Sec. 4. Required monthly disclosures
814 words·~4 min read·
/bill/116/hr/4193/ih/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 433(d) of the Higher Education Act of 1965, as so redesignated by section 3 of this Act, is amended— in the subsection header, by striking and inserting during repayment ; and for the life of the loan by amending paragraph
(1)to read as follows: Each eligible lender shall provide the borrower of one or more loans made, insured, or guaranteed under this part or part D with a written monthly bill or statement (including through electronic means), in simple and understandable terms, of pertinent loan information described in this paragraph that— with respect to a borrower who is in repayment status, shall include a bill that corresponds to each payment installment time period in which a payment is due; with respect to a borrower who is not in repayment status, shall be a statement for each month of the period during which the borrower is not required to make a payment to the eligible lender, including while the borrower is in school and during periods of deferment or forbearance; shall be provided to the borrower of a loan not more than 30 days after the first disbursement of the loan, and monthly thereafter for the life of the loan; and shall include, for all outstanding loans made, insured, or guaranteed under this part or part D by the eligible lender to the borrower— the original principal amount of each of the borrower’s loans owed to that lender, and the original principal amount of those loans in the aggregate; the borrower’s current balance on each loan and on all loans in the aggregate, as of the time of the bill or statement, as applicable; the interest rate on each loan; the total amount the borrower has paid in interest on each loan and on all loans in the aggregate; the amount of interest that has accumulated on each loan and on all loans in the aggregate since the last statement, and the total interest accrued to date on each loan and on all loans in the aggregate during the life of the loans; the aggregate amount the borrower has paid for each loan and all loans in the aggregate, including the amount the borrower has paid in interest, the amount the borrower has paid in fees, and the amount the borrower has paid against the principal; an estimate of the aggregate amount the borrower will pay during the life of the loan for each loan and on all loans in the aggregate, including the total amount of monthly payments made over the life of the loans plus the amount of any charges for the loans, such as origination fees; a description of each fee the borrower has been charged for the most recently preceding installment time period; the date by which the borrower needs to make a payment in order to avoid additional fees and the amount of such payment and the amount of such fees; with respect to a borrower who is not in repayment, the estimated balance to be owed by the borrower on each loan and on all loans in the aggregate, and an estimate of the projected monthly payment on each loan and on all loans in the aggregate, on the estimated date the borrower will enter (or re-enter) repayment status; a reminder that the borrower has the option to change repayment plans, a list of the names of the repayment plans available to the borrower, a link to the appropriate page of the Department's website to obtain a more detailed description of the repayment plans, and directions for the borrower to request a change in repayment plan; an explanation— that the borrower has the option to pay the interest that accrues on each loan while the borrower is a student at an institution of higher education or during a period of deferment or forbearance, if applicable; and if the borrower does not pay such interest while attending an institution or during a period of deferment or forbearance, any accumulated interest on the loan will be capitalized when the loan goes into repayment, resulting in more interest being paid over the life of the loan; an explanation that making even small payments of any amount while the borrower is a student at an institution of higher education, or during a period of deferment or forbearance, if applicable, can help to offset interest accrual over the life of the loan; the lender’s or loan servicer’s address, toll-free phone number, and website for payment and billing error purposes, including information about how a borrower can make voluntary payments when a loan is not in repayment status; and an explanation to borrowers that loans made under this part of part D have significant protections for borrowers that aren’t offered by the private market, including a number of income-driven repayment options, which offer flexible repayments terms and loan forgiveness for struggling borrowers. .