Sec. 2. Higher Education Act of 1965 amendments

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Section 433 of the Higher Education Act of 1965 ( 20 U.S.C. 1083 ) is amended— in subsection (b)— in paragraph (12), by striking and after the semicolon; in paragraph (13), by striking the period at the end and inserting ; and ; and by adding at the end the following: a statement that— the borrower may be entitled to servicemember and veteran benefits under the Servicemembers Civil Relief Act ( 50 U.S.C. 3901 et seq. ) and other Federal or State laws; and a Servicemember and Veterans Liaison designated under section 128(e)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number and email address to contact the Liaison pursuant to such section. ; and in subsection (e)— in paragraph (2), by adding at the end the following:

A statement that— the borrower may be entitled to servicemember and veteran benefits under the Servicemembers Civil Relief Act ( 50 U.S.C. 3901 et seq. ) and other Federal or State laws; and a Servicemember and Veterans Liaison designated under section 128(e)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number and email address to contact the Liaison pursuant to such section.

A statement that a repayment specialist office or unit designated under section 128(e)(16)(J)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(J)(i) ) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number and email address to contact the specialist pursuant to section 128(e)(16)(J)(iii) of such Act. ; and in paragraph (3), by adding at the end the following: A statement that— the borrower may be entitled to servicemember and veteran benefits under the Servicemembers Civil Relief Act ( 50 U.S.C. 3901 et seq. ) and other Federal or State laws; and a Servicemember and Veterans Liaison designated under section 128(e)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number and email address to contact the Liaison pursuant to such section.

A borrower may prepay all or part of a loan made under this part at any time without penalty. If a borrower pays any amount in excess of the amount due for a loan made under this part, the excess amount shall be a prepayment. If a borrower makes a prepayment, the Secretary shall— apply the prepaid amount according to the terms of the promissory note signed by the borrower; upon request of the borrower, apply the prepaid amount to the outstanding loan principal; or upon request of the borrower, advance the due date of the next payment and notify the borrower of any revised due date for the next payment.

If a borrower has more than 1 loan made under this part, the Secretary shall allocate any prepayment or other partial payment in the same manner as amounts are allocated under section 128(e)(16)(G)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(G)(i) ). . Section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f ) is amended— in subsection (a), by striking paragraph

(3)and inserting the following: Nothing in this section shall be construed as a limitation of the authority of any State agency to enter into an agreement for the purposes of this section as a member of a consortium of State agencies. Nothing in this section shall be construed as altering, limiting, or affecting any obligation by an entity with which the Secretary enters into a contract under this section to comply with any applicable Federal or State law, including any Federal consumer financial law, as defined in section 1002(14) of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481(14) ). Nothing in this section shall be construed as altering, limiting, or affecting the authority of a State attorney general or any other State regulatory or enforcement agency or authority to bring an action or other regulatory proceeding arising solely under the law of such State. ; and by adding at the end the following: A consumer financial product or service offered by an entity with which the Secretary enters into a contract under this section for origination, servicing, or collection described in subsection (b), as part of such contract, shall have the meaning given the term in section 1002 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 ). Any entity with which the Secretary enters into a contract under this section for origination, servicing, or collection described in subsection

