II 

117TH CONGRESS 

2D SESSION S. 4551 

To provide a consumer protection framework necessary to support the growth 

of accessible, affordable, and accountable financing options for postsecondary education, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 19, 2022 

Mr. YOUNG (for himself, Mr. WARNER, Mr. RUBIO, and Mr. COONS) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To provide a consumer protection framework necessary to 

support the growth of accessible, affordable, and accountable financing options for postsecondary education, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘ISA Student Protection Act of 2022’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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Sec. 2. Definitions. 

Sec. 3. Effective date. 

TITLE I—NEW CONSUMER PROTECTIONS SPECIFIC TO INCOME 

SHARE AGREEMENTS 

Sec. 101. Prohibition on acceleration; treatment of early completion mechanisms. 

Sec. 102. Consumer protections for educational income share agreements. 

Sec. 103. Discharge protections for ISA recipients. 

Sec. 104. Limitation on amounts treated as income under educational ISAs. 

TITLE II—TAX TREATMENT OF INCOME SHARE AGREEMENTS 

Sec. 201. Tax treatment. 

TITLE III—DISCLOSURES APPLICABLE TO INCOME SHARE 

AGREEMENTS 

Sec. 301. Disclosures. 

Sec. 302. Required disclosures for income share agreements. 

Sec. 303. Additional requirements for educational ISAs. 

Sec. 304. Advertising of income share agreements. 

TITLE IV—OTHER CLARIFICATIONS TO SUPPORT ISA PROGRAMS 

Sec. 401. Treatment under securities laws. 

Sec. 402. Treatment under bankruptcy laws. 

Sec. 403. Consent to continuing release of taxpayer information under educational ISAs and income share agreements. 

Sec. 404. Interplay with the Higher Education Act of 1965. 

TITLE V—APPLYING EXISTING CONSUMER PROTECTIONS TO 

INCOME SHARE AGREEMENTS 

Sec. 501. Equal access to income share agreements. 

Sec. 502. Prohibition on requiring preauthorized electronic fund transfers 

under the Electronic Fund Transfer Act. 

Sec. 503. Treatment under the Fair Credit Reporting Act. 

Sec. 504. Treatment under the Fair Debt Collection Practices Act. 

Sec. 505. Treatment of educational income share agreements for purposes of 

Military Lending Act. 

Sec. 506. Treatment under the Servicemembers Civil Relief Act. 

Sec. 507. Preservation of consumers’ claims and defenses. 

TITLE VI—RELATION TO OTHER LAWS 

Sec. 601. Treatment under other laws. 

Sec. 602. Relation to State law. 

TITLE VII—ENFORCEMENT AND REPORTING 

Sec. 701. Enforcement. 

Sec. 702. Reporting requirement for the Bureau of Consumer Financial Protection. 


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1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) ADVERSE ACTION.—The term ‘‘adverse ac4 tion’’— 

5 (A) means a denial or revocation of rights 

6 under an income share agreement, a change in 

7 the terms of an existing income share agree8 ment, or a refusal to grant an income share 

9 agreement in substantially the amount or on 

10 substantially the terms requested; and 

11 (B) does not include a refusal to extend 

12 additional disbursements or amounts financed 

13 under an income share agreement under an ex14 isting income share agreement arrangement 

15 if— 

16 (i) the applicant is delinquent or oth17 erwise in default; or 

18 (ii) such additional amounts would ex19 ceed a previously established limit on the 

20 amount financed. 

21 (2) AMOUNT FINANCED.—The term ‘‘amount 

22 financed’’ means, with respect to an income share 

23 agreement, the amounts credited or advanced by the 

24 ISA provider to the ISA recipient or on behalf of the 

25 ISA recipient. 


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1 (3) ANNUAL PERCENTAGE RATE.—The term 

2 ‘‘annual percentage rate’’ means the annual percent3 age rate described in section 1026.22(a) of title 12, 

4 Code of Federal Regulations. 

5 (4) APPLICANT.—The term ‘‘applicant’’ means, 

6 with respect to an income share agreement, any indi7 vidual who applies to an ISA provider directly or in8 directly for an extension, renewal, or continuation of 

9 an income share agreement and includes applications 

10 for an additional amount exceeding a previously es11 tablished limit on the amount financed. 

12 (5) BUREAU.—The term ‘‘Bureau’’ means the 

13 Bureau of Consumer Financial Protection. 

14 (6) COMPARABLE LOAN.—The term ‘‘com15 parable loan’’ means, with respect to an income 

16 share agreement, a loan that— 

17 (A) has an amount financed, as described 

18 in section 1026.18(b) of title 12, Code of Fed19 eral Regulations, that is equal to the total 

20 amount financed, as defined in paragraph (2), 

21 for the income share agreement; 

22 (B) has— 

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1 quency of payments as the income share 

2 agreement; and 

3 (ii) an expected number of payments 

4 equal to the ISA maximum number of pay5 ments; and 

6 (C) is fully amortized over the ISA dura7 tion, with substantially equal periodic payments 

8 of principal and interest. 

9 (7) CONSUMER.—The term ‘‘consumer’’ means 

10 a natural person using an income share agreement 

11 for personal, family, or household purposes. 

12 (8) CONSUMER PROTECTION REGULATION.— 

13 The term ‘‘consumer protection regulation’’ means a 

14 regulation that the Bureau is authorized to prescribe 

15 under Federal consumer financial law, as defined in 

16 section 1002 of the Consumer Financial Protection 

17 Act of 2010 (12 U.S.C. 5481). 

18 (9) COVERED EDUCATIONAL INSTITUTION.— 

19 The term ‘‘covered educational institution’’— 

20 (A) means— 

21 (i) an educational institution that 

22 would be an institution of higher edu23 cation, if such determination was made 

24 without regard to the institution’s accredi25 tation status; and 


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1 (ii) an institution-affiliated organiza2 tion, as defined in section 151 of the High3 er Education Act of 1965 (20 U.S.C. 

4 1019); and 

5 (B) includes an agent, officer, or employee 

6 of the institution of higher education or institu7 tion-affiliated organization. 

8 (10) DATE OF THE ISA.—The term ‘‘date of the 

9 ISA’’ means the date that is the later of— 

10 (A) the date on which the income share 

11 agreement is signed by the ISA recipient and 

12 the ISA provider; or 

13 (B) the date on which the income share 

14 agreement is accepted by the ISA recipient and 

15 the ISA provider. 

16 (11) DIRECTOR.—The term ‘‘Director’’ means 

17 the Director of the Bureau. 

18 (12) DISBURSEMENT.—The term ‘‘disburse19 ment’’, when used with respect to an income share 

20 agreement, means the advance of ISA financing to 

21 an ISA recipient or the advancing of ISA financing 

22 to a third party on the ISA recipient’s behalf. 

23 (13) EDUCATIONAL ISA; EDUCATIONAL INCOME

24 SHARE AGREEMENT.—The term ‘‘educational ISA’’ 

25 or ‘‘educational income share agreement’’— 


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1 (A) means an income share agreement 

2 that— 

3 (i) is not made, insured, or guaran4 teed under title IV of the Higher Edu5 cation Act of 1965 (20 U.S.C. 1070 et 

6 seq.) or another federally subsidized edu7 cational finance program; 

8 (ii) pays amounts to, or on behalf of, 

9 the ISA recipient for— 

10 (I) costs associated with a post11 secondary training program, or any 

12 other program designed to increase 

13 the individual’s human capital, em14 ployability, or earning potential (and 

15 not limited to programs eligible to 

16 participate under title IV of the High17 er Education Act of 1965 (20 U.S.C. 

18 1070 et seq.)); 

19 (II) any personal expenses (such 

20 as books, supplies, transportation, and 

21 living costs) incurred by the individual 

22 while enrolled in a program described 

23 in subclause (I); 

24 (III) any other costs or expenses 

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1 fied higher education expense’’, as de2 fined in section 529(e)(3)(A) of the 

3 Internal Revenue Code of 1986; and 

4 (IV) the refinancing of loans or 

5 income share agreements used for the 

6 purposes described in subclauses (I) 

7 through (III), and without regard as 

8 to whether the income share agree9 ment is provided by the educational 

10 institution that the ISA recipient at11 tends; and 

12 (B) does not include a loan, open-end cred13 it, or any loan or income share agreement that 

14 is secured by real property or a dwelling. 

15 (14) EDUCATION LOAN.—The term ‘‘education 

16 loan’’ means— 

17 (A) a loan made, insured, or guaranteed 

18 under title IV of the Higher Education Act of 

19 1965 (20 U.S.C. 1070 et seq.) or any other 

20 loan made, insured, or guaranteed by the Fed21 eral Government; or 

22 (B) a private education loan, as such term 

23 is defined in section 140(a) of the Truth in 

24 Lending Act (15 U.S.C. 1650(a)). 


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1 (15) INCOME.—The term ‘‘income’’ means the 

2 ISA Recipient’s income, as established in the income 

3 share agreement under section 302(d)(8), subject to 

4 section 104. 

5 (16) INCOME SHARE AGREEMENT.— 

6 (A) IN GENERAL.—The term ‘‘income 

7 share agreement’’ means a financial product 

8 whereby— 

9 (i)(I) the ISA provider credits or ad10 vances financing to the ISA recipient or to 

11 a third party on behalf of the ISA recipi12 ent; or 

13 (II) if the ISA provider is a merchant 

14 financing the sale of goods or services to 

15 the ISA recipient via the financial product, 

16 the ISA provider credits the amount fi17 nanced toward the purchase of such goods 

18 or services; 

19 (ii) the ISA recipient is obligated to 

20 make periodic ISA payments (if any be21 come due) to the ISA provider in the fu22 ture calculated based upon and determined 

23 by the ISA recipient’s future income; 

24 (iii) the ISA recipient’s obligation to 

25 make payments (if any become due) to the 


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1 ISA provider is conditional on the ISA re2 cipient’s income exceeding the income 

3 threshold set in the income share agree4 ment; 

5 (iv) there is an ISA duration after 

6 which the obligation is complete regardless 

7 of how much has been paid (as long as the 

8 ISA recipient has paid any prior amounts 

9 due); 

10 (v) the ISA provider and the ISA re11 cipient enter into an agreement that, as of 

12 the date of the ISA, includes each element 

13 described in clauses (i) through (iv); and 

14 (vi) the agreement states that it is an 

15 income share agreement and subject to this 

16 Act. 

17 (B) SPECIAL RULE.—If a provider offers a 

18 financial product that meets the requirements 

19 of clauses (i) through (v) but does not include 

20 the statement described in clause (vi), then the 

21 financial product is not an income share agree22 ment and shall be considered credit. 

23 (17) INCOME THRESHOLD.—The term ‘‘income 

24 threshold’’ means a fixed dollar amount that is the 

25 minimum income per payment period that an ISA 


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1 recipient is required to earn before the ISA recipient 

2 is required to make a payment on an income share 

3 agreement for such payment period. 

4 (18) INSTITUTION OF HIGHER EDUCATION.— 

5 The term ‘‘institution of higher education’’ has the 

6 meaning given the term in section 102 of the Higher 

7 Education Act of 1965 (20 U.S.C. 1002). 

8 (19) ISA DURATION.—The term ‘‘ISA dura9 tion’’ means the maximum length of time during 

10 which the income of an ISA recipient can be subject 

11 to an ISA payment (absent periods of payment relief 

12 pause at the request of the ISA recipient). 

13 (20) ISA FINANCING.—The term ‘‘ISA financ14 ing’’ means the disbursement of funds by an ISA 

15 provider under an income share agreement. 

16 (21) ISA MAXIMUM NUMBER OF PAYMENTS.— 

17 The term ‘‘ISA maximum number of payments’’ 

18 means the maximum number of ISA payments (dur19 ing ISA payment periods in which the ISA recipi20 ent’s income is greater than the income threshold) 

21 that an ISA recipient could be required to make. 

22 (22) ISA PAYMENT.—The term ‘‘ISA pay23 ment’’— 

24 (A) means the amount of an ISA recipi25 ent’s periodic payment obligation, based on the 


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1 terms of the income share agreement, during 

2 any payment period for which the ISA recipi3 ent’s income is greater than the income thresh4 old; and 

5 (B) is calculated using the ISA payment 

6 calculation method, based on the ISA recipi7 ent’s income for the specified period. 

8 (23) ISA PAYMENT CALCULATION METHOD.— 

9 The term ‘‘ISA payment calculation method’’ means 

10 the ISA percentage, or the schedule of fixed dollar 

11 amounts based on the ISA recipient’s income for a 

12 payment period, that is used to calculate an ISA re13 cipient’s ISA payment under the income share 

14 agreement. 

15 (24) ISA PAYMENT WINDOW.—The ‘‘ISA pay16 ment window’’ means the period during which the 

17 ISA recipient is required to make ISA payments in 

18 periods where the ISA recipient’s income is greater 

19 than the income threshold for the income share 

20 agreement. 

21 (25) ISA PERCENTAGE.—The term ‘‘ISA per22 centage’’ means a percentage of income (or schedule 

23 of percentages of income based on the ISA recipi24 ent’s income in a given ISA payment period) used 


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1 to calculate an ISA recipient’s ISA payment pursu2 ant to an income share agreement. 

3 (26) ISA PROVIDER.—The term ‘‘ISA provider’’ 

4 means a person that provides financing to an ISA 

5 recipient pursuant to an income share agreement or, 

6 in the case of a person who is a merchant financing 

7 the sale of goods or services to the ISA recipient, the 

8 merchant. 

9 (27) ISA RECIPIENT.—The term ‘‘ISA recipi10 ent’’ means a consumer that receives financing from 

11 an ISA provider pursuant to an income share agree12 ment. 

13 (28) LOAN.—The term ‘‘loan’’ means a finan14 cial product that— 

15 (A) is credit, as defined in section 

16 1026.2(a) of title 12, Code of Federal Regula17 tions; 

18 (B) is not an income share agreement; and 

19 (C) involves the advance of a sum of 

20 money to a borrower under an obligation to 

21 repay the principal with a corresponding right 

22 to defer payment of the principal balance with 

23 or without interest. 


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1 (29) LOAN COMPARISON.—The term ‘‘loan com2 parison’’ means the comparison table required under 

3 section 302(d)(9). 

4 (30) PAYMENT RELIEF PAUSE.—The term 

5 ‘‘payment relief pause’’ means a period of time 

6 that— 

7 (A) is requested by the ISA recipient dur8 ing which any payment obligation the ISA re9 cipient would have is suspended; and 

10 (B) does not count toward an ISA recipi11 ent’s ISA payment window or ISA maximum 

12 number of payments. 

13 (31) PERSON.—The term ‘‘person’’ means a 

14 natural person or an organization, including a cor15 poration, partnership, proprietorship, association, co16 operative, estate, trust, or government unit. 

17 (32) POVERTY LINE.—The term ‘‘poverty line’’ 

18 has the meaning given the term in section 673 of the 

19 Community Services Block Grant Act (42 U.S.C. 

20 9902). 

21 (33) SECRETARY.—The term ‘‘Secretary’’ 

22 means the Secretary of Education. 

23 (34) STATE.—The term ‘‘State’’ means the sev24 eral States of the United States, the Commonwealth 

25 of Puerto Rico, the District of Columbia, Guam, 


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1 American Samoa, the Virgin Islands, the Northern 

2 Mariana Islands, the Federated States of Micro3 nesia, the Republic of the Marshall Islands, and the 

4 Republic of Palau. 

5 (35) STATE LAW.—The term ‘‘State law’’ 

6 means— 

7 (A) any law, decision, rule, regulation, or 

8 other action having the effect of a law of any 

9 State or any political subdivision of a State, or 

10 any agency or instrumentality of a State or po11 litical subdivision of a State; and 

12 (B) any law of the United States applica13 ble only to the District of Columbia. 

14 SEC. 3. EFFECTIVE DATE. 

15 This Act, and the amendments made by this Act, 

16 shall take effect on the date that is 180 days after the 

17 date of enactment of this Act. 

18 TITLE I—NEW CONSUMER PRO19 TECTIONS SPECIFIC TO IN20 COME SHARE AGREEMENTS 

21 SEC. 101. PROHIBITION ON ACCELERATION; TREATMENT 

22 OF EARLY COMPLETION MECHANISMS. 

23 (a) NO ACCELERATION.— 

24 (1) IN GENERAL.—An ISA provider shall not 

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1 ment that accelerates an amount against an ISA re2 cipient in the event of a default under the income 

3 share agreement. 

4 (2) EFFECT OF ACCELERATION CLAUSE.—Any 

5 agreement with an acceleration mechanism described 

6 in paragraph (1) shall, for purposes of all Federal 

7 law, be treated as credit under Federal law and shall 

8 not be treated as an income share agreement. 

