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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3404 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  1st Session
                                S. 3404

  To require certain protections for student loan borrowers, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            December 5, 2023

Mr. Durbin (for himself, Ms. Klobuchar, Mr. Reed, Ms. Smith, Mr. Welch, 
Ms. Duckworth, and Ms. Warren) introduced the following bill; which was 
 read twice and referred to the Committee on Health, Education, Labor, 
                              and Pensions

_______________________________________________________________________

                                 A BILL

 
  To require certain protections for student loan borrowers, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Borrower Bill of 
Rights''.

SEC. 2. HIGHER EDUCATION ACT OF 1965 AMENDMENTS.

    (a) Student Loan Information by Eligible Lenders.--Section 433 of 
the Higher Education Act of 1965 (20 U.S.C. 1083) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (12), by striking ``and'' after 
                the semicolon;
                    (B) in paragraph (13), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(14) a statement that--
                    ``(A) the borrower may be entitled to servicemember 
                and veteran benefits under the Servicemembers Civil 
                Relief Act (50 U.S.C. 3901 et seq.) and other Federal 
                or State laws; and
                    ``(B) a Servicemember and Veterans Liaison 
                designated under section 128(e)(16)(K)(i) of the Truth 
                in Lending Act (15 U.S.C. 1638(e)(16)(K)(i)) is 
                available to answer inquiries about servicemember and 
                veteran benefits, including the toll-free telephone 
                number and email address to contact the Liaison 
                pursuant to such section.''; and
            (2) in subsection (e)--
                    (A) in paragraph (2), by adding at the end the 
                following:
                    ``(D) A statement that--
                            ``(i) the borrower may be entitled to 
                        servicemember and veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. 3901 
                        et seq.) and other Federal or State laws; and
                            ``(ii) a Servicemember and Veterans Liaison 
                        designated under section 128(e)(16)(K)(i) of 
                        the Truth in Lending Act (15 U.S.C. 
                        1638(e)(16)(K)(i)) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits, including the toll-free telephone 
                        number and email address to contact the Liaison 
                        pursuant to such section.
                    ``(E) A statement that a repayment specialist 
                office or unit designated under section 
                128(e)(16)(J)(i) of the Truth in Lending Act (15 U.S.C. 
                1638(e)(16)(J)(i)) is available to answer inquiries 
                related to alternative repayment options, including the 
                toll-free telephone number and email address to contact 
                the specialist pursuant to section 128(e)(16)(J)(iii) 
                of such Act.''; and
                    (B) in paragraph (3), by adding at the end the 
                following:
                    ``(F) A statement that--
                            ``(i) the borrower may be entitled to 
                        servicemember and veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. 3901 
                        et seq.) and other Federal or State laws; and
                            ``(ii) a Servicemember and Veterans Liaison 
                        designated under section 128(e)(16)(K)(i) of 
                        the Truth in Lending Act (15 U.S.C. 
                        1638(e)(16)(K)(i)) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits, including the toll-free telephone 
                        number and email address to contact the Liaison 
                        pursuant to such section.
                    ``(G) A statement that a repayment specialist 
                office or unit designated under section 
                128(e)(16)(J)(i) of the Truth in Lending Act (15 U.S.C. 
                1638(e)(16)(J)(i)) is available to answer inquiries 
                related to alternative repayment options, including the 
                toll-free telephone number and email address to contact 
                the specialist pursuant to section 128(e)(16)(J)(iii) 
                of such Act.''.
    (b) Terms and Conditions of Loans.--Section 455 of the Higher 
Education Act of 1965 (20 U.S.C. 1087e) is amended by adding at the end 
the following:
    ``(r) Prepayment, Payment Application, and Payment Allocation.--
            ``(1) In general.--A borrower may prepay all or part of a 
        loan made under this part at any time without penalty.
            ``(2) Prepayment.--
                    ``(A) In general.--If a borrower pays any amount in 
                excess of the amount due for a loan made under