Christopher's Law

Summary: Christopher Bryski Student Loan Protection Act or Christopher's Law - Amends the Truth in Lending Act to require lenders of private education loans to:    describe clearly and conspicuously, in writing, the cosigners' obligations regarding such loans, including the effect a borrower's or cosigner's death, disability, or inability to engage in any substantial gainful activity would have on such obligations; require the borrower to designate an individual to have the legal authority to act on behalf of the borrower in the event of the borrower's death, disability, or inability to engage in any substantial gainful activity; and ensure that the borrower, and any cosigner, receives comprehensive information on the loan's terms and conditions and the borrower's responsibilities with respect to such loan.  Directs the Consumer Financial Protection Bureau (CFPB) to publish a model form for describing a cosigner's obligations regarding private education loans. Amends the Higher Education Act of 1965 (HEA) to require institutions of higher education to provide borrowers of federal education loans information at their entrance counseling on:   the effect their death, disability, or inability to engage in any substantial gainful activity would have on their federal and private education loans;  any repayment, refinance, deferment, forbearance, or forgiveness opportunities available to the borrower, or cosigner, in the event of either individual's death, disability, or inability to engage in any substantial gainful activity; and the effect their death, disability, or inability to engage in any substantial gainful activity would have on their obligations and any cosigner's obligations with respect to the loan.  Requires students applying for federal education loans to designate an individual who is to have the legal authority to act on their behalf with respect to such a loan in the event of their death, disability, or inability to engage in any substantial gainful activity.

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Christopher Bryski 
Student Loan Protection Act'' or ``Christopher's Law''.
    (b) Findings.--Congress finds the following:
            (1) No requirement exists for private educational lenders' 
        promissory notes to include a clear and conspicuous description 
        of the responsibilities of a borrower and cosigner in the event 
        the borrower or cosigner becomes disabled, incapacitated, or 
        dies.
            (2) According to the Annual Report of the Bureau of 
        Consumer Financial Protection (CFPB) Student Loan Ombudsman, 
        dated October 16, 2012:
                    (A) ``In less than seven months, the CFPB has 
                handled approximately 2,900 private student loan 
                complaints.''.
                    (B) ``Co-signers complain that information about 
                discharge or alternative arrangements in the case of 
                death of the primary borrower is not readily available 
                and that decisions are made on a case-by-case basis, 
                giving co-signers little understanding of how the 
                process works, or if they will be successful.''.
                    (C) ``The complaints and input received by the CFPB 
                resemble many of the same issues experienced by 
                mortgage borrowers, such as improper application of 
                payments, untimeliness in error resolution, and 
                inability to contact appropriate personnel in times of 
                hardship.''.
                    (D) ``The difference between federal and private 
                student loans in periods of disability was not well-
                understood.''.
                    (E) ``There are at least $8 billion of private 
                student loans in default, representing more than 
                850,000 individual loans.''.
                    (F) ``While lenders do provide the terms of 
                agreement in promissory notes, including associated 
                benefits and protections, many borrowers state they 
                were unaware of the categorical differences between 
                federal and private protections.''.
            (3) No requirement exists for a private education loan 
        borrower to designate an alternate point of contact on their 
        account in the event of their death or permanent disability.
            (4) An estimated 1,700,000 people sustain a traumatic brain 
        injury each year, with older adolescents aged 15 to 19 years 
        old more likely to sustain a traumatic brain injury than other 
        age groups.
            (5) It has been estimated that the annual incidence of 
        spinal cord injury, not including those who die at the scene of 
        an accident, is approximately 40 cases per 1,000,000 people in 
        the United States or approximately 12,000 new cases each year. 
        These injuries can lead to permanent disability or loss of 
        movement and can prohibit the victim from engaging in any 
        substantial gainful activity.
            (6) In the 2007-2008 academic year, 13 percent of students 
        attending a 4-year public institution of higher education, and 
        26.2 percent of students attending a 4-year private institution 
        of higher education, borrowed monies from private educational 
        lenders.
            (7) According to Sallie Mae, in 2009, the percentage of 
        cosigned private education loans increased from 66 percent to 
        84 percent of all private education loans.

SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS.