9 (b) NO IMPACT ON EARLY COMPLETION MECHA10 NISMS.—Notwithstanding subsection (a)— 

11 (1) an income share agreement may contain an 

12 early completion provision that allows the ISA re13 cipient to terminate the income share agreement 

14 prior to any trigger terminating further obligations 

15 under the income share agreement (such as a total 

16 cap on payments due to the ISA provider or other 

17 rights to partially or fully terminate further obliga18 tions under the income share agreement) if the early 

19 completion provision is optional to the ISA recipient 

20 and within the ISA recipient’s control; and 

21 (2) such early completion mechanism shall not 

22 be treated as a form of acceleration prohibited under 

23 subsection (a), an early completion penalty, or a pre24 payment penalty. 


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1 SEC. 102. CONSUMER PROTECTIONS FOR EDUCATIONAL IN2 COME SHARE AGREEMENTS. 

3 (a) MONTHLY PAYMENT AFFORDABILITY FOR EDU4 CATIONAL ISAS.— 

5 (1) MAXIMUM ISA INCOME OBLIGATION FOR

6 EDUCATIONAL ISAS.—An ISA provider shall not 

7 enter into an educational ISA with an ISA recipient 

8 if the ISA recipient would be committing more than 

9 a total of 20 percent of the student’s future income 

10 toward the payment of such educational ISA and all 

11 other educational ISAs of the ISA recipient. 

12 (2) SELF-CERTIFICATION.—In calculating the 

13 portion of a student’s future income for purposes of 

14 this subsection, the ISA provider may rely on a self15 certification from the ISA recipient regarding the 

16 ISA recipient’s outstanding educational ISAs, as of 

17 the date of the agreement. 

18 (3) CALCULATION METHODOLOGY AND RE19 QUIREMENTS.— 

20 (A) IN GENERAL.—For the purposes of 

21 calculating the portion of an ISA recipient’s fu22 ture income that would be consumed by the 

23 educational ISA for which the ISA recipient has 

24 applied and all other educational ISAs of the 

25 ISA recipient as of the date of the agreement, 


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1 the ISA provider shall calculate the aggregate 

2 future burden— 

3 (i) in any case where the income 

4 threshold of the educational ISA is less 

5 than the maximum described in subpara6 graph (B), at hypothetical future income 

7 levels from such income threshold to the 

8 such maximum, in increments of $10,000; 

9 and 

10 (ii) in any case where the income 

11 threshold of the educational ISA is equal 

12 to or greater than such maximum, at such 

13 income threshold. 

14 (B) MAXIMUM.—The maximum described 

15 in this subparagraph shall be the greater of— 

16 (i)(I) for fiscal year 2023, $70,000; or 

17 (ii) for fiscal year 2024 and each sub18 sequent fiscal year, the maximum for the 

19 preceding fiscal year— 

20 (I) increased by the percentage 

21 increase in the consumer price index; 

22 and 

23 (II) rounded to the nearest 

24 $1,000; and 


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1 (iii) in the case of an ISA recipient 

2 who has (as of the date of the agreement), 

3 or has applied for, an educational ISA that 

4 uses a schedule of income percentages or a 

5 schedule of fixed amounts as the ISA pay6 ment calculation method, the highest in7 come level referenced by a schedule for any 

8 such educational ISA. 

9 (C) CALCULATION.— 

10 (i) IN GENERAL.—The terms of an 

11 educational ISA for which the ISA recipi12 ent has applied cannot cause the student’s 

13 aggregate future burden (defined as the 

14 total amounts expected to be due under all 

15 educational ISAs of the ISA recipient as of 

16 the date of the agreement, and all edu17 cational ISAs for which the ISA recipient 

18 is applying) to exceed the limit in para19 graph (1) at any of the income increments 

20 described in subparagraph (A). 

21 (ii) CALCULATION METHOD.—For the 

22 purpose of calculating the percentage bur23 den of an educational ISA at a given fu24 ture income level, the ISA provider shall, 

25 as applicable, use— 


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1 (I) the income percentage that 

2 would be applicable for the edu3 cational ISA at such income level; or 

4 (II) the fixed amount applicable 

5 for the educational ISA at such in6 come level, divided by such income 

7 level. 

8 (4) PROTECTIONS DURING PERIODS OF LOW

9 EARNINGS.— 

10 (A) IN GENERAL.—The educational ISA 

11 shall provide that when an ISA recipient has an 

12 income that is equal to or below the income 

13 threshold of the educational ISA, the ISA pay14 ment obligation is zero dollars. 

15 (B) THRESHOLD AMOUNT.—The income 

16 threshold for an educational ISA shall be an 

17 amount such that the difference between the 

18 ISA recipient’s income for the payment period, 

19 minus the subtraction of any ISA obligation, is 

20 not less than 200 percent of the poverty line for 

21 a single person (as defined in section 673 of the 

22 Community Services Block Grant Act (42 

23 U.S.C. 9902)), prorated for the payment pe24 riod. 


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1 (5) REQUIRED PAYMENT RELIEF PAUSES.—An 

2 educational ISA shall offer not less than 3 months 

3 of voluntary payment relief pauses (as long as the 

4 ISA recipient’s current income at the time of re5 questing the payment relief pause is equal to or less 

6 than 400 percent of the Federal poverty line (as de7 fined in section 673 of the Community Services 

8 Block Grant Act (42 U.S.C. 9902)) for a single indi9 vidual) for every 30 income-determined payments re10 quired under the educational ISA. 

11 (b) ENSURING APPROPRIATE RISK SHARING FOR

12 EDUCATIONAL ISAS.—The payments required under an 

13 educational ISA for an individual with income during the 

14 payment term that is less than or equal to 300 percent 

15 of the poverty line for a single individual, prorated for the 

16 payment period, shall not exceed the payments on a com17 parable loan that bears interest at a rate less than or equal 

18 to one-half of the annual percentage rate of interest limi19 tation under section 987(b) of title 10, United States 

20 Code. 

21 (c) LIMITS ON DURATION OF EDUCATIONAL ISA OB22 LIGATION.— 

23 (1) ISA MAXIMUM NUMBER OF PAYMENTS.— 

24 The ISA maximum number of payments shall not 

25 exceed 240 monthly payments. 


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1 (2) ISA DURATION.—The ISA duration of an 

2 educational ISA shall not exceed 360 months (except 

3 in the case of an extension requested by the ISA re4 cipient). 

5 (d) NON-INTERFERENCE.—An educational ISA shall 

6 not be construed to give the contract holder any rights 

7 over an individual’s actions other than as provided in this 

8 Act. 

9 SEC. 103. DISCHARGE PROTECTIONS FOR ISA RECIPIENTS. 

10 (a) PERMANENT AND TOTAL DISABILITY.—In any 

11 case where an ISA recipient would be deemed totally and 

12 permanently disabled for purposes of benefits adminis13 tered by the Department of Veterans Affairs or the Social 

14 Security Administration (determined without regard to 

15 whether the recipient receives such benefits), all further 

16 obligations of the ISA recipient under the income share 

17 agreement shall terminate, except those accruing before 

18 the date such a determination would apply. 

19 (b) DEATH.—Upon the death of an ISA recipient, all 

20 further obligations of the ISA recipient under the income 

21 share agreement shall terminate, except those obligations 

22 accruing before the ISA recipient’s date of death. 


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1 SEC. 104. LIMITATION ON AMOUNTS TREATED AS INCOME 

2 UNDER EDUCATIONAL ISAS. 

3 (a) IN GENERAL.—For purposes of calculating the 

4 obligation of an ISA recipient to make ISA payments 

5 under an educational ISA, the income of the ISA recipient 

6 shall not include— 

7 (1) the income of any child or dependent of the 

8 ISA recipient; 

9 (2) any item of income which is not included in 

10 the gross income of the ISA recipient; 

11 (3) any amount received from an individual re12 tirement plan (as defined in section 7701 of the In13 ternal Revenue Code of 1986), a pension, or an an14 nuity; or 

15 (4) any social security benefit (as defined in 

16 section 86 of such Code). 

17 (b) ESTIMATING INCOME.— 

18 (1) IN GENERAL.—In the event that an ISA re19 cipient fails to provide income documentation as rea20 sonably required by the income share agreement, an 

21 ISA provider may assign an amount of income to 

22 the participant and compute the monthly payment 

23 amount for the participant by any of the following 

24 methods, to the extent disclosed in the income share 

25 agreement: 


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1 (A) Assigning an income amount obtained 

2 from a reasonably reliable third party or a con3 sumer reporting agency, as defined in section 

4 603(f) of the Fair Credit Reporting Act (15 

5 U.S.C. 1681a(f)). 

6 (B) If the participant previously provided 

7 income documentation or has had an income as8 signed in the preceding 1-year period, assuming 

9 that such income has increased by up to 10 per10 cent, but such increase may not be applied 

11 more than once per 1-year period. 

12 (C) Contacting the employer of the partici13 pant, or any person or entity reasonably be14 lieved to the employer of the participant, to ob15 tain, verify, or update the income information 

16 of the participant. 

17 (D) Contacting the State revenue depart18 ment or the Internal Revenue Service to obtain 

19 the most recent information available about the 

20 income of the participant. 

21 (E) For educational ISA providers, in any 

22 case where the ISA provider has no prior his23 tory of income information from the partici24 pant, assigning a reasonable qualified income 

25 based on— 


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•S 4551 IS

1 (i) the median income for individuals 

2 working in the profession for which the 

3 educational program of the participant was 

4 intended to prepare the participant, as de5 termined by information published by the 

6 Bureau of Labor Statistics or other rea7 sonably reliable publicly available data 

8 sources; or 

9 (ii) the median income of participants 

10 who attended the same or a reasonably 

11 comparable covered educational program or 

12 course of study, as determined by informa13 tion published by the Bureau of Labor 

14 Statistics or other reasonably reliable pub15 licly available data sources. 

16 (2) NOTIFICATION.—If an ISA provider assigns 

17 an income to the income share agreement of a par18 ticipant, the ISA provider— 

19 (A) shall notify the participant in the 

20 monthly billing statement, and in each billing 

21 statement thereafter while the assigned income 

22 remains applicable to the income share agree23 ment of the participant, that income has been 

24 assigned and of the rights of the participant 

25 under this section; 


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•S 4551 IS

1 (B) in any tax year for which the ISA pro2 vider has made an assumption about an individ3 ual’s income using any of the methods de4 scribed in the prior paragraph and if the partic5 ipant has authorized ongoing access to the par6 ticipant’s return information under section 403, 

7 shall request such information in each year of 

8 the payment term; 

9 (C) if the participant does provide income 

10 information as reasonably required by the in11 come share agreement within 1 year of the date 

12 on which the ISA provider notified the partici13 pant that assigned income shall be applied to 

14 the income share agreement or if the ISA pro15 vider receives updated income information 

16 through return information authorized under 

17 section 403, then, within 15 days after the date 

18 on which the ISA provider receives such infor19 mation, shall— 

20 (i) update each prior instance in 

21 which assigned income was applied using 

22 such new income information; and 

23 (ii) reconcile any difference in 

24 amounts owed by the participant based on 

25 those updates to prior income; and 


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•S 4551 IS

1 (D) if the participant provides income in2 formation more than 1 year after the ISA pro3 vider first assigned income to the income share 

4 agreement of the participant, may, but shall not 

5 be obligated to, update each prior instance in 

6 which assigned income was applied using the in7 come information provided by the participant. 

8 (3) RECORDS RETENTION.—An ISA provider 

9 that assigns income to an income share agreement 

10 shall retain all applicable records relating to the 

11 method and data sources used to make such esti12 mation for 3 years after the end of that income 

13 share agreement. 

14 TITLE II—TAX TREATMENT OF 

15 INCOME SHARE AGREEMENTS 

16 SEC. 201. TAX TREATMENT. 

17 (a) IN GENERAL.—Subchapter B of chapter 1 of the 

18 Internal Revenue Code of 1986 is amended by adding at 

19 the end the following: 

20 ‘‘PART XII—RULES RELATING TO QUALIFIED 

21 EDUCATIONAL INCOME SHARING AGREEMENTS 

‘‘Sec. 293. Rules related to qualified educational ISAs. 


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•S 4551 IS

1 ‘‘SEC. 293. RULES RELATED TO QUALIFIED EDUCATIONAL 

2 ISAS. 

3 ‘‘(a) IN GENERAL.—For purposes of this title, an 

4 educational ISA shall not be treated as indebtedness. 

5 ‘‘(b) TREATMENT OF ISA RECIPIENT.— 

6 ‘‘(1) INCOME EXCLUSION.—In the case of an 

7 individual— 

8 ‘‘(A) IN GENERAL.—Gross income shall 

9 not include so much of the amount received 

10 under an educational ISA as does not exceed 

11 amounts paid or credited to such individual 

12 under such qualified educational ISA for costs 

13 and expenses described in section 

14 2(13)(A)(ii)(II) of the ISA Student Protection 

15 Act of 2022. 

16 ‘‘(B) DIFFERENCE IN PAYMENTS.—In any 

17 case in which the amount provided to the indi18 vidual under the educational ISA exceeds the 

19 total payments made by the individual under 

20 the educational ISA, gross income shall not in21 clude the amount of such excess. 

22 ‘‘(2) CERTAIN AMOUNTS TREATED AS INTEREST

23 ON QUALIFIED EDUCATION LOANS.— 

24 ‘‘(A) IN GENERAL.—For purposes of sec25 tion 221, the amount described in subpara26 graph (B) with respect to any educational ISA 


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•S 4551 IS

1 shall be treated as interest paid by the taxpayer 

2 during the taxable year on a qualified education 

3 loan. 

4 ‘‘(B) AMOUNT DESCRIBED.—The amount 

5 described in this subparagraph with respect to 

6 any educational ISA is, for any taxable year, 

7 the excess of— 

8 ‘‘(i) amounts paid by the taxpayer to 

9 another person under the terms of a quali10 fied educational ISA during such taxable 

11 year, over 

12 ‘‘(ii) the excess of— 

13 ‘‘(I) the aggregate amount re14 ceived under such qualified edu15 cational ISA during such taxable year 

16 and all preceding taxable years, over 

17 ‘‘(II) the aggregate amounts paid 

18 by the taxpayer to another person 

19 under the terms of such qualified edu20 cational ISA during all preceding tax21 able years. 

22 ‘‘(3) AMOUNTS TREATED AS EDUCATIONAL AS23 SISTANCE.—For purposes of section 127(c)(1)(B), 

24 amounts paid by an employer in satisfaction of obli25 gations of an employee under a qualified educational 


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•S 4551 IS

1 ISA shall be treated in the same manner as a pay2 ment of principal or interest on a qualified education 

3 loan. 

4 ‘‘(c) TREATMENT OF ISA FUNDER.—Gross income 

5 shall not include so much of any amount received as a 

6 payment from a recipient under an educational ISA fund7 ed by the taxpayer as does not exceed the excess of— 

8 ‘‘(1) the aggregate amount of financing pro9 vided by the taxpayer under such educational ISA, 

10 over 

11 ‘‘(2) the aggregate amount of such payments 

12 taken into account under this subsection by the tax13 payer for all preceding taxable years. 

14 ‘‘(d) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) EDUCATIONAL ISA.—The term ‘edu16 cational ISA’ has the meaning given such term 

17 under section 2 of the ISA Student Protection Act 

18 of 2022. 

19 ‘‘(2) QUALIFIED EDUCATIONAL ISA.—The term 

20 ‘qualified educational ISA’ means an educational 

21 ISA that is extended for expenses at an institution 

22 of higher education that participates in a student fi23 nancial assistance program under title IV of the 

24 Higher Education Act of 1965 (20 U.S.C. 1070 et 

25 seq.).’’. 


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•S 4551 IS

1 (b) CONFORMING AMENDMENT.—The table of parts 

2 for subchapter B of chapter 1 of the Internal Revenue 

3 Code of 1986 is amended by adding at the end the fol4 lowing new item: 

‘‘PART XII—RULES RELATING TO QUALIFIED EDUCATIONAL INCOME

SHARING AGREEMENTS’’. 

5 TITLE III—DISCLOSURES APPLI6 CABLE TO INCOME SHARE 

7 AGREEMENTS 

8 SEC. 301. DISCLOSURES. 

9 The following disclosures shall be provided to ISA re10 cipients: 

11 (1) IN GENERAL.—An ISA provider (regardless 

12 of whether the ISA provided is an educational ISA) 

13 shall provide, to any individual that applies for or 

14 signs an income share agreement, a written docu15 ment that clearly and simply discloses the informa16 tion required by this Act. 

