Sec. 110502. Additional protections for private student loan borrowers
665 words·~3 min read·
/bill/116/hr/6800/pcs/section-110502A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Each private education loan holder who receives a monthly payment pursuant to section 140(h) of the Truth in Lending Act shall modify all private education loan contracts that it holds to provide for the same repayment plan and forgiveness terms available to Direct Loans borrowers under section 685.209(c) of title 34, Code of Federal Regulations, in effect as of January 1, 2020. For a borrower who has defaulted on a private education loan under the terms of the promissory note prior to any loan payment made or forbearance granted under section 140(h) of the Truth in Lending Act, no payment made or forbearance granted under such section 140(h) shall be considered an event that impacts the calculation of the applicable State statutes of limitation.
A private education loan debt collector or creditor may not pressure a borrower to elect to apply any amount received pursuant to subsection
(b)to any private education loan. A violation of this paragraph is deemed— an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service under section 1031 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5531 ); and with respect to a violation by a debt collector, an unfair or unconscionable means to collect or attempt to collect any debt under section 808 of the Federal Debt Collection Practices Act ( 15 U.S.C. 1692f ). In this paragraph, the term pressure means any communication, recommendation, or other similar communication, other than providing basic information about a borrower’s options, urging a borrower to make an election described under subsection (b). Not later than 90 days after September 30, 2021, the Secretary of the Treasury shall carry out a program under which a borrower, with respect to the private education loans of such borrower, shall receive in accordance with paragraph
(3)an amount equal to the lesser of— the total amount of each private education loan of the borrower; or $10,000, reduced by the aggregate amount of all payments made by the Secretary of the Treasury with respect to such borrower under section 140(h) of the Truth in Lending Act. Not later than 90 days after September 30, 2021, the Secretary of the Treasury shall notify each borrower of a private education loan of— the requirements to provide loan relief to such borrower under this section; and the opportunity for such borrower to make an election under paragraph (3)(A) with respect to the application of such loan relief to the private education loans of such borrower. Not later than 45 days after a notice is sent under paragraph (2), a borrower may elect to apply the amount determined with respect to such borrower under paragraph
(1)to any private education loan of the borrower. In the case of a borrower who does not make an election under subparagraph
(A)before the date described in such subparagraph, the Secretary of the Treasury shall apply the amount determined with respect to such borrower under paragraph
(1)in order of the private education loan of the borrower with the highest interest rate. In case of two or more private education loans described in clause
(i)with equal interest rates, the Secretary of the Treasury shall apply the amount determined with respect to such borrower under paragraph
(1)first to the loan with the highest principal. This section shall only apply to a borrower of a private education loan who is an economically distressed borrower. In this section: The terms creditor and debt collector have the meaning given those terms, respectively, under section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a ). The term private education loan has the meaning given the term in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ). The term economically distressed borrower has the meaning given that term under section 140(h)(8) of the Truth in Lending Act, as added by section 110501.
Connectionstraces to 4
Citation graph
cites case law
Sec. 110502
Additional protections for private student loan borrowers
Cites 4Cited by 0 across 0 sources