    (a) In General.--Section 140 of the Truth in Lending Act (15 U.S.C. 
1650) is amended by adding at the end the following:
    ``(g) Additional Protections Relating to Death or Disability of 
Borrower or Cosigner of a Private Education Loan.--
            ``(1) Clear and conspicuous description of borrower's and 
        cosigner's obligation.--In the case of any private educational 
        lender who extends a private education loan, the lender shall 
        clearly and conspicuously describe, in writing, the cosigner's 
        obligations with respect to the loan, including the effect the 
        death, disability, or inability to engage in any substantial 
        gainful activity of the borrower or any cosigner would have on 
        any such obligation, in language that the Bureau determines 
        would give a reasonable person a reasonable understanding of 
        the obligation being assumed by becoming a cosigner for the 
        loan.
            ``(2) Designation of individual to act on behalf of the 
        borrower.--In the case of any private educational lender who 
        extends a private education loan, the lender shall require the 
        borrower to designate an individual to have the legal authority 
        to act on behalf of the borrower with respect to the private 
        education loan in the event of the borrower's death, 
        disability, or inability to engage in any substantial gainful 
        activity.
            ``(3) Counseling.--In the case of any private educational 
        lender who extends a private education loan, the lender shall 
        ensure that the borrower, and any cosigner, receives 
        comprehensive information on the terms and conditions of the 
        loan and of the responsibilities the borrower has with respect 
        to such loan, including the information described under section 
        485(l)(2) of the Higher Education Act of 1965 (20 U.S.C. 
        1092(l)(2)).
            ``(4) Model form.--The Bureau shall publish a model form 
        under section 105 for describing a cosigner's obligation for 
        purposes of paragraph (1).
            ``(5) Definition of death, disability, or inability to 
        engage in any substantial gainful activity.--For the purposes 
        of this subsection with respect to a borrower or cosigner, the 
        term `death, disability, or inability to engage in any 
        substantial gainful activity'--
                    ``(A) means any condition described in section 
                437(a) of the Higher Education Act of 1965 (20 U.S.C. 
                1087(a)); and
                    ``(B) shall be interpreted by the Bureau in such a 
                manner as to conform with the regulations prescribed by 
                the Secretary of Education under section 437(a) of such 
                Act (20 U.S.C. 1087(a)) to the fullest extent 
                practicable, including safeguards to prevent fraud and 
                abuse.''.
    (b) Definitions.--Subsection (a) of section 140 of the Truth in 
Lending Act (15 U.S.C. 1650(a)) is amended--
            (1) by redesignating paragraphs (1) through (8) as 
        paragraphs (2) through (9), respectively; and
            (2) by inserting before paragraph (2) (as redesignated by 
        paragraph (1)) the following:
            ``(1) the term `cosigner'--
                    ``(A) means any individual who is liable for the 
                obligation of another without compensation, regardless 
                of how designated in the contract or instrument;
                    ``(B) includes any person whose signature is 
                requested as condition to grant credit or to forbear on 
                collection; and
                    ``(C) does not include a spouse of an individual 
                referred to in subparagraph (A) whose signature is 
                needed to perfect the security interest in the loan;''.
    (c) Rulemaking.--Not later than the end of the 1-year period 
following the date of the enactment of this Act, the Bureau of Consumer 
Financial Protection shall issue regulations to carry out section 
140(g) of the Truth in Lending Act.

SEC. 3. FEDERAL STUDENT LOANS.

    (a) Counseling Information.--Section 485(l)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at 
the end the following:
                    ``(L) Information on the conditions required to 
                discharge the loan due to the death, disability, or 
                inability to engage in any substantial gainful activity 
                of the borrower in accordance with section 437(a), and 
                an explanation that, in the case of a private education 
                loan made through a private educational lender (as such 
                terms are defined in section 140 of the Truth in 
                Lending Act (15 U.S.C. 1650)), the borrower, the 
                borrower's estate, and any cosigner of such a private 
                education loan may be obligated to repay the full 
                amount of the loan, regardless of the death or 
                disability of the borrower or any other condition 
                described in section 437(a).
                    ``(M) Any repayment, refinance, deferment, 
                forbearance, or forgiveness opportunities available to 
                the borrower, or cosigner, in the event of either 
                individual's death, disability, or inability to engage 
                in any substantial gainful activity.
                    ``(N) The effect that the death, disability, or 
                inability to engage in any substantial gainful activity 
                of the borrower would have on the obligations of the 
                borrower and any cosigner of the loan.''.
    (b) Designation of Individual To Act on Behalf of the Borrower.--
Section 484(a)(4) of the Higher Education Act of 1965 (20 U.S.C. 
1091(a)(4)) is amended--
            (1) in subparagraph (A), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (B), by inserting ``and'' after the 
        semicolon; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) a designation by such student of an 
                individual who shall have the legal authority to act on 
                behalf of the student with respect to any loan to the 
                student under this title in the event of the student's 
                death, disability, or inability to engage in any 
                substantial gainful activity;''.