17 (2) APPLICATION.—The provisions of this title 

18 shall not apply to— 

19 (A) income share agreements primarily for 

20 business, commercial, or agricultural purposes; 

21 (B) government or governmental agencies 

22 or instrumentalities; 

23 (C) organizations; or 


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•S 4551 IS

1 (D) transactions for which the Bureau, by 

2 rule, determines that coverage under the provi3 sions of this title are not necessary to carry out 

4 the purposes of this title. 

5 (3) REGULATIONS.—Not later than 270 days 

6 after the date of enactment of this Act, the Bureau 

7 shall prescribe regulations to carry out the purposes 

8 of this title, which may contain such additional re9 quirements, classifications, differentiations, or other 

10 provisions, and may provide for such adjustments 

11 and exceptions for all or any class of transactions, 

12 as in the judgment of the Bureau are necessary or 

13 proper to effectuate the purposes of this title, to pre14 vent circumvention or evasion thereof, or to facilitate 

15 compliance therewith. 

16 (4) MODEL DISCLOSURE FORMS AND

17 CLAUSES.— 

18 (A) IN GENERAL.—Not later than 270 

19 days after the date of enactment of this Act, 

20 the Bureau shall publish a model integrated 

21 disclosure for educational ISAs and a model in22 tegrated disclosure for income share agreements 

23 generally in order to facilitate compliance with 

24 the disclosure requirements of this Act and aid 

25 ISA recipients in understanding the transaction 


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•S 4551 IS

1 by utilizing readily understandable language to 

2 simplify the technical nature of the disclosures. 

3 (B) CONSIDERATION.—In devising the dis4 closure forms required under subparagraph (A), 

5 the Bureau shall consider the use by ISA pro6 viders of data processing or similar automated 

7 equipment. 

8 (C) RULE OF CONSTRUCTION.—Nothing in 

9 this title may be construed to require an ISA 

10 provider to use any model form or clause pub11 lished by the Bureau under this section. 

12 (D) COMPLIANCE.—An ISA provider shall 

13 be deemed to be in compliance with the disclo14 sure provisions of this title with respect to other 

15 than numerical disclosures if the ISA pro16 vider— 

17 (i) uses any appropriate model form 

18 or clause as published by the Bureau 

19 under this section; or 

20 (ii) uses any such model form or 

21 clause and changes the form or clause 

22 by— 

23 (I) deleting any information that 

24 is not required under this title; or 


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•S 4551 IS

1 (II) rearranging the format, if in 

2 making such deletion or rearranging 

3 the format, the ISA provider does not 

4 affect the substance, clarity, or mean5 ingful sequence of the disclosure. 

6 (5) PROCEDURES APPLICABLE FOR ADOPTION

7 OF MODEL FORMS AND CLAUSES.—Model disclosure 

8 forms and clauses under this section shall be adopt9 ed by the Bureau after notice duly given in the Fed10 eral Register and an opportunity for public comment 

11 in accordance with section 553 of title 5, United 

12 States Code. 

13 (6) EFFECTIVE DATES OF REGULATIONS CON14 TAINING NEW DISCLOSURE REQUIREMENTS.— 

15 (A) IN GENERAL.—Any regulation of the 

16 Bureau, or any amendment or interpretation 

17 thereof, requiring any disclosure which differs 

18 from the disclosures previously required by this 

19 title or any regulation of the Bureau promul20 gated under this title shall have an effective 

21 date of that October 1 which follows by not less 

22 than 6 months the date of promulgation, except 

23 that the Bureau may at its discretion take in24 terim action by regulation, amendment, or in25 terpretation to lengthen the period of time perVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 mitted for ISA providers to adjust their forms 

2 to accommodate new requirements or shorten 

3 the length of time for ISA providers to make 

4 such adjustments when the ISA provider makes 

5 a specific finding that such action is necessary 

6 to comply with the findings of a court or to pre7 vent unfair or deceptive disclosure practices. 

8 (B) COMPLIANCE.—Notwithstanding sub9 paragraph (A), any ISA provider may comply 

10 with any such newly promulgated disclosure re11 quirements prior to the effective date of the re12 quirements. 

13 (7) DEFERENCE.—Notwithstanding any power 

14 granted to any Federal agency under this Act, the 

15 deference that a court affords to the Bureau with re16 spect to a determination made by the Bureau relat17 ing to the meaning or interpretation of any provision 

18 of this Act, shall be applied as if the Bureau were 

19 the only agency authorized to apply, enforce, inter20 pret, or administer the provisions of this Act. 

21 SEC. 302. REQUIRED DISCLOSURES FOR INCOME SHARE 

22 AGREEMENTS. 

23 (a) DISCLOSURES REQUIREMENTS FOR ALL ISAS.— 

24 (1) IN GENERAL.—The ISA provider shall make 

25 the disclosures required by this section clearly and 


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•S 4551 IS

1 conspicuously in writing, in a form that the ISA re2 cipient may retain. 

3 (2) ELECTRONIC FORM.—The disclosures re4 quired by this section may be provided to the ISA 

5 recipient in electronic form in accordance with the 

6 Electronic Signatures in Global and National Com7 merce Act (15 U.S.C. 7001 et seq.). 

8 (3) OTHER REQUIREMENTS.—The disclosures 

9 required by this section shall— 

10 (A) be grouped together; 

11 (B) be segregated from anything that is 

12 not such a disclosure; and 

13 (C) only contain information directly re14 lated to the disclosures required under this sec15 tion. 

16 (b) USE OF ESTIMATES.—If any information nec17 essary for an accurate disclosure is unknown to the ISA 

18 provider, the ISA provider shall make the disclosure based 

19 on the best information reasonably available at the time 

20 the disclosure is provided to the ISA recipient, and shall 

21 state clearly that the disclosure is an estimate. 

22 (c) MULTIPLE ISA PROVIDERS, MULTIPLE ISA RE23 CIPIENTS.— 

24 (1) MULTIPLE ISA PROVIDERS.—In any case 

25 where an income share agreement transaction inVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 volves more than one ISA provider, only one set of 

2 disclosures shall be given and the ISA providers 

3 shall agree among themselves which ISA provider 

4 shall comply with the requirements that this title im5 poses on any or all of the ISA providers. 

6 (2) MULTIPLE ISA RECIPIENTS.—In any case 

7 where an income share agreement transaction has 

8 more than one ISA recipient, the disclosures may be 

9 made to any ISA recipient whose income will be 

10 used to calculate the ISA payments due to the ISA 

11 provider. 

12 (d) CONTENT OF DISCLOSURES.—An ISA provider of 

13 an income share agreement (regardless of whether the in14 come share agreement is an educational ISA) shall pro15 vide, to any person that applies for or signs a consumer 

16 income share agreement, a written document that clearly 

17 and simply discloses the following information: 

18 (1) A statement that the income share agree19 ment is not a fixed payment installment loan, and 

20 that the amount the ISA recipient will be required 

21 to pay under the income share agreement may be 

22 more or less than the amount financed by the ISA 

23 provider and will vary in proportion to the ISA re24 cipient’s future income. An ISA provider may satisfy 

25 the requirements of this paragraph by providing a 


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•S 4551 IS

1 table that compares periodic payments under the 

2 ISA at different income levels showing that pay3 ments vary with income, or that also compares such 

4 periodic payments under the ISA at different income 

5 levels with a loan product. 

6 (2) In the case of an educational ISA, the fol7 lowing statement: ‘‘This income share agreement is 

8 not a grant or scholarship. If your income is above 

9 the income Threshold, you will have to make pay10 ments under this income share agreement.’’. 

11 (3) The following statement: ‘‘Payments due 

12 under this income share agreement are determined 

13 by your income. Your payments are calculated using 

14 the ISA payment calculation method described in 

15 your ISA. The amount you pay may be more than, 

16 equal to, or less than the amount financed.’’. 

17 (4) In a series of boxes or other device designed 

18 to feature the following information more promi19 nently than elsewhere in the income share agreement 

20 disclosures, the following information: 

21 (A) The term ‘‘Amount Financed’’ and the 

22 dollar amount of the amount funded, followed 

23 by a description that states, ‘‘The amount of 

24 funds you will receive or that will be credited on 

25 your behalf.’’. 


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•S 4551 IS

1 (B) The term ‘‘ISA Payment Calculation 

2 Method’’ and the following: 

3 (i) In the case of an ISA payment cal4 culation method that is a percentage (or 

5 schedule of percentages), such percentage 

6 (or schedule of percentages) followed by a 

7 description that states, ‘‘The percentage of 

8 your income used to calculate your ISA 

9 Payment.’’ and, if the ISA payment cal10 culation method is a schedule of percent11 ages, an explanation of where the ISA re12 cipient can learn more about how the ISA 

13 recipient’s income percentage is deter14 mined. 

15 (ii) In the case of an ISA payment 

16 calculation method that is a schedule of 

17 fixed dollar amounts calculated based on 

18 the ISA recipient’s income for a payment 

19 period, the schedule of fixed amounts (or a 

20 reference to the location of the schedule in 

21 the ISA) followed by a description that 

22 states, ‘‘The amount of your ISA payment 

23 will vary based on your income. See your 

24 ISA for more information.’’. 


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•S 4551 IS

1 (C) The term ‘‘Maximum Number of In2 come-Determined Payments’’ and the ISA max3 imum number of payments, followed by a de4 scription that states, ‘‘The maximum number of 

5 ISA Payments you will make when your income 

6 is above the income threshold.’’. 

7 (D) The term ‘‘Maximum Duration’’ and 

8 the ISA duration, followed by a description that 

9 states, ‘‘The maximum amount of time that you 

10 are required to make income-determined pay11 ments, excluding any extensions that you re12 quest.’’. 

13 (E) The term ‘‘Income Threshold’’ and the 

14 income threshold for the income share agree15 ment, followed by a description that states, 

16 ‘‘The minimum income you must make in order 

17 to trigger a payment obligation under this in18 come share agreement. If your income is less 

19 than or equal to this income threshold, you will 

20 not owe any ISA Payments for that period.’’. 

21 (5) A statement that during periods in which 

22 the ISA recipient’s income is not above the income 

23 threshold— 

24 (A) the ISA recipient will not owe an ISA 

25 payment for that period of time; and 


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•S 4551 IS

1 (B) any such period of non-payment will 

2 not count towards the ISA maximum number of 

3 payments but will count toward the ISA dura4 tion. 

5 (6) A statement that the obligations of the ISA 

6 recipient under the income share agreement would 

7 be dischargeable in a case under title 11, United 

8 States Code, in the same manner as a loan that is 

9 not described in section 523(a)(8) of title 11, United 

10 States Code. 

11 (7) A description of the terms under which the 

12 obligations of the ISA recipient under the income 

13 share agreement shall be extinguished in advance of 

14 the full ISA duration. 

15 (8) The definition of income to be used for pur16 poses of calculating the ISA recipient’s obligation 

17 under the income share agreement, subject to sec18 tion 104(a). 

19 (9) A comparison table that includes the fol20 lowing: 

21 (A)(i) The amounts and number of ISA 

22 payments that an ISA recipient would be re23 quired to pay under the income share agree24 ment at a range of annual income levels stated 

25 as both a monthly and annual income amount. 


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•S 4551 IS

1 (ii) The income levels used in the disclo2 sure under this paragraph shall include, at a 

3 minimum, the obligations for the ISA recipi4 ent— 

5 (I) with no income; 

6 (II) with income at the income thresh7 old; and 

8 (III) for various income scenarios, in9 cluding, at a minimum, calculations at an10 nual incomes of $40,000, $60,000, 

11 $80,000, $100,000, $125,000, $150,000, 

12 $175,000, and $200,000. 

13 (iii) The comparison table under this para14 graph shall include the following statement: 

15 ‘‘This table assumes you have the same Income 

16 over the entire term of your income share 

17 agreement. It does not take into account 

18 changes in Income. Your Income will likely 

19 change over time.’’. 

20 (B) The total of all ISA payments over the 

21 life of the income share agreement that the ISA 

22 recipient will have made in each of the income 

23 level scenarios described in subparagraph (A). 

24 (C) The amounts and number of pay25 ments, the total of all payments, and the anVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 nual percentage rate required to be paid under 

2 one or more comparable loans, including, at a 

3 minimum— 

4 (i) if elected by the Bureau, a loan at 

5 a fixed or variable rate and with a number 

6 of payments determined by the Bureau to 

7 be an approximation of the fixed or vari8 able interest rate available to ISA recipi9 ents in the private marketplace; 

10 (ii) for an educational ISA, a com11 parable loan made under part D of title IV 

12 of the Higher Education Act of 1965 (20 

13 U.S.C. 1087a et seq.) (including subsidized 

14 and unsubsidized scenarios), if the indi15 vidual would be eligible for such a loan; 

16 and 

17 (iii) for an income share agreement 

18 that is not an educational ISA, a loan or 

19 loans that the ISA provider believes, in 

20 good faith, represents other alternative 

21 loan options available for the ISA recipi22 ent. 

23 (10) A statement of the intent of the ISA pro24 vider to engage in an annual process of reconcili25 ation to determine if the ISA recipient’s ISA payVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 ments for the preceding year are more than, equal 

2 to, or less than the ISA payments owed under the 

3 income share agreement, including— 

4 (A) a description of the process in which 

5 the ISA recipient must participate in order for 

6 the ISA provider to verify the ISA recipient’s 

7 income; and 

8 (B) a description of any tax records or 

9 forms that the ISA recipient must execute or 

10 that the ISA provider intends to submit to the 

11 Internal Revenue Service. 

12 (11) A disclosure of the following items, to the 

13 extent applicable: 

14 (A) The amount that is or will be paid di15 rectly to the ISA recipient. 

16 (B) The amount that is or will be credited 

17 to the ISA recipient’s account to discharge obli18 gations owed to the ISA provider. 

19 (C) Each amount that is or will be paid to 

20 third persons by the ISA provider on the ISA 

21 recipient’s behalf, together with an identifica22 tion of or reference to the third person. 

23 (D) The total amount of any charges that 

24 will be paid by the ISA recipient before or at 

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•S 4551 IS

1 action, or have been withheld from the proceeds 

2 of the income share agreement. 

3 (12) The name and mailing address of the ISA 

4 provider. 

5 (13) A payment schedule that— 

6 (A) shows the date upon which the first 

7 ISA payment is expected to be due or, if such 

8 date is not reasonably knowable— 

9 (i) an estimated date using the best 

10 information available to the ISA provider; 

11 or 

12 (ii) a statement of the events that will 

13 trigger the first payment; and 

14 (B) reflects each date thereafter during the 

15 ISA duration that an ISA payment may be due. 

16 (e) ADDITIONAL DISCLOSURE ELEMENTS.—The Di17 rector may, through a rulemaking process— 

18 (1) add additional items to be disclosed under 

19 subsection (d) if consumer testing shows those ele20 ments would help consumers better understand the 

21 nature of the ISA obligation or better compare it 

22 with other products; and 

23 (2) require that additional income scenarios be 

24 included in the comparison table under paragraph 

25 (9)(A)(ii)(III), taking into account the income levels 


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•S 4551 IS

1 the ISA recipient might reasonably be expected to 

2 make given the intended use of the funds provided 

3 under the income share agreement, except in no case 

4 shall the number of scenarios exceed 20. 

5 SEC. 303. ADDITIONAL REQUIREMENTS FOR EDUCATIONAL 

6 ISAS. 

7 (a) ADDITIONAL DISCLOSURE TIMING RULES FOR

8 EDUCATIONAL ISAS.—The following additional provisions 

9 apply to any income share agreement that is an edu10 cational ISA: 

11 (1) APPLICATION AND SOLICITATION.— 

12 (A) IN GENERAL.—The ISA provider of an 

13 educational ISA that is to be used solely for 

14 postsecondary educational expenses shall pro15 vide the disclosures described in subsection 

16 (b)(1) with any application or solicitation for 

17 the educational ISA. For purposes of this sec18 tion, the term ‘‘solicitation’’ means an offer of 

19 an income share agreement that does not re20 quire the potential ISA recipient to complete an 

21 application. 

22 (B) TELEPHONE APPLICATIONS OR SOLICI23 TATIONS.—In the case of a telephone applica24 tion or solicitation for an educational ISA, the 


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•S 4551 IS

1 ISA provider shall provide the disclosure by, at 

2 its option— 

3 (i) disclosing orally the information 

4 described in subsection (b)(1); or 

5 (ii) mailing a copy of the disclosure 

6 described in subsection (b)(1) not later 

7 than 3 business days after the potential 

8 ISA recipient has applied for the edu9 cational ISA. 

10 (C) SPECIAL RULE.—For an income share 

11 agreement that the ISA recipient may use for 

12 multiple purposes including postsecondary edu13 cational expenses, the ISA provider need not 

14 provide the disclosures required under sub15 section (b)(1) in the application or solicitation. 

