State law is inconsistent with any provision of this chapter if the Bureau determines that such law gives greater protection to the consumer. In making these determinations the Bureau shall consult with the appropriate Federal agencies. .

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