(b)shall be considered a covered person (as defined in section 1002 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 )) and subject to the provisions of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 et seq. ). Any entity with which the Secretary enters into a contract under this section for origination, servicing, or collection, as described in subsection (b), and is engaged in the provision of, or offering, servicing shall be considered a postsecondary educational lender or servicer (as defined in section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), and subject to the provisions of section 128(e) of the Truth in Lending Act ( 12 U.S.C. 1638(e) ). In awarding any contract under this section for origination, servicing, or collection described in subsection (b), the Secretary shall require, as part of such contract, any entity receiving such an award— to respond to consumer complaints submitted to any Federal, State, or local agency that accepts complaints from student loan borrowers, including the Bureau of Consumer Financial Protection, by borrowers who owe loans made under this part; and to share information about consumer complaints with the Secretary, the Bureau of Consumer Financial Protection, the Federal Trade Commission, the Department of Veterans Affairs, any State attorney general, or any other Federal or State regulatory or enforcement agency that compiles information about such complaints. Any entity with which the Secretary enters into a contract under this section shall be prohibited, as part of such contract, from marketing to the borrower of a loan made, insured, or guaranteed under this title a financial product or service— using data obtained as a result of the contract or the relationship with the borrower stemming from the contract; during any outreach or contact with the borrower resulting from the contract or the relationship with the borrower stemming from the contract; or on any platform or through any method resulting from the contract or the relationship with the borrower stemming from the contract. Not later than 30 days after the date of enactment of the Student Loan Borrower Bill of Rights , the Secretary shall establish a student loan servicing interagency working group co-chaired by the Secretary and the Director of the Bureau of Consumer Financial Protection and including the Chief Operating Officer of the Office of Federal Student Aid, the Director of the Office of Management and Budget, the Secretary of the Treasury, and the heads of any other relevant Federal departments or agencies. Not later than 120 days after the date the working group under paragraph

(1)is established, the working group shall publish an advisory report making recommendations to the Director of the Bureau of Consumer Financial Protection related to the promulgation of regulations under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) with respect to entities with which the Secretary has entered into a contract under this section. Following the publication of the advisory report required under subparagraph (A), the Secretary shall accept, for not less than 60 days, from the public specific feedback on the recommendations included in the report. Not later than 30 days following the conclusion of the public feedback process described in paragraph (2)(B), the Secretary shall publish final recommendations for the Director of the Bureau of Consumer Financial Protection related to the promulgation of regulations under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ). The working group shall develop policy direction for the Office of Federal Student Aid to incorporate, into contracts awarded under this section, applicable requirements and standards promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) or described in section 128(e)(17)(B)(i)(II) of such Act. After the Secretary publishes final recommendations under paragraph (3), the working group shall meet not less often than once per year including to— evaluate the application of regulations promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) on entities with which the Secretary has entered into a contract under this section; evaluate the Office of Federal Student Aid’s implementation of policy direction developed pursuant to paragraph (4); develop and implement an oversight plan to ensure compliance by entities with which the Secretary has entered into a contract under this section with policy direction developed under paragraph

(4)and regulations promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) or described in section 128(e)(17)(B)(i)(II) of such Act; and undertake other activities to improve coordination among the members of the working group as it relates to the Secretary’s administration of loans made, insured, or guaranteed under this title. In order to carry out its duties under this subsection, the working group may engage in investigations of entities with which the Secretary has entered into a contract under this section. Nothing in this subsection shall be considered to alter, limit, or restrict the Bureau of Consumer Financial Protection’s obligations under chapter 5 of title 5, United States Code (commonly known as the Administrative Procedures Act ), including the Director’s obligation to provide notice, solicit public comment, and respond to such comment when issuing regulations. . Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 et seq. ) is amended by adding at the end the following: Upon repaying in full the amount due on a defaulted loan made, insured, or guaranteed under this title, the Secretary, guaranty agency, or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency, or holder, as applicable, reported the default of the loan, to remove any adverse item of information relating to such loan from the borrower's credit history. . Section 455(g) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(g) ) is amended by adding at the end the following: Upon obtaining a Federal Direct Consolidation Loan that discharges the liability on a defaulted loan made, insured, or guaranteed under this title, the Secretary, guaranty agency, or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove any adverse item of information relating to such loan from the borrower’s credit history. . Section 428F(a)(1)(C) of the Higher Education Act of 1965 ( 20 U.S.C. 1078–6(a)(1)(C) ) is amended by striking to remove the record of the default from the borrower's credit history and inserting to remove any adverse item of information relating to such loan from the borrower’s credit history .

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