16 (2) APPROVAL DISCLOSURES.—The ISA pro17 vider shall provide the disclosures required by sub18 section (b)(2) before consummation on, or with any 

19 notice of approval provided to the applicant for, an 

20 educational ISA. If the ISA provider mails notice of 

21 approval, the disclosures shall be mailed with the no22 tice. If the ISA provider communicates notice of ap23 proval by telephone, the ISA provider shall mail the 

24 disclosures not later than 3 business days after pro25 viding the notice of approval. If the ISA provider 


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•S 4551 IS

1 communicates notice of approval electronically, the 

2 ISA provider shall provide the disclosure, at its op3 tion, either in electronic form in accordance with the 

4 requirements of this title or by mailing the disclo5 sure not later than 3 business days after commu6 nicating the notice of approval. If the ISA provider 

7 communicates approval in person, the ISA provider 

8 shall provide the disclosures to the applicant for an 

9 income share agreement at that time. 

10 (3) FINAL DISCLOSURES.—The disclosures re11 quired by subsection (b)(3) shall be provided after 

12 the ISA recipient accepts the income share agree13 ment. 

14 (4) RECEIPT OF MAILED DISCLOSURES.—If a 

15 disclosure under paragraph (1), (2), or (3) is mailed 

16 to the potential ISA recipient or ISA recipient, as 

17 the case may be, the potential ISA recipient or ISA 

18 recipient shall be deemed to have received the disclo19 sure 5 business days after the disclosure is mailed. 

20 (5) BASIS OF DISCLOSURES AND USE OF ESTI21 MATES IN EDUCATIONAL ISAS.— 

22 (A) LEGAL OBLIGATION.—Disclosures 

23 shall reflect the terms of the legal obligation be24 tween the parties. 


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•S 4551 IS

1 (B) ESTIMATES.—If any information nec2 essary for an accurate disclosure is unknown to 

3 the ISA provider, the ISA provider shall make 

4 the disclosure based on the best information 

5 reasonably available at the time the disclosure 

6 is provided, and shall state clearly that the dis7 closure is an estimate. 

8 (6) EFFECT OF SUBSEQUENT EVENTS.— 

9 (A) APPROVAL DISCLOSURES.—If a disclo10 sure made under paragraph (2) becomes inac11 curate because of an event that occurs after the 

12 ISA provider delivers the required disclosures, 

13 the inaccuracy is not a violation of this Act, al14 though new disclosures may be required in ac15 cordance with this title. 

16 (B) FINAL DISCLOSURES.—If a disclosure 

17 under paragraph (3) becomes inaccurate be18 cause of an event that occurs after the creditor 

19 delivers the required disclosures, the inaccuracy 

20 is not a violation of this Act. 

21 (b) ADDITIONAL DISCLOSURES FOR EDUCATIONAL

22 ISAS.—In addition to the other disclosure requirements 

23 of this title, an ISA provider of an educational ISA shall 

24 provide the disclosures required under this subsection as 

25 follows: 


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•S 4551 IS

1 (1) APPLICATION AND SOLICITATION DISCLO2 SURE.—On or with a solicitation or an application 

3 for an educational ISA, an ISA provider shall dis4 close the following: 

5 (A) ISA PAYMENT CALCULATION METH6 OD.— 

7 (i) The ISA payment calculation 

8 method that applies to the educational ISA 

9 and actually offered by the ISA provider at 

10 the time of application or solicitation. If 

11 the ISA payment calculation method will 

12 depend, in part, on a later determination 

13 of the ISA recipient’s creditworthiness or 

14 other factors, a statement that the ISA 

15 payment calculation method for which the 

16 ISA recipient may qualify will depend on 

17 the ISA recipient’s creditworthiness and 

18 other factors, if applicable. 

19 (ii) In the case of an ISA payment 

20 calculation method that is based on a 

21 schedule of percentages— 

22 (I) an explanation of how the 

23 schedule of percentages is calculated 

24 using percentages of income based on 

25 the ISA recipient’s income; and 


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•S 4551 IS

1 (II) the timing for recalculation 

2 of the ISA recipient’s payments under 

3 the schedule of percentages. 

4 (iii) In the case of an ISA payment 

5 calculation method that is based on a 

6 schedule of fixed amounts that an ISA re7 cipient is required to pay that is calculated 

8 based on the ISA recipient’s income for a 

9 payment period— 

10 (I) an explanation of how the 

11 schedule of fixed amounts is cal12 culated using fixed amounts based on 

13 the ISA recipient’s income; and 

14 (II) the timing for recalculation 

15 of the ISA recipient’s payments under 

16 the schedule of fixed amounts. 

17 (B) FEES AND DEFAULT OR LATE PAY18 MENT COSTS.— 

19 (i) An itemization of the fees or range 

20 of fees required to obtain the educational 

21 ISA. 

22 (ii) Any fees or other penalties based 

23 on the ISA recipient’s default or late pay24 ment. 

25 (C) PAYMENT TERMS.— 


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•S 4551 IS

1 (i) The ISA duration, or range of ISA 

2 durations, offered by the ISA provider. 

3 (ii) A description of any payment de4 ferral options. 

5 (D) COST ESTIMATES.—Using the highest 

6 dollar amount or percentage applicable under 

7 the ISA payment calculation method described 

8 in subparagraph (A)(i) and using an amount fi9 nanced of $10,000, or $5,000 if the ISA pro10 vider only offers income share agreements of 

11 this type for less than $5,000, the loan com12 parison based on these assumptions. 

13 (E) ELIGIBILITY.—Any age or school en14 rollment eligibility requirements relating to the 

15 ISA recipient. 

16 (F) ALTERNATIVE TO INCOME SHARE

17 AGREEMENTS.— 

18 (i) With respect to an educational ISA 

19 that might be used for postsecondary ex20 penses at an institution of higher edu21 cation that participates in a student finan22 cial assistance program under title IV of 

23 the Higher Education Act of 1965 (20 

24 U.S.C. 1070 et seq.)— 


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•S 4551 IS

1 (I) a statement the ISA recipient 

2 may qualify for Federal student finan3 cial assistance through a program 

4 under such title; and 

5 (II) the interest rates for each 

6 program of financial assistance avail7 able under title IV of the Higher Edu8 cation Act of 1965 (20 U.S.C. 1070 

9 et seq.) and information regarding 

10 whether the rates for the loans avail11 able under such title are fixed or vari12 able. 

13 (ii) If applicable to the student’s cir14 cumstances, a statement that the ISA re15 cipient may obtain additional information 

16 concerning Federal student financial as17 sistance from the institution of higher edu18 cation that the student attends, or at the 

19 website of the Department of Education, 

20 including an appropriate website address 

21 for the Department. 

22 (iii) A statement that an institution of 

23 higher education may have school-specific 

24 education loan benefits and terms not de25 tailed on the disclosure form. 


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•S 4551 IS

1 (G) RIGHTS OF THE CONSUMER.—A state2 ment that if the application for the educational 

3 ISA is approved by the ISA provider, the terms 

4 of the educational ISA will be available and will 

5 not change for 30 days except as a result of ad6 justments to the ISA payment calculation meth7 od, ISA duration, or ISA maximum number of 

8 payments and other changes permitted by law. 

9 (H) SELF-CERTIFICATION INFORMA10 TION.—A statement that, before the educational 

11 ISA may be consummated, the ISA recipient 

12 must complete the self-certification form and 

13 that the form may be obtained from the institu14 tion of higher education that the student at15 tends. 

16 (I) OVERALL EDUCATIONAL FINANCE OB17 LIGATION NOTICE.—The following statement: 

18 ‘‘IMPORTANT NOTICE REQUIRED BY 

19 LAW: Students are cautioned to consider care20 fully entering into this Income Share Agree21 ment if their total future payment commitment, 

22 including any other forms of education finance, 

23 may exceed 20 percent of their expected future 

24 income. Your total future obligation may exceed 

25 this percentage if you have received additional 


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•S 4551 IS

1 education financing, including other income 

2 share agreements, Department of Education 

3 Direct or FFEL Loans, or private education 

4 loans.’’. 

5 (2) DISCLOSURES UPON APPROVAL OF AN

6 ISA.—Upon approval of an educational ISA by an 

7 ISA provider, the ISA provider shall disclose the in8 formation required under section 302(d) and the fol9 lowing information: 

10 (A) ISA PAYMENT CALCULATION METH11 OD.— 

12 (i) The ISA payment calculation 

13 method that applies to the educational 

14 ISA. 

15 (ii) In the case of an ISA payment 

16 calculation method that is based on a 

17 schedule of percentages— 

18 (I) an explanation of how the 

19 schedule of percentages is calculated 

20 using percentages of income based on 

21 the ISA recipient’s income; and 

22 (II) the timing for recalculation 

23 of the ISA recipient’s payments under 

24 the schedule of percentages. 


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•S 4551 IS

1 (iii) In the case of an ISA payment 

2 calculation method that is based on a 

3 schedule of fixed amounts that an ISA re4 cipient is required to pay based on the ISA 

5 recipient’s income for a payment period— 

6 (I) an explanation of how the 

7 schedule of fixed amounts is cal8 culated using fixed amounts based on 

9 the ISA recipient’s income; and 

10 (II) the timing for recalculation 

11 of the ISA recipient’s payments under 

12 the schedule of fixed amounts. 

13 (B) FEES AND DEFAULT OR LATE PAY14 MENT COSTS.— 

15 (i) An itemization of the fees or range 

16 of fees required to obtain the educational 

17 ISA. 

18 (ii) Any fees or other penalties based 

19 on the ISA recipient’s defaults or late pay20 ments. 

21 (C) PAYMENT TERMS.— 

22 (i) The ISA duration, or range of ISA 

23 durations, offered by the ISA provider. 

24 (ii) A description of any payment de25 ferral options. 


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•S 4551 IS

1 (D) COST ESTIMATES.—The following dis2 closure shall be made using the ISA payment 

3 calculation method, ISA duration, and ISA 

4 maximum number of payments for which the 

5 ISA recipient has been approved: 

6 (i) The loan comparison based on 

7 these assumptions. 

8 (ii) A description of the payment de9 ferral option chosen by the ISA recipient, 

10 if applicable, and any other payment defer11 ral options that the ISA recipient may 

12 elect at a later time. 

13 (iii) Any payments required while the 

14 ISA recipient is enrolled at a covered edu15 cational institution, based on the deferral 

16 option chosen by the ISA recipient. 

17 (E) ALTERNATIVES TO PRIVATE EDU18 CATION INCOME SHARE AGREEMENTS, IF APPLI19 CABLE TO THE STUDENT.—In the case of an 

20 educational ISA that may be used for education 

21 expenses at an institution of higher education 

22 that participates in the student financial assist23 ance programs under title IV of the Higher 

24 Education Act of 1965 (20 U.S.C. 1070 et 

25 seq.), the following: 


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•S 4551 IS

1 (i) A statement that the ISA recipient 

2 may qualify for Federal student financial 

3 assistance through a program under title 

4 IV of the Higher Education Act of 1965 

5 (20 U.S.C. 1070 et seq.). 

6 (ii) The interest rates for each pro7 gram of financial assistance available 

8 under title IV of the Higher Education Act 

9 of 1965 (20 U.S.C. 1070 et seq.) and in10 formation regarding whether the rates for 

11 the loans available under such title are 

12 fixed or variable. 

13 (iii) A statement that the ISA recipi14 ent may obtain additional information con15 cerning Federal student financial assist16 ance from the institution of higher edu17 cation that the student attends, or at the 

18 website of the Department of Education, 

19 including an appropriate website address 

20 for the Department. 

21 (F) RIGHTS OF THE ISA RECIPIENT.— 

22 (i) A statement that the ISA recipient 

23 may accept the terms of the income share 

24 agreement until the last day of the accept25 ance period described in subsection (d)(1). 


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•S 4551 IS

1 (ii) The specific date on which the ac2 ceptance period expires, based on the date 

3 upon which the ISA recipient receives the 

4 disclosures required under this paragraph 

5 for the income share agreement. 

6 (iii) A specification of the method or 

7 methods by which the ISA recipient may 

8 communicate acceptance. 

9 (iv) A statement that, except for 

10 changes to the ISA payment calculation 

11 method and other changes permitted by 

12 law, the rates and terms of the income 

13 share agreement may not be changed by 

14 the ISA provider during the period de15 scribed in clause (i). 

16 (G) OVERALL EDUCATIONAL FINANCE OB17 LIGATION NOTICE.—The following statement: 

18 ‘‘IMPORTANT NOTICE REQUIRED BY 

19 LAW: Students are cautioned to consider care20 fully entering into this Income Share Agree21 ment if their total future payment commitment, 

22 including any other forms of education finance, 

23 may exceed 20 percent of their expected future 

24 income. Your total future obligation may exceed 

25 this percentage if you have received additional 


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•S 4551 IS

1 education financing, including other income 

2 share agreements, Department of Education 

3 Direct or FFEL Loans, or private education 

4 loans.’’. 

5 (3) FINAL DISCLOSURES.—After the ISA recipi6 ent has accepted the income share agreement in ac7 cordance with subsection (d)(1), the ISA provider 

8 shall disclose to the ISA recipient the information 

9 required by this section and the following informa10 tion: 

11 (A) ISA PAYMENT CALCULATION METH12 OD.— 

13 (i) The ISA payment calculation 

14 method applicable to the income share 

15 agreement. 

16 (ii) In the case of an ISA payment 

17 calculation method that is based on a 

18 schedule of percentages— 

19 (I) an explanation of how the 

20 schedule of percentages is calculated 

21 using percentages of income based on 

22 the ISA recipient’s income; and 

23 (II) the timing for recalculation 

24 of the ISA recipient’s payments under 

25 the schedule of percentages. 


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•S 4551 IS

1 (iii) In the case of an ISA payment 

2 calculation method that is based on a 

3 schedule of fixed amounts that an ISA re4 cipient is required to pay based on the ISA 

5 recipient’s income for a payment period— 

6 (I) an explanation of how the 

7 schedule of fixed amounts is cal8 culated using fixed amounts based on 

9 the ISA recipient’s income; and 

10 (II) the timing for recalculation 

11 of the ISA recipient’s payments under 

12 the schedule of fixed amounts. 

13 (B) FEES AND DEFAULT OR LATE PAY14 MENT COSTS.— 

15 (i) An itemization of the fees or range 

16 of fees required to obtain the educational 

17 ISA. 

18 (ii) Any fees or other penalties based 

19 on the ISA recipient’s defaults or late pay20 ments. 

21 (C) PAYMENT TERMS.— 

22 (i) The ISA duration or range of ISA 

23 durations offered by the ISA provider. 

24 (ii) A description of any payment de25 ferral options. 


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•S 4551 IS

1 (D) COST ESTIMATES.—The following dis2 closure shall be made using the ISA payment 

3 calculation method, ISA duration, and ISA 

4 maximum number of payments for which the 

5 ISA recipient has been approved: 

6 (i) The loan comparison based on 

7 these assumptions. 

8 (ii) A description of the payment de9 ferral option chosen by the ISA recipient, 

10 if applicable, and any other payment defer11 ral options that the ISA recipient may 

12 elect at a later time. 

13 (iii) Any payments required while the 

14 ISA recipient is enrolled at a covered edu15 cational institution, based on the deferral 

16 option chosen by the ISA recipient. 

17 (E) CANCELLATION RIGHTS.— 

18 (i) A statement that— 

19 (I) the ISA recipient has the 

20 right to cancel the income share 

21 agreement, without penalty, at any 

22 time before the cancellation period 

23 under subsection (e) expires; and 


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•S 4551 IS

1 (II) the income share agreement 

2 proceeds will not be disbursed until 

3 after such cancellation period expires. 

4 (ii) The specific date on which the 

5 cancellation period expires and a statement 

6 that the ISA recipient may cancel by that 

7 date. 

8 (iii) A statement specifying— 

9 (I) all methods by which the ISA 

10 recipient may cancel; and 

11 (II) if the ISA provider permits 

12 cancellation by mail, that the ISA re13 cipient’s mailed request will be 

14 deemed timely if placed in the mail 

15 not later than the cancellation date 

16 specified in clause (ii). 

17 (F) CONSPICUOUS DISCLOSURES.—The 

18 disclosures required by subparagraph (E) shall 

19 be made more conspicuous than any other dis20 closure required under this section, except for 

21 the ISA payment calculation method, ISA dura22 tion, ISA maximum number of payments, 

23 amount financed, income threshold, and the 

24 ISA provider’s identity, which shall be disclosed 


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•S 4551 IS

1 in accordance with the requirements of sub2 section (d). 

3 (G) OVERALL EDUCATIONAL FINANCE OB4 LIGATION NOTICE.—The following statement: 

5 ‘‘IMPORTANT NOTICE REQUIRED BY 

6 LAW: Students are cautioned to consider care7 fully entering into this Income Share Agree8 ment if their total future payment commitment, 

9 including any other forms of education finance, 

10 may exceed 20 percent of their expected future 

11 income. Your total future obligation may exceed 

12 this percentage if you have received additional 

13 education financing, including other income 

14 share agreements, Department of Education 

15 Direct or FFEL Loans, or private education 

16 loans.’’. 

17 (c) LIMITATION ON EDUCATIONAL ISAS.— 

18 (1) CO-BRANDING PROHIBITED.— 

19 (A) IN GENERAL.—Except as provided in 

20 subparagraph (B) and paragraph (2), an ISA 

21 provider, other than the covered educational in22 stitution itself, shall not use the name, emblem, 

23 mascot, or logo of a covered educational institu24 tion, or other words, pictures, or symbols identi25 fied with a covered educational institution, in 


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•S 4551 IS

1 the marketing of educational ISAs in a way 

2 that implies that the covered education institu3 tion endorses the ISA provider’s income share 

4 agreements. 

5 (B) SPECIAL RULE.—An ISA provider’s 

6 marketing of an educational ISA does not imply 

7 that the covered education institution endorses 

8 the ISA provider’s income share agreements if 

9 the marketing includes a clear and conspicuous 

10 disclosure, equally prominent and closely proxi11 mate to the reference to the covered educational 

12 institution, that the covered educational institu13 tion does not endorse the ISA provider’s income 

14 share agreements and that the ISA provider is 

15 not affiliated with the covered educational insti16 tution. 

17 (2) ENDORSED ISA PROVIDER ARRANGE18 MENTS.—If an ISA provider and a covered edu19 cational institution have entered into an arrange20 ment under which the covered educational institution 

21 agrees to endorse the ISA provider’s educational 

22 ISAs, and such arrangement is not prohibited by 

23 other applicable law or regulation, paragraph (1)(A) 

24 shall not apply as long as the educational ISA mar25 keting includes a clear and conspicuous disclosure, 


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•S 4551 IS

1 equally prominent and closely proximate to the ref2 erence to the covered educational institution, that 

3 the ISA provider’s income share agreements are not 

4 offered or made by the covered educational institu5 tion, but are made by the ISA provider. 

6 (d) EDUCATIONAL ISA RECIPIENT’S RIGHT TO AC7 CEPT.— 

8 (1) ACCEPTANCE PERIOD.—The ISA recipient 

9 has the right to accept the terms of an educational 

10 ISA at any time not later than 30 calendar days fol11 lowing the date on which the ISA recipient receives 

12 the disclosures required under subsection (b)(2). 

13 (2) LIMITATIONS ON CHANGES.—Except for 

14 changes permitted under paragraph (3), the terms of 

15 the educational ISA that are required to be disclosed 

16 under paragraphs (2) and (3) of subsection (b) may 

17 not be changed by the ISA provider prior to the ear18 lier of— 

19 (A) the date of disbursement of the income 

20 share agreement; or 

21 (B) the expiration of the 30-day period de22 scribed in paragraph (1), if the ISA recipient 

23 has not accepted the income share agreement 

24 before within the period. 


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•S 4551 IS

1 (3) EXCEPTIONS NOT REQUIRING RE-DISCLO2 SURE.— 

3 (A) IN GENERAL.—Notwithstanding para4 graph (2), nothing in this section shall prevent 

5 an ISA provider of an educational ISA from— 

6 (i) withdrawing an offer before con7 summation of the transaction if the mak8 ing of the income share agreement would 

9 be prohibited by law or if the ISA provider 

10 has reason to believe that the ISA recipi11 ent has committed fraud in connection 

12 with the income share agreement applica13 tion; 

14 (ii) changing the ISA payment cal15 culation method and terms if the change 

16 will unequivocally benefit the ISA recipi17 ent; or 

18 (iii) reducing the amount funded 

19 based upon a certification or other infor20 mation received from the covered edu21 cational institution, or from the ISA recipi22 ent, indicating that the student’s cost of 

23 attendance has decreased or the ISA re24 cipient’s other financial aid has increased, 

25 except that, in such case, the ISA provider 


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•S 4551 IS

1 may make corresponding changes to the 

2 terms of the ISA payment calculation 

3 method, ISA duration, and other terms 

4 only to the extent that the ISA recipient 

5 would have received the terms if the ISA 

6 recipient had applied for the reduced 

7 amount financed. 

8 (B) NO NEW DISCLOSURES REQUIRED.—If 

9 the ISA provider changes the ISA payment cal10 culation method or terms of the income share 

11 agreement under this paragraph, the ISA pro12 vider shall not be required to— 

13 (i) provide the disclosures required 

14 under subsection (b)(2) for the new income 

15 share agreement terms; or 

16 (ii) provide an additional 30-day pe17 riod to the ISA recipient to accept the new 

18 terms of the income share agreement. 

19 (4) EXCEPTIONS REQUIRING RE-DISCLOSURE.— 

20 (A) IN GENERAL.—Notwithstanding para21 graphs (2) and (3), nothing in this section pre22 vents an ISA provider, at its option, from 

23 changing the ISA payment calculation method 

24 or terms of the income share agreement to ac25 commodate a specific request by the ISA recipiVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 ent, such as a request for a different repayment 

2 option. 

3 (B) ADDITIONAL DISCLOSURES RE4 QUIRED.—If the ISA provider changes the rate 

5 or terms of the income share agreement under 

6 subparagraph (A), the ISA provider— 

7 (i) shall provide the disclosures re8 quired under subsection (b)(2) and shall 

9 provide the ISA recipient the 30-day pe10 riod to accept the income share agreement, 

11 as required under paragraph (1); and 

12 (ii) shall not make further changes to 

13 the income share agreement and terms of 

14 the loan, except as specified in paragraph 

15 (3)(B). 

16 (C) NO FURTHER WITHDRAWALS OR

17 CHANGES.—Except as permitted under para18 graph (3)(B), unless the ISA recipient accepts 

19 the income share agreement offered by the ISA 

20 provider in response to the ISA recipient’s re21 quest in accordance with subparagraph (A), the 

22 ISA provider may not withdraw or change the 

23 ISA payment calculation method or any terms 

24 of the income share agreements for which the 

25 ISA recipient was approved prior to the ISA reVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 cipient’s request for a change in income share 

2 agreement terms under this paragraph. 

3 (e) EDUCATIONAL ISA RECIPIENT’S RIGHT TO CAN4 CEL.—The ISA recipient may cancel an educational ISA, 

5 without penalty, until midnight of the third business day 

6 following the date on which the ISA recipient receives the 

7 disclosures required by subsection (b)(3). No funds may 

8 be disbursed for an educational ISA until the 3-business9 day period has expired, absent exceptional circumstances 

10 necessitating disbursement based on a request from the 

11 covered educational institution. In such a case, the covered 

12 educational institution shall promptly, upon cancellation 

13 by the student, refund the amounts to the ISA provider. 

14 (f) SELF-CERTIFICATION FORM.—For an edu15 cational ISA intended to be used for the postsecondary 

16 educational expenses of a student while the student is at17 tending an institution of higher education, the ISA pro18 vider shall obtain, from the ISA recipient or the institution 

19 of higher education, the educational ISA certification form 

20 developed by the Secretary under section 155 of the High21 er Education Act of 1965 (20 U.S.C. 1019d), signed by 

22 the ISA recipient, in written or electronic form, before 

23 consummating the educational ISA. 

24 (g) PROVISION OF INFORMATION BY PREFERRED

25 ISA PROVIDER.— 


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•S 4551 IS

1 (1) IN GENERAL.—An ISA provider that has a 

2 preferred ISA financing arrangement with a covered 

3 educational institution shall, each year in accordance 

4 with paragraph (2), provide to the covered edu5 cational institution the information required under 

6 subsection (b)(1) for each type of educational ISA 

7 that the ISA provider plans to offer to ISA recipi8 ents for students attending the covered educational 

9 institution, for the period beginning July 1 of the 

10 year in which the information is provided and ending 

11 June 30 of the following year. 

12 (2) TIMING.—For each year of a preferred ISA 

13 provider financing arrangement, the ISA provider 

14 shall provide the information required under para15 graph (1) by the later of— 

16 (A) the first day of April; or 

17 (B) the date that is 30 days after entering 

18 into, or learning the ISA provider is a party to, 

19 a preferred ISA provider arrangement. 

20 SEC. 304. ADVERTISING OF INCOME SHARE AGREEMENTS. 

21 (a) IN GENERAL.—The restrictions on advertising of 

22 income share agreements shall be consistent with the re23 strictions placed on advertisements related to extensions 

24 of consumer credit as set forth in chapter 3 of the Truth 

25 in Lending Act (15 U.S.C. 1661 et seq.). 


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•S 4551 IS

1 (b) AMENDMENTS TO THE TRUTH IN LENDING

2 ACT.—The Truth in Lending Act (15 U.S.C. 1601 et seq.) 

3 is amended— 

4 (1) in section 103(f) (15 U.S.C. 1602(f))— 

5 (A) by striking ‘‘means the’’ and inserting 

6 ‘‘means— 

7 ‘‘(1) the’’; 

8 (B) in paragraph (1), as so designated, by 

9 striking the period at the end and inserting ‘‘; 

10 and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(2) for purposes of chapter 3, shall include an 

13 income share agreement, as defined in section 2 of 

14 the ISA Student Protection Act of 2022.’’; 

15 (2) in section 142 (15 U.S.C. 1662)— 

16 (A) in the matter preceding paragraph (1), 

17 by striking ‘‘state’’ and inserting ‘‘state—’’; 

18 (B) in paragraph (1), by striking the pe19 riod at the end and inserting a semicolon; 

20 (C) in paragraph (2), by striking the pe21 riod at the end and inserting ‘‘; and’’; and 

22 (D) by adding at the end the following: 

23 ‘‘(3) with respect to an income share agreement 

24 (as defined in section 2 of the ISA Student Protec25 tion Act of 2022), that a specific ISA payment calVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 culation method, ISA duration, ISA maximum num2 ber of payments, or income threshold (as those 

3 terms are defined in such section 2) can be arranged 

4 unless the ISA provider (as defined in such section 

5 2) usually and customarily arranges income share 

6 agreements pursuant to the terms so advertised.’’; 

7 and 

8 (3) in section 144, by adding at the end the fol9 lowing: 

10 ‘‘(f) INCOME SHARE AGREEMENTS.— 

11 ‘‘(1) DEFINITIONS.—In this subsection, the 

12 terms ‘income share agreement’, ‘income threshold’, 

13 ‘ISA duration’, ‘ISA maximum number of pay14 ments’, and ‘ISA payment calculation method’ have 

15 the meanings given those terms in section 2 of the 

16 ISA Student Protection Act of 2022. 

17 ‘‘(2) APPLICATION.—This subsection shall 

18 apply to any advertisement to aid, promote, or assist 

19 directly or indirectly any income share agreement 

20 subject to the provisions of this chapter. 

21 ‘‘(3) DISCLOSURE OF KEY TERMS.—If any ad22 vertisement to which this section applies states the 

23 ISA payment calculation method, ISA duration, ISA 

24 maximum number of payments, income threshold, or 


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•S 4551 IS

1 amounts of payments under an income share agree2 ment, the advertisement shall include the following: 

3 ‘‘(A) The ISA payment calculation method. 

4 ‘‘(B) The ISA duration. 

5 ‘‘(C) The ISA maximum number of pay6 ments. 

7 ‘‘(D) The income threshold.’’. 

8 TITLE IV—OTHER CLARIFICA9 TIONS TO SUPPORT ISA PRO10 GRAMS 

11 SEC. 401. TREATMENT UNDER SECURITIES LAWS. 

12 (a) INCOME SHARE AGREEMENTS NOT TREATED AS

13 SECURITIES.— 

14 (1) IN GENERAL.—An income share agreement 

15 shall not be treated as a security for purposes of the 

16 securities laws (as defined in section 3(a) of the Se17 curities Exchange Act of 1934 (15 U.S.C. 78c(a))), 

18 any similar State law, or any State law that directly 

19 or indirectly prohibits, limits, or imposes conditions, 

20 based on the merits of an offering or issuer of secu21 rities, upon the offer or sale of any security. 

22 (2) RULE OF CONSTRUCTION.—Nothing in 

23 paragraph (1) may be construed to prevent an in24 strument that is collateralized by, or serviced by the 

25 cash flows of, an income share agreement from being 


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•S 4551 IS

1 treated as a security for purposes of any law de2 scribed in that paragraph. 

3 (b) ISA PROVIDERS MAKING INCOME SHARE AGREE4 MENTS EXCLUDED FROM INVESTMENT COMPANY TREAT5 MENT.—Section 3(c) of the Investment Company Act of 

6 1940 (15 U.S.C. 80a–3(c)) is amended— 

7 (1) in paragraph (4), by inserting ‘‘income 

8 share agreements (as that term is defined in section 

9 2 of the ISA Student Protection Act of 2022),’’ 

10 after ‘‘industrial banking,’’; and 

11 (2) in paragraph (5)— 

12 (A) in subparagraph (A), by inserting ‘‘, 

13 including purchasing or otherwise acquiring in14 come share agreements (as that term is defined 

15 in section 2 of the ISA Student Protection Act 

16 of 2022)’’ after ‘‘services’’; and 

17 (B) in subparagraph (B), by inserting ‘‘, 

18 including making income share agreements (as 

19 defined in subparagraph (A))’’ after ‘‘services’’. 

20 SEC. 402. TREATMENT UNDER BANKRUPTCY LAWS. 

21 Section 523(a)(8) of title 11, United States Code, is 

22 amended, in the matter preceding subparagraph (A), by 

23 striking ‘‘for—’’ and inserting ‘‘for, other than funds pro24 vided as part of an educational ISA (as defined in section 

25 2 of the ISA Student Protection Act of 2022)—’’. 


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•S 4551 IS

1 SEC. 403. CONSENT TO CONTINUING RELEASE OF TAX2 PAYER INFORMATION UNDER EDUCATIONAL 

3 ISAS AND INCOME SHARE AGREEMENTS. 

4 By not later than 180 days after the date of enact5 ment of this Act, the Secretary of the Treasury shall mod6 ify Treasury regulations and guidance to provide for con7 tinuing consent to disclosure of an individual’s return in8 formation to an ISA provider (or the provider’s successor 

9 in interest) under an educational ISA or other income 

10 share agreement, but only for periods relevant to, and only 

11 to the extent the Secretary determines is necessary and 

12 appropriate in carrying out the terms of, such educational 

13 ISA or income share agreement. 

14 SEC. 404. INTERPLAY WITH THE HIGHER EDUCATION ACT 

15 OF 1965. 

16 (a) TITLE IV DEFINITIONS.— 

17 (1) IN GENERAL.—Section 480 of the Higher 

18 Education Act of 1965 (20 U.S.C. 1087vv), as 

19 amended by section 702 of the FAFSA Simplifica20 tion Act (title VII of division FF of Public Law 

21 116–260; 134 Stat. 3191), is amended— 

22 (A) in subsection (e)— 

23 (i) in paragraph (2), by striking 

24 ‘‘and’’ after the semicolon; 

25 (ii) in paragraph (3), by striking the 

26 period and inserting ‘‘; and’’; and 


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•S 4551 IS

1 (iii) by adding at the end the fol2 lowing: 

3 ‘‘(4) any amount provided to the applicant, or 

4 on whose behalf funds are disbursed, under an in5 come share agreement, as defined in section 2 of the 

6 ISA Student Protection Act of 2022.’’; and 

7 (B) in subsection (f)(1), by inserting 

8 ‘‘amounts provided to an individual, or on 

9 whose behalf the funds are disbursed, under an 

10 income share agreement, as defined in section 2 

11 of the ISA Student Protection Act of 2022,’’ 

12 after ‘‘income producing property,’’. 

13 (2) EFFECTIVE DATE.—The amendments made 

14 by paragraph (1) shall take effect as if included in 

15 section 702 of the FAFSA Simplification Act (title 

16 VII of division FF of Public Law 116–260; 134 

17 Stat. 3191) and in accordance with section 701(b) 

18 of such Act. 

19 (b) PROGRAM PARTICIPATION AGREEMENTS.—Sec20 tion 487(d)(1)(D) of the Higher Education Act of 1965 

21 (20 U.S.C. 1094(d)(1)(D)) is amended— 

22 (1) in clause (ii), by striking ‘‘and’’ after the 

23 semicolon; 

24 (2) in clause (iii), by inserting ‘‘and’’ after the 

25 semicolon; and 


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•S 4551 IS

1 (3) by adding at the end the following: 

2 ‘‘(iv) in the case of educational income 

3 share agreements (as such term is defined 

4 in section 2 of the ISA Student Protection 

5 Act of 2022) made by a proprietary insti6 tution of higher education, only the 

7 amount of ISA payments (as defined in 

8 such section) received during the applicable 

9 institutional fiscal year, to the extent the 

10 amount of such payments on the edu11 cational income share agreement does not 

12 exceed the income share amount financed 

13 under such educational income share 

14 agreement;’’. 

15 (c) PREFERRED LENDER ARRANGEMENT DEFINI16 TIONS.—Section 151 of the Higher Education Act of 1965 

17 (20 U.S.C. 1019) is amended— 

18 (1) by redesignating paragraphs (3), (4), (5), 

19 and (6) through (9) as paragraphs (4), (5), (6), and 

20 (9) through (12), respectively; 

21 (2) by inserting after paragraph (2) the fol22 lowing: 

23 ‘‘(3) EDUCATIONAL ISA.—The term ‘edu24 cational ISA’ has the meaning given the term in sec25 tion 2 of the ISA Student Protection Act of 2022.’’; 


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•S 4551 IS

1 (3) in paragraph (6), as redesignated by para2 graph (1)— 

3 (A) in subparagraph (A)(ii), by inserting 

4 ‘‘or educational ISAs’’ after ‘‘loans’’; 

5 (B) in subparagraph (B), by striking 

6 ‘‘and’’ after the semicolon; 

7 (C) in subparagraph (C), by striking the 

8 period at the end and inserting ‘‘; and’’; and 

9 (D) by adding at the end of the following: 

10 ‘‘(D) notwithstanding subparagraphs (A) 

11 and (B), does not include any ISA provider 

12 with respect to any educational ISA secured, 

13 made, or extended by such ISA provider.’’; 

14 (4) by inserting after paragraph (6), as redesig15 nated by subparagraph (A), the following: 

16 ‘‘(7) ISA PROVIDER.—The term ‘ISA provider’ 

17 has the meaning given the term in section 2 of the 

18 ISA Student Protection Act of 2022. 

19 ‘‘(8) ISA RECIPIENT.—The term ‘ISA recipient’ 

20 has the meaning given the term in section 2 of the 

21 ISA Student Protection Act of 2022.’’; and 

22 (5) in paragraph (11)(A), as redesignated by 

23 paragraph (1)— 

24 (A) in the matter preceding clause (i), by 

25 inserting ‘‘or ISA provider’’ after ‘‘lender’’; 


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•S 4551 IS

1 (B) in clause (i), by inserting ‘‘or an ISA 

2 provider provides or otherwise issues edu3 cational ISAs’’ after ‘‘loans’’; and 

4 (C) in clause (ii), by inserting ‘‘or the edu5 cational ISAs of the ISA provider’’ after ‘‘lend6 er’’. 

7 (d) RESPONSIBILITIES OF COVERED INSTITUTIONS

8 AND ISA PROVIDERS REGARDING PREFERRED LENDER

9 ARRANGEMENTS.—Section 152 of the Higher Education 

10 Act of 1965 (20 U.S.C. 1019a) is amended— 

11 (1) in the section heading, by striking ‘‘AND

12 LENDERS’’ and inserting ‘‘LENDERS, AND ISA

13 PROVIDERS’’; 

14 (2) in subsection (a)— 

15 (A) in paragraph (1)— 

16 (i) in subparagraph (A)— 

17 (I) in clause (i)— 

18 (aa) in the matter preceding 

19 subclause (I), by inserting ‘‘or 

20 educational ISAs’’ after ‘‘loans’’; 

21 (bb) in subclause (II)— 

22 (AA) by striking ‘‘sec23 tion 151(3)(A)’’ and insert24 ing ‘‘section 151(4)(A)’’; 

25 and 


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•S 4551 IS

1 (BB) by striking ‘‘and’’ 

2 at the end; 

3 (cc) by redesignating sub4 clause (III) as subclause (IV); 

5 and 

6 (dd) by inserting after sub7 clause (II) the following: 

8 ‘‘(III) the information required to 

9 be disclosed pursuant to section 

10 153(a)(2)(A)(i), for an educational 

11 ISA that is offered pursuant to a pre12 ferred lender arrangement of the in13 stitution or organization to students 

14 of the institution or families of such 

15 students; and’’; and 

16 (II) in clause (ii)— 

17 (aa) in the matter preceding 

18 subclause (I)— 

19 (AA) by striking ‘‘sub20 paragraph (C)’’ and insert21 ing ‘‘subparagraph (D)’’; 

22 and 

23 (BB) by inserting ‘‘or 

24 educational ISAs’’ after 

25 ‘‘loans’’; 


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•S 4551 IS

1 (bb) in subclause (I), by 

2 striking ‘‘and’’ after the semi3 colon; and 

4 (cc) by adding at the end 

5 the following: 

6 ‘‘(III) in the case of a covered in7 stitution, the information described in 

8 section 153(c) for each type of edu9 cational ISA offered pursuant to a 

10 preferred lender arrangement of the 

11 institution to students of the institu12 tion or the families of such students; 

13 and 

14 ‘‘(IV) in the case of an institu15 tion-affiliated organization of a cov16 ered institution, the information in 

17 section 303(b)(1) of the ISA Student 

18 Protection Act of 2022, for each type 

19 of educational ISA offered pursuant 

20 to a preferred lender arrangement of 

21 the organization to students of such 

22 institution or the families of such stu23 dents.’’; 

24 (ii) by redesignating subparagraph 

25 (C) as subparagraph (D); and 


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•S 4551 IS

1 (iii) by inserting after subparagraph 

2 (B) the following: 

3 ‘‘(C) EDUCATIONAL ISA DISCLOSURES.—A 

4 covered institution, or an institution-affiliated 

5 organization of such covered institution, that 

6 provides information regarding an educational 

7 ISA from an ISA provider to a prospective ISA 

8 recipient shall— 

9 ‘‘(i) provide the prospective ISA re10 cipient with the information described in 

11 section 303(b)(1) of the ISA Student Pro12 tection Act of 2022 for such educational 

13 ISA; 

14 ‘‘(ii) inform the perspective ISA re15 cipient that— 

16 ‘‘(I) the prospective ISA recipient 

17 may qualify for loans or other assist18 ance under title IV; and 

19 ‘‘(II) the terms and conditions of 

20 the loans made, insured, or guaran21 teed under title IV may be more fa22 vorable than the provisions of edu23 cational ISAs; and 

24 ‘‘(iii) ensure that information regard25 ing educational ISAs is presented in such 


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•S 4551 IS

1 a manner as to be distinct from informa2 tion regarding loans that are made, in3 sured, or guaranteed under title IV.’’; 

4 (B) by striking paragraph (2) and insert5 ing the following: 

6 ‘‘(2) USE OF INSTITUTION NAME.—A covered 

7 institution, or an institution-affiliated organization 

8 of such covered institution, that enters into a pre9 ferred lender arrangement with a lender regarding 

10 private education loans or an ISA provider regarding 

11 educational ISAs shall not agree to the lender’s or 

12 ISA provider’s use of the name, emblem, mascot, or 

13 logo of such institution or organization, or other 

14 words, pictures, or symbols readily identified with 

15 such institution or organization, in the marketing of 

16 private education loans or educational ISAs to stu17 dents attending such institution in any way that im18 plies that the loan or educational ISA is offered or 

19 made by such institution or organization instead of 

20 the lender or ISA provider.’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(4) USE OF ISA PROVIDER NAME.—A covered 

23 institution, or an institution-affiliated organization 

24 of such covered institution, that enters into a pre25 ferred lender arrangement with an ISA provider reVerDate Sep 11 2014 21:41 Jul 20, 2022 Jkt 029200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S4551.IS S4551

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•S 4551 IS

1 garding educational ISAs shall ensure that the name 

2 of the ISA provider is displayed in all information 

3 and documentation related to such educational 

4 ISAs.’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(c) ISA PROVIDER RESPONSIBILITIES.—For each 

7 of an ISA provider’s educational ISAs, the ISA provider 

8 shall comply with the disclosure requirements of sections 

9 302 and 303 of the ISA Student Protection Act of 2022.’’. 

10 (e) DISCLOSURES FOR ISA PROVIDERS PARTICI11 PATING IN PREFERRED LENDER ARRANGEMENTS.—Sec12 tion 153 of the Higher Education Act of 1965 (20 U.S.C. 

13 1019b) is amended— 

14 (1) in subsection (a)— 

15 (A) in paragraph (1)— 

16 (i) in subparagraph (A), by striking 

17 ‘‘section 151(3)(A)’’ and inserting ‘‘section 

18 151(4)(A)’’; and 

19 (ii) by adding at the end the fol20 lowing: 

21 ‘‘(C) ADDITIONAL INFORMATION FOR EDU22 CATIONAL ISAS.— 

23 ‘‘(i) IN GENERAL.—By not later than 

24 180 days after the date of enactment of 

25 the ISA Student Protection Act of 2022, 


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•S 4551 IS

1 the Secretary, in coordination with the Bu2 reau of Consumer Financial Protection, 

3 shall determine the minimum information 

4 that ISA providers, covered institutions, 

5 and institution-affiliated organizations of 

6 such covered institutions participating in 

7 preferred lender arrangements shall make 

8 available regarding educational ISAs. 

9 ‘‘(ii) CONSULTATION AND CONTENT

10 OF MINIMUM DISCLOSURES.—In carrying 

11 out clause (i), the Secretary shall— 

12 ‘‘(I) consult with students, the 

13 families of such students, representa14 tives of covered institutions (including 

15 financial aid administrators, admis16 sion officers, and business officers), 

17 representatives of institution-affiliated 

18 organizations, secondary school guid19 ance counselors, and ISA providers; 

20 ‘‘(II) include, in the minimum in21 formation under clause (i) that is re22 quired to be made available, the infor23 mation required to be disclosed under 

24 section 303 of the ISA Student Pro25 tection Act of 2022; and 


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•S 4551 IS

1 ‘‘(III) consider the merits of re2 quiring each covered institution, and 

3 each institution-affiliated organization 

4 of such covered institution, with a 

5 preferred lender arrangement to pro6 vide prospective ISA recipients and 

7 the families of such ISA recipients the 

8 following information for each type of 

9 educational ISA offered pursuant to 

10 such preferred lender arrangement: 

11 ‘‘(aa)(AA) The ISA payment 

12 calculation method, the income 

13 threshold, the ISA maximum 

14 number of payments (or a range 

15 of the ISA maximum number of 

16 payments), the ISA payment win17 dow (or a range of the ISA pay18 ment windows), and the terms 

19 and conditions of the educational 

20 ISA for the next award year. 

21 ‘‘(BB) In this subclause, the 

22 terms ‘income threshold’, ‘ISA 

23 maximum number of payments’, 

24 ‘ISA payment window’, and ‘ISA 

25 payment calculation method’ 


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•S 4551 IS

1 have the meanings given the 

2 terms in section 2 of the ISA 

3 Student Protection Act of 2022. 

4 ‘‘(bb) An itemization of the 

5 fees or range of fees required to 

6 obtain the educational ISA. 

7 ‘‘(cc) Any fees or other pen8 alties based on the ISA recipi9 ent’s defaults or late payments. 

10 ‘‘(dd) The annual or aggre11 gate maximum financed amounts. 

12 ‘‘(ee) The average financed 

13 amounts provided by the ISA 

14 provider to students who— 

15 ‘‘(AA) graduated from 

16 such institution in the pre17 ceding year with certificates, 

18 undergraduate degrees, 

19 graduate degrees, and pro20 fessional degrees, as applica21 ble; and 

22 ‘‘(BB) obtained edu23 cational ISAs of such type 

24 from the ISA provider for 

25 the preceding year. 


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•S 4551 IS

1 ‘‘(ff) The consequences for 

2 the ISA recipient for defaulting 

3 on an educational ISA. 

4 ‘‘(gg) Contact information 

5 for the ISA provider. 

6 ‘‘(hh) Other information 

7 suggested by the persons and en8 tities with whom the Secretary 

9 has consulted under subclause 

10 (I).’’; 

11 (B) in paragraph (2)— 

12 (i) in subparagraph (A)— 

13 (I) in clause (i), by striking ‘‘sec14 tion 151(3)(A)’’ and inserting ‘‘sec15 tion 151(4)(A), or to prospective ISA 

16 recipients and the families of such 

17 ISA recipients regarding educational 

18 ISAs,’’; and 

19 (II) in clause (ii), by striking 

20 ‘‘the model disclosure form’’ and in21 serting ‘‘a model disclosure form’’; 

22 (ii) in subparagraph (B)— 

23 (I) in the matter preceding clause 

24 (i)— 


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1 (aa) by striking ‘‘a model 

2 disclosure form’’ and inserting 

3 ‘‘model disclosure forms’’; and 

4 (bb) by striking ‘‘and pre5 ferred lenders’’ and inserting 

6 ‘‘preferred lenders, and ISA pro7 viders’’; 

8 (II) in clause (i), by inserting 

9 ‘‘ISA providers,’’ after ‘‘servicers,’’; 

10 and 

11 (III) in clause (ii)— 

12 (aa) by striking ‘‘format to 

13 the form’’ and inserting the fol14 lowing: ‘‘format to— 

15 ‘‘(aa) with respect to edu16 cation loans, the form’’; 

17 (bb) by striking ‘‘section 

18 151(3)(A)’’ and inserting ‘‘sec19 tion 151(4)(A)’’; and 

20 (cc) by adding at the end 

21 the following: 

22 ‘‘(bb) with respect to edu23 cational ISAs, the form developed 

24 by the Bureau of Consumer Fi25 nancial Protection under section 


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•S 4551 IS

1 301(4) of the ISA Student Pro2 tection Act of 2022 in order to 

3 permit students and the families 

4 of students to easily compare 

5 educational ISAs; and’’; and 

6 (iii) in subparagraph (C), by striking 

7 ‘‘such model disclosure form’’ and insert8 ing ‘‘the model disclosure forms described 

9 in subparagraph (B)’’; 

10 (2) in subsection (b), by striking ‘‘section 

11 151(3)(A)’’ each place the term appears and insert12 ing ‘‘section 151(4)(A)’’; 

13 (3) by redesignating subsection (c) as sub14 section (d); 

15 (4) by inserting after subsection (b) the fol16 lowing: 

17 ‘‘(c) DUTIES OF ISA PROVIDERS.—Each ISA pro18 vider that has a preferred lender arrangement with respect 

19 to educational ISAs with a covered institution, or an insti20 tution-affiliated organization of such covered institution, 

21 shall annually, by a date determined by the Secretary, pro22 vide to such covered institution or such institution-affili23 ated organization, and to the Secretary, the information 

24 the Secretary requires pursuant to subsection (a)(2)(A)(i) 

25 for the educational ISAs that the ISA provider plans to 


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•S 4551 IS

1 offer pursuant to such preferred lender arrangement to 

2 students attending such covered institution, or to the fam3 ilies of such students, for the next award year.’’; and 

4 (5) in subsection (d), as redesignated by para5 graph (3)— 

6 (A) in paragraph (1)— 

7 (i) in subparagraph (A)— 

8 (I) in clause (i), by striking ‘‘sec9 tion 151(3)(A)’’ and inserting ‘‘sec10 tion 151(4)(A) or educational ISA’’; 

11 and 

12 (II) by adding at the end the fol13 lowing: 

14 ‘‘(iii)(I) in the case of a covered insti15 tution, the information described in sub16 section (c), for each type of educational 

17 ISA offered pursuant to a preferred lender 

18 arrangement of the institution to students 

19 of the institution or the families of such 

20 students; and 

21 ‘‘(II) in the case of an institution-af22 filiated organization of a covered institu23 tion, the information described in section 

24 303(b)(1) of the ISA Student Protection 

25 Act of 2022, for each type of educational 


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1 ISA offered pursuant to a preferred lender 

2 arrangement of the organization to stu3 dents of such institution or the families of 

4 such students.’’; and 

5 (ii) in subparagraph (B)— 

6 (I) by inserting ‘‘or ISA pro7 vider’’ after ‘‘lender’’; and 

8 (II) by inserting ‘‘or an edu9 cational ISA’’ after ‘‘loan’’; and 

10 (B) in paragraph (2)(A)— 

11 (i) in the matter preceding clause (i), 

12 by inserting ‘‘or ISA provider’’ after ‘‘each 

13 lender’’; 

14 (ii) in clause (i), by striking ‘‘clauses 

15 (i) and (ii)’’ and inserting ‘‘clauses (i) 

16 through (iii), as applicable’’; and 

17 (iii) in clause (ii)— 

18 (I) by inserting ‘‘or ISA pro19 vider’’ after ‘‘the lender’’; and 

20 (II) by inserting ‘‘or educational 

21 ISA’’ after ‘‘loan’’. 

22 (f) SELF-CERTIFICATION FORM FOR EDUCATIONAL

23 ISAS.—Section 155 of the Higher Education Act of 1965 

24 (20 U.S.C. 1019d) is amended— 


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•S 4551 IS

1 (1) by striking the section heading and insert2 ing the following: ‘‘SELF-CERTIFICATION FORMS

3 FOR PRIVATE EDUCATION LOANS OR EDU4 CATIONAL ISAS.’’; 

5 (2) in subsection (a)— 

6 (A) in the matter preceding paragraph 

7 (1)— 

8 (i) by striking ‘‘the self-certification 

9 form’’ and inserting ‘‘a self-certification 

10 form’’; 

11 (ii) by inserting ‘‘and, in consultation 

12 with the Director of the Bureau of Con13 sumer Financial Protection, a self-certifi14 cation form for educational ISAs that shall 

15 be used to satisfy the requirements of sec16 tion 303(f) of the ISA Student Protection 

17 Act of 2022’’ after ‘‘Act’’; and 

18 (iii) by striking ‘‘Such form’’ and in19 serting ‘‘Each form’’; and 

20 (B) in paragraph (3)— 

21 (i) in subparagraph (A), by inserting 

22 ‘‘or educational ISA, as applicable’’ after 

23 ‘‘loan’’; and 


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•S 4551 IS

1 (ii) in subparagraph (C), by inserting 

2 ‘‘or educational ISA, as applicable’’ after 

3 ‘‘loan’’; and 

4 (3) in subsection (b), by striking ‘‘the form’’ 

5 and inserting ‘‘a form’’. 

6 (g) CONFORMING AMENDMENTS.—Section 154 of the 

7 Higher Education Act of 1965 (20 U.S.C. 1019c) is 

8 amended— 

9 (1) in subsection (a)— 

10 (A) by inserting ‘‘for education loans’’ 

11 after ‘‘the model disclosure form’’; and 

12 (B) by striking ‘‘section 151(3)(A)’’ and 

13 inserting ‘‘section 151(4)(A)’’; and 

14 (2) in subsection (b)(2), by inserting ‘‘for edu15 cation loans’’ after ‘‘model disclosure form’’. 

16 TITLE V—APPLYING EXISTING 

17 CONSUMER PROTECTIONS TO 

18 INCOME SHARE AGREEMENTS 

19 SEC. 501. EQUAL ACCESS TO INCOME SHARE AGREEMENTS. 

20 (a) ACTIVITIES CONSTITUTING DISCRIMINATION.—It 

21 shall be unlawful for any ISA provider to discriminate 

22 against any applicant, with respect to any aspect of an 

23 income share agreement— 


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•S 4551 IS

1 (1) on the basis of race, color, religion, national 

2 origin, sex or marital status, or age (provided the 

3 applicant has the capacity to contract); 

4 (2) because all or part of the applicant’s income 

5 derives from any public assistance program (except 

6 for those excluded from the definition of income es7 tablished by the income share agreement); or 

8 (3) because the applicant has in good faith ex9 ercised any right under this Act. 

10 (b) ACTIVITIES NOT CONSTITUTING DISCRIMINA11 TION.—It shall not constitute discrimination for purpose 

12 of subsection (a) for an ISA provider— 

13 (1) to make an inquiry of the applicant’s age or 

14 of whether the applicant’s income derives from any 

15 public assistance program, if such inquiry is for the 

16 purpose of determining the amount and probable 

17 continuance of income levels, credit history, or other 

18 pertinent element of creditworthiness as provided in 

19 regulations of the Bureau; 

20 (2) to use any empirically derived credit system 

21 that considers age if that system is demonstrably 

22 and statistically sound in accordance with regula23 tions of the Bureau, except that in the operation of 

24 such a system, the age of an elderly applicant may 

25 not be assigned a negative factor or value; 


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•S 4551 IS

1 (3) to make an inquiry of, or to consider the 

2 age of, an elderly applicant when the age of that ap3 plicant is to be used by the creditor in the extension 

4 of credit in favor of the applicant; or 

5 (4) to use any empirically derived system that 

6 considers the expected future income of an applicant 

7 to determine whether to approve an application or to 

8 establish the financial and other terms of an income 

9 share agreement, if that empirically derived system 

10 is demonstrably and statistically sound and reason11 ably designed such that approved applicants are all 

12 reasonably expected to pay substantially similar ef13 fective annual percentage rates as other similarly sit14 uated applicants, except that in accordance with any 

15 regulations of the Bureau in the operation of such 

16 a system to project an applicant’s expected future 

17 Income, an ISA provider— 

18 (A) may not consider an applicant’s status 

19 as a member or potential member of any of the 

20 classes described in subsection (a); 

21 (B) may consider an applicant’s current 

22 employment status, current debt and other fi23 nancial obligations, or current and past income 

24 (as of the date of application); or 


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•S 4551 IS

1 (C) in the case of educational ISAs, may 

2 consider the historical income of consumers who 

3 have made comparable progress toward the 

4 completion of the educational program in which 

5 the applicant is or is expected to be enrolled or 

6 toward a reasonably comparable educational 

7 program. 

8 (c) ADDITIONAL ACTIVITIES NOT CONSTITUTING

9 DISCRIMINATION.—It shall not be a violation of subsection 

10 (a) for an ISA provider to refuse to extend an income 

11 share agreement— 

12 (1) that is offered pursuant to— 

13 (A) any financial assistance program ex14 pressly authorized by law for an economically 

15 disadvantaged class of persons; 

16 (B) any financial assistance program ad17 ministered by a nonprofit organization for its 

18 members or an economically disadvantaged 

19 class of persons; or 

20 (C) any special purpose financial assist21 ance program that— 

22 (i) is carried out by a for-profit orga23 nization to meet special social needs; and 

24 (ii) meets standards prescribed in reg25 ulations by the Bureau; or 


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1 (2) if the refusal is required by, or made pursu2 ant to, a program described in paragraph (1). 

3 (d) REASON FOR ADVERSE ACTION; PROCEDURE AP4 PLICABLE.— 

5 (1) IN GENERAL.—Not later than 30 days (or 

6 such longer reasonable time as specified in regula7 tions of the Bureau for any class of income share 

8 agreement transaction) after the date on which an 

9 ISA provider receives a completed application for an 

10 income share agreement, the ISA provider shall no11 tify the applicant of— 

12 (A) the action taken by the ISA provider 

13 with respect to the application; 

14 (B) in the case of an adverse action, a 

15 clear and accurate disclosure of the applicant’s 

16 right to a written statement of reasons in ac17 cordance with paragraph (2) within 60 days 

18 after receiving the notice under this paragraph; 

19 and 

20 (C) the identity of the person or office 

21 from which the statement of reasons described 

22 in paragraph (2) may be obtained. 

23 (2) STATEMENT OF REASONS.— 

24 (A) IN GENERAL.—Each applicant against 

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1 tled to a written statement from the applicable 

2 ISA provider regarding the specific reasons for 

3 that adverse action, if the request is made by 

4 the applicant not later than 60 days after re5 ceiving the notice of an adverse action under 

6 paragraph (1). 

7 (B) TIMING.—An ISA provider shall pro8 vide an applicant with the statement of reasons 

9 under subparagraph (A) by the date that is not 

10 more than 30 days after the date of the con11 sumer’s request. 

12 (C) ORAL STATEMENT.—Notwithstanding 

13 subparagraph (A), the statement described in 

14 this paragraph may be provided orally if the 

15 oral notification advises the applicable applicant 

16 of the right of the applicant to have the state17 ment of reasons confirmed in writing, upon 

18 written request by the applicant. 

19 (D) THIRD-PARTY REQUEST.—If a third 

20 party requests that an ISA provider make a 

21 specific extension of an income share agreement 

22 directly or indirectly to an applicant, the state23 ment under this paragraph may be made di24 rectly by the ISA provider, or indirectly through 


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1 the third party, if the identity of the ISA pro2 vider is disclosed. 

3 (E) VERBAL STATEMENTS.—The require4 ments of this paragraph may be satisfied by a 

5 verbal statement or notification in the case of 

6 an ISA provider that acted on not more than 

7 150 applications during the calendar year pre8 ceding the calendar year in which the applicable 

9 adverse action is taken, as determined under 

10 regulations of the Bureau. 

11 (e) REGULATIONS.— 

12 (1) IN GENERAL.— 

13 (A) ISSUANCE OF REGULATIONS.—The 

14 Bureau shall prescribe regulations to carry out 

15 the purposes of this section. 

16 (B) CONTENTS.—The regulations pre17 scribed under subparagraph (A) may contain 

18 such classifications, differentiation, or other 

19 provisions, and may provide for such adjust20 ments for any class of transactions, as in the 

21 judgment of the Bureau are necessary or proper 

22 to effectuate the purposes of this section, to 

23 prevent circumvention or evasion of this section, 

24 or to facilitate or substantiate compliance this 

25 section. 


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1 (2) CONSISTENT WITH EQUAL CREDIT OPPOR2 TUNITY ACT.—In prescribing regulations under 

3 paragraph (1), the Bureau shall be guided by the 

4 Equal Credit Opportunity Act (12 U.S.C. 1691 et 

5 seq.) and part 1002 of title 12, Code of Federal 

6 Regulations, or any successor regulations. 

7 (3) EXEMPT TRANSACTIONS.— 

8 (A) IN GENERAL.—Subject to subpara9 graph (B), the regulations prescribed under 

10 paragraph (1) may exempt from the provisions 

11 of this section any class of transactions that is 

12 not primarily for personal, family, or household 

13 purposes, or any business or commercial income 

14 share agreement or investment contract made 

15 available by a financial institution, except that 

16 a particular type of income share agreement 

17 within such a class may be exempted only if the 

18 Bureau makes an express finding that applying 

19 this section, or of any provision of this section, 

20 to the income share agreement would not con21 tribute substantially to effectuating the pur22 poses of this section. 

23 (B) LIMITATION.—An exemption granted 

24 under subparagraph (A) shall be— 

25 (i) for not longer than 5 years; and 


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1 (ii) extended only if the Bureau makes 

2 a subsequent determination, in the manner 

3 described by that subparagraph, that the 

4 exemption remains appropriate. 

5 (4) MAINTENANCE OF RECORDS.—Pursuant to 

6 the regulations prescribed under paragraph (1), an 

7 entity making business or commercial income share 

8 agreements shall maintain such records or other 

9 data relating to those agreements as may be nec10 essary to evidence compliance with this section or 

11 enforce any action pursuant to the authority of this 

12 section, except that in no event shall those records 

13 or data be maintained for a period of less than 1 

14 year. 

15 (5) DEFERENCE.—Notwithstanding any power 

16 granted to any Federal agency under this section, 

17 the deference that a court affords to a Federal agen18 cy with respect to a determination made by that 

19 agency relating to the meaning or interpretation of 

20 any provision of this section that is subject to the 

21 jurisdiction of the agency shall be applied as if that 

22 agency were the only agency authorized to apply, en23 force, interpret, or administer the provisions of this 

24 section. 


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1 (f) ENFORCEMENT.—The administrative enforcement 

2 of this section shall be consistent with section 704 of the 

3 Equal Credit Opportunity Act (15 U.S.C. 1691c) and the 

4 regulations implementing such section 704. 

5 (g) SELF-TESTING AND SELF-CORRECTION.—The 

6 incentives for self-testing and self-correction under section 

7 704A of the Equal Credit Opportunity Act (15 U.S.C. 

8 1691c–1), and the regulations implementing such section 

9 704A, shall apply to ISA providers offering income share 

10 agreements. 

11 (h) APPLICABILITY OF OTHER LAWS.—Section 705 

12 of the Equal Credit Opportunity Act (15 U.S.C. 1691d), 

13 and the regulations implementing such section 705, shall 

14 apply to ISA providers offering income share agreements 

15 in the same manner in which those provisions apply to 

16 creditors offering loan products. 

17 (i) CIVIL LIABILITY.—Section 706 of the Equal 

18 Credit Opportunity Act (15 U.S.C. 1691e), and the regu19 lations implementing such section 706, shall apply to ISA 

20 providers offering income share agreements. 

21 (j) REPORTS BY BUREAU AND ATTORNEY GEN22 ERAL.— 

23 (1) IN GENERAL.—Each year, the Bureau and 

24 the Attorney General shall, respectively, submit to 

25 Congress reports concerning the administration of 


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1 the functions of the Bureau and the Attorney Gen2 eral, respectively, under this section, including such 

3 recommendations as the Bureau and the Attorney 

4 General, respectively determine necessary or appro5 priate. 

6 (2) ADDITIONAL INFORMATION.—Each report 

7 of the Bureau submitted under paragraph (1) shall 

8 include the assessment of the Bureau of the extent 

9 to which compliance with the requirements of this 

10 title is being achieved and a summary of the enforce11 ment actions taken by each of the agencies assigned 

12 administrative responsibilities under subsection (f). 

13 SEC. 502. PROHIBITION ON REQUIRING PREAUTHORIZED 

14 ELECTRONIC FUND TRANSFERS UNDER THE 

15 ELECTRONIC FUND TRANSFER ACT. 

16 Section 913(1) of the Electronic Fund Transfer Act 

17 (15 U.S.C. 1693k(1)) is amended by inserting ‘‘, or the 

18 entering into an educational ISA or an income share 

19 agreement (as those terms are defined in section 2 of the 

20 ISA Student Protection Act of 2022) with a consumer’’ 

21 after ‘‘a consumer’’. 


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1 SEC. 503. TREATMENT UNDER THE FAIR CREDIT REPORT2 ING ACT. 

3 (a) IN GENERAL.—Section 605 of the Fair Credit 

4 Reporting Act (15 U.S.C. 1681c) is amended by adding 

5 at the end the following: 

6 ‘‘(i) INCOME SHARE AGREEMENT INFORMATION.— 

7 With respect to an income share agreement (as that term 

8 is defined in section 2 of the ISA Student Protection Act 

9 of 2022), a consumer report made by a consumer report10 ing agency— 

11 ‘‘(1) may include a description of the contract 

12 terms of the income share agreement and, subject to 

13 subsection (a), information with respect to amounts 

14 that are owed under the income share agreement; 

15 and 

16 ‘‘(2) may not include any speculation about fu17 ture amounts that may be owed under the income 

18 share agreement, including the reporting of any pay19 ment caps or early termination amounts.’’. 

20 (b) REGULATIONS.—The Bureau shall promulgate 

21 regulations with respect to the manner in which ISA pro22 viders may furnish, and consumer reporting agencies may 

23 report, information regarding income share agreements. 


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1 SEC. 504. TREATMENT UNDER THE FAIR DEBT COLLECTION 

2 PRACTICES ACT. 

3 (a) IN GENERAL.—Section 803 of the Fair Debt Col4 lection Practices Act (15 U.S.C. 1692a) is amended— 

5 (1) in paragraph (5), by inserting ‘‘, including 

6 such an obligation or alleged obligation arising out 

7 of an income share agreement, as that term is de8 fined in section 2 of the ISA Student Protection Act 

9 of 2022’’ before the period at the end; and 

10 (2) in paragraph (6), in the first sentence, by 

11 inserting ‘‘, including an ISA provider (as defined in 

12 section 2 of the ISA Student Protection Act of 

13 2022),’’ after ‘‘means any person’’. 

14 (b) RULES OF CONSTRUCTION.—Nothing in this sec15 tion, or the amendments made by this section, may be con16 strued for purposes of any other Federal law as consid17 ering— 

18 (1) income share agreements as debts, once the 

19 ISA recipient owes any amounts to the ISA provider 

20 under the income share agreement; or 

21 (2) ISA providers as lenders, once the ISA re22 cipient owes any amounts to the ISA provider under 

23 the applicable income share agreement. 


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1 SEC. 505. TREATMENT OF EDUCATIONAL INCOME SHARE 

2 AGREEMENTS FOR PURPOSES OF MILITARY 

3 LENDING ACT. 

4 Section 987 of title 10, United States Code, is 

5 amended— 

6 (1) by redesignating subsection (i) as subsection 

7 (j); and 

8 (2) by inserting after subsection (h) the fol9 lowing new subsection: 

10 ‘‘(i) TREATMENT OF EDUCATIONAL INCOME SHARE

11 AGREEMENTS.—The Secretary of Defense shall prescribe 

12 regulations to apply this section to educational ISAs (as 

13 that term is defined in section 2 of the ISA Student Pro14 tection Act of 2022), and an educational ISA shall be 

15 deemed to meet the annual percentage rate of interest lim16 itation under subsection (b) of this section if the edu17 cational ISA, as applicable, would meet the requirements 

18 of section 102(b) of such Act (related to appropriate risk 

19 sharing) but with reference to the rate specified in sub20 section (b) of this section.’’. 

21 SEC. 506. TREATMENT UNDER THE SERVICEMEMBERS 

22 CIVIL RELIEF ACT. 

23 Section 207 of the Servicemembers Civil Relief Act 

24 (50 U.S.C. 3937) is amended— 

25 (1) in subsection (d)— 


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1 (A) by redesignating paragraphs (1) and 

2 (2) as paragraphs (2) and (3), respectively; and 

3 (B) by inserting before paragraph (2), as 

4 redesignated by subparagraph (A), the following 

5 new paragraph: 

6 ‘‘(1) EDUCATIONAL INCOME SHARE AGREE7 MENT.—The term ‘educational income share agree8 ment’ has the meaning given the term ‘educational 

9 ISA’ in section 2 of the ISA Student Protection Act 

10 of 2022.’’; 

11 (2) by redesignating subsections (d) and (e) as 

12 subsections (e) and (f), respectively; and 

13 (3) by inserting before subsection (e), as redes14 ignated by paragraph (2), the following new sub15 section (d): 

16 ‘‘(d) EDUCATIONAL INCOME SHARE AGREEMENTS.— 

17 ‘‘(1) IN GENERAL.—An educational income 

18 share agreement shall be considered to be in compli19 ance with the requirements of subsection (a) if such 

20 agreement is compliant with the requirements of sec21 tion 102(b) of the ISA Student Protection Act of 

22 2022. 

23 ‘‘(2) INTEREST RATE.—In carrying out para24 graph (1) of this subsection, the interest rate re25 ferred to section 102(b) of such Act shall be deemed 


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•S 4551 IS

1 to be the rate of interest specified in subsection (a) 

2 of this section.’’. 

3 SEC. 507. PRESERVATION OF CONSUMERS’ CLAIMS AND DE4 FENSES. 

5 (a) APPLICATION OF HOLDER IN DUE COURSE RULE

6 TO INCOME SHARE AGREEMENTS.—Beginning on Janu7 ary 1, 2023, for purposes of applying part 433 of title 

8 16, Code of Federal Regulations (commonly known as the 

9 ‘‘Holder in Due Course Rule’’ or the ‘‘Holder Rule’’), the 

10 term ‘‘consumer credit contract’’, as defined in section 

11 433.1 of such title, shall include income share agreements 

12 that— 

13 (1) involve the advancing of funds to, or on be14 half of, a consumer in return for the consumer’s 

15 agreement to an income share agreement; and 

16 (2) are related, in whole or substantial part, to 

17 a purchase of goods or services from a seller who— 

18 (A) refers the consumer to the provider of 

19 the income share agreement; or 

20 (B) is affiliated with the provider of the in21 come share agreement by common control, con22 tract, or business arrangement. 

23 (b) DISCLOSURES.—In applying section 433.2 of title 

24 16, Code of Federal Regulations, to a consumer credit 


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1 contract that is an income share agreement described in 

2 subsection (a)— 

3 (1) in lieu of the disclosure required under sec4 tion 433.2(a) of title 16, Code of Federal Regula5 tions, the contract shall contain the following disclo6 sure in at least 10 point, bold face type: 

7 ‘‘NOTICE 

8 ‘‘ANY HOLDER OF THIS INCOME SHARE 

9 AGREEMENT IS SUBJECT TO ALL CLAIMS 

10 AND DEFENSES WHICH THE ISA RECIPI11 ENT COULD ASSERT AGAINST THE SELLER 

12 OF THE GOODS OR SERVICES OBTAINED 

13 UNDER THE INCOME SHARE AGREEMENT 

14 OR WITH THE PROCEEDS OF THE INCOME 

15 SHARE AGREEMENT. ANY RECOVERY BY 

16 THE ISA RECIPIENT UNDER SUCH A CLAIM 

17 OR DEFENSE SHALL NOT EXCEED 

18 AMOUNTS PAID BY THE ISA RECIPIENT 

19 UNDER THE INCOME SHARE AGREEMENT.’’; 

20 and 

21 (2) in lieu of the disclosure required under sec22 tion 433.2(b) of title 16, Code of Federal Regula23 tions, the contract shall contain the following disclo24 sure in at least 10 point, bold face type: 

25 ‘‘NOTICE 


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1 ‘‘ANY HOLDER OF THIS INCOME SHARE 

2 AGREEMENT IS SUBJECT TO ALL CLAIMS 

3 AND DEFENSES WHICH THE ISA RECIPI4 ENT COULD ASSERT AGAINST THE SELLER 

5 OF GOODS OR SERVICES OBTAINED UNDER 

6 THE INCOME SHARE AGREEMENT OR WITH 

7 THE PROCEEDS OF THE INCOME SHARE 

8 AGREEMENT. ANY RECOVERY UNDER SUCH 

9 A CLAIM OR DEFENSE BY THE ISA RECIPI10 ENT SHALL NOT EXCEED AMOUNTS PAID 

11 BY THE ISA RECIPIENT UNDER THE IN12 COME SHARE AGREEMENT.’’. 

13 TITLE VI—RELATION TO OTHER 

14 LAWS 

15 SEC. 601. TREATMENT UNDER OTHER LAWS. 

16 (a) INSURANCE AND WAGERING.—An income share 

17 agreement shall not be treated as a contract for insurance, 

18 or as a betting or wagering contract, under any Federal 

19 or State law, except in the case of a State law that ex20 pressly states the law is intended to apply to income share 

21 agreements as defined in this Act. 

22 (b) PAYMENTS NOT CONSIDERED PREPAYMENTS.— 

23 Any right that an ISA recipient may have to pay an 

24 amount greater than the amount financed under an in25 come share agreement in order to extinguish the income 


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1 share agreement earlier than the ISA duration or ISA 

2 maximum number of payments shall not be subject to any 

3 Federal or State law with respect to prepayment penalties, 

4 as long as— 

5 (1) the prepayment complies with the limita6 tions on income share agreements required under 

7 this Act and the amendments made by this Act; and 

8 (2) in the case of a State law, the State law 

9 does not expressly state that the law is intended to 

10 apply to income share agreements as defined in this 

11 Act. 

12 An income share agreement under this Act is not subject 

13 to the application of 15 U.S.C. 1650(e), to the extent it 

14 would be applicable to an income share agreement. 

15 (c) TREATMENT OF EDUCATIONAL ISAS.— 

16 (1) ASSIGNMENT OF FUTURE WAGES FOR EDU17 CATIONAL ISAS.—An educational ISA shall be a 

18 valid, binding, and enforceable contract, notwith19 standing any State law limiting or otherwise regu20 lating assignments of future wages or other income, 

21 except in the case of a State law that expressly 

22 states the law is intended to apply to income share 

23 agreements as defined in this Act. 

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1 CATIONAL ISAS.—An educational ISA shall not be 

2 subject to a State law with respect to usury, interest 

3 rates, fees, and charges for credit, loans, credit or 

4 installment sales, or a State law requiring that in5 stallment payments be substantially equal in 

6 amount, except in the case of a State law that ex7 pressly states the law is intended to apply to income 

8 share agreements as defined in this Act. 

9 (3) PREEMPTION OF STATE LAWS WITH RE10 SPECT TO ABILITY-TO-REPAY AND LICENSING LAWS

11 FOR EDUCATIONAL ISAS.—An educational ISA shall 

12 not be subject to a State law with respect to ‘‘abil13 ity-to-repay’’ requirements, and neither an ISA pro14 vider issuing an educational ISA or its successor in 

15 interest, nor any entity servicing any educational 

16 ISA on behalf of an ISA provider or its successor in 

17 interest, shall be subject to any State law with re18 spect to licensing or registration, except in the case 

19 of a State law that expressly states the law is in20 tended to apply to income share agreements, as de21 fined in this Act. 

22 SEC. 602. RELATION TO STATE LAW. 

23 (a) IN GENERAL.— 

24 (1) RULE OF CONSTRUCTION.—This Act, other 

25 than the provisions of titles I and III and section 


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1 501, may not be construed as annulling, altering, or 

2 affecting, or exempting any person subject to the 

3 provisions of this Act from complying with the stat4 utes, regulations, orders, or interpretations in effect 

5 in any State, except to the extent that any such pro6 vision of law is inconsistent with the provisions of 

7 this Act, and then only to the extent of the incon8 sistency. 

9 (2) GREATER PROTECTION UNDER STATE

10 LAW.—For purposes of this subsection, a statute, 

11 regulation, order, or interpretation in effect in any 

12 State is not inconsistent with the provisions of this 

13 Act if the protection that such statute, regulation, 

14 order, or interpretation affords to ISA recipients or 

15 applicants is greater than the protection provided 

16 under this Act. A determination regarding whether 

17 a statute, regulation, order, or interpretation in ef18 fect in any State is inconsistent with the provisions 

19 of this Act may be made by the Bureau on its own 

20 motion or in response to a nonfrivolous petition initi21 ated by any interested person. 

22 (b) RELATION TO OTHER PROVISIONS OF ENUMER23 ATED CONSUMER LAWS THAT RELATE TO STATE LAW.— 

24 No provision of this Act, except as provided in titles I and 

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1 iting, or superseding the operation of any provision of an 

2 enumerated consumer law that relates to the application 

3 of a law in effect in any State with respect to such enu4 merated consumer law. 

5 (c) ADDITIONAL CONSUMER PROTECTION REGULA6 TIONS IN RESPONSE TO STATE ACTION.— 

7 (1) NOTICE OF PROPOSED RULE REQUIRED.— 

8 The Bureau shall issue a notice of proposed rule9 making whenever a majority of the States has en10 acted a resolution in support of the establishment or 

11 modification of a consumer protection regulation by 

12 the Bureau. 

13 (2) BUREAU CONSIDERATIONS REQUIRED FOR

14 ISSUANCE OF FINAL REGULATION.—Before pre15 scribing a final regulation based upon a notice 

16 issued under paragraph (1), the Bureau shall take 

17 into account whether— 

18 (A) the proposed regulation would afford 

19 greater protection to consumers than any exist20 ing regulation; 

21 (B) the intended benefits of the proposed 

22 regulation for consumers would outweigh any 

23 increased costs or inconveniences for con24 sumers, and would not discriminate unfairly 

25 against any category or class of consumers; and 


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1 (C) a Federal banking agency has advised 

2 that the proposed regulation is likely to present 

3 an unacceptable safety and soundness risk to 

4 insured depository institutions. 

5 (3) EXPLANATION OF CONSIDERATIONS.—The 

6 Bureau— 

7 (A) shall include a discussion of the con8 siderations required in paragraph (2) in the 

9 Federal Register notice of a final regulation 

10 prescribed pursuant to this subsection; and 

11 (B) whenever the Bureau determines not 

12 to prescribe a final regulation, shall publish an 

13 explanation of such determination in the Fed14 eral Register, and provide a copy of such expla15 nation to each State that enacted a resolution 

16 in support of the proposed regulation, the Com17 mittee on Banking, Housing, and Urban Affairs 

18 of the Senate, and the Committee on Financial 

19 Services of the House of Representatives. 

20 (4) RESERVATION OF AUTHORITY.—No provi21 sion of this subsection shall be construed as limiting 

22 or restricting the authority of the Bureau to enhance 

23 consumer protection standards established pursuant 

24 to this Act in response to a motion of the Bureau 


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1 or in response to a request by any other interested 

2 person. 

3 (5) RULE OF CONSTRUCTION.—No provision of 

4 this subsection shall be construed as exempting the 

5 Bureau from complying with subchapter II of chap6 ter 5 of title 5, United States Code. 

7 TITLE VII—ENFORCEMENT AND 

8 REPORTING 

9 SEC. 701. ENFORCEMENT. 

10 (a) ENFORCING AGENCIES.—Subject to subtitle B of 

11 the Consumer Financial Protection Act of 2010 (12 

12 U.S.C. 5511 et seq.), compliance with the requirements 

13 imposed under this Act shall be enforced under— 

14 (1) section 8 of the Federal Deposit Insurance 

15 Act by the appropriate Federal banking agency, as 

16 defined in section 3(q) of the Federal Deposit Insur17 ance Act (12 U.S.C. 1813(q)), with respect to— 

18 (A) national banks, Federal savings asso19 ciations, and Federal branches and Federal 

20 agencies of foreign banks; 

21 (B) member banks of the Federal Reserve 

22 System (other than national banks), branches 

23 and agencies of foreign banks (other than Fed24 eral branches, Federal agencies, and insured 

25 State branches of foreign banks), commercial 


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1 lending companies owned or controlled by for2 eign banks, and organizations operating under 

3 section 25 or 25A of the Federal Reserve Act 

4 (12 U.S.C. 601 et seq.); and 

5 (C) banks and State savings associations 

6 insured by the Federal Deposit Insurance Cor7 poration (other than members of the Federal 

8 Reserve System), and insured State branches of 

9 foreign banks; 

10 (2) the Federal Credit Union Act (12 U.S.C. 

11 1751 et seq.), by the Director of the National Credit 

12 Union Administration, with respect to any Federal 

13 credit union; 

14 (3) part A of subtitle VII of title 49, United 

15 States Code, by the Secretary of Transportation, 

16 with respect to any air carrier or foreign air carrier 

17 subject to that part; 

18 (4) the Packers and Stockyards Act, 1921 (7 

19 U.S.C. 191 et seq.) (except as provided in section 

20 406 of that Act (7 U.S.C. 226)), by the Secretary 

21 of Agriculture, with respect to any activities subject 

22 to that Act; 

23 (5) the Farm Credit Act of 1971 (12 U.S.C. 

24 2001 et seq.), by the Farm Credit Administration 

25 with respect to any Federal land bank, Federal land 


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1 bank association, Federal intermediate credit bank, 

2 or production credit association; 

3 (6) subtitle E of the Consumer Financial Pro4 tection Act of 2010 (12 U.S.C. 5561 et seq.), by the 

5 Bureau, with respect to any person subject to this 

6 Act; and 

7 (7) sections 21B and 21C of the Securities Ex8 change Act of 1934 (15 U.S.C. 78u–2, 78u–3), in 

9 the case of a broker or dealer, other than a deposi10 tory institution, by the Securities and Exchange 

11 Commission. 

12 (b) VIOLATIONS OF THIS ACT DEEMED VIOLATIONS

13 OF PRE-EXISTING STATUTORY REQUIREMENTS; ADDI14 TIONAL AGENCY POWERS.—For the purpose of the exer15 cise by any agency referred to in subsection (a) of its pow16 ers under any Act referred to in that subsection, a viola17 tion of any requirement imposed under this Act shall be 

18 deemed to be a violation of a requirement imposed under 

19 that Act. In addition to its powers under any provision 

20 of law specifically referred to in subsection (a), each of 

21 the agencies referred to in that subsection may exercise, 

22 for the purpose of enforcing compliance with any require23 ment imposed under this Act, any other authority con24 ferred on it by law. 


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1 (c) OVERALL ENFORCEMENT AUTHORITY OF THE

2 BUREAU OF CONSUMER FINANCIAL PROTECTION.—Ex3 cept to the extent that enforcement of the requirements 

4 imposed under this Act is specifically committed to some 

5 other Government agency under any of paragraphs (1) 

6 through (5) of subsection (a), and subject to subtitle B 

7 of the Consumer Financial Protection Act of 2010 (12 

8 U.S.C. 5511 et seq.), the Bureau shall be authorized to 

9 enforce such requirements. All of the functions and powers 

10 of the Bureau under the Consumer Financial Protection 

11 Act of 2010 (12 U.S.C. 5301 et seq.) are available to the 

12 Bureau to enforce compliance by any person with the re13 quirements under this Act, irrespective of whether that 

14 person is engaged in commerce or meets any other juris15 dictional tests under the Consumer Financial Protection 

16 Act of 2010 (12 U.S.C. 5301 et seq.). 

17 (d) RULES AND REGULATIONS.—The authority of 

18 the Bureau to issue regulations under this Act does not 

19 impair the authority of any other agency designated in 

20 this section to make rules respecting its own procedures 

21 in enforcing compliance with requirements imposed under 

22 this Act. 


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1 SEC. 702. REPORTING REQUIREMENT FOR THE BUREAU OF 

2 CONSUMER FINANCIAL PROTECTION. 

3 Not less than frequently than once every 5 years, the 

4 Director shall submit to Congress a report that includes— 

5 (1) information on the prevalence and utiliza6 tion of educational ISAs and income share agree7 ments; and 

8 (2) any other information pertaining to edu9 cational ISAs and income share agreements that the 

10 Director determines is appropriate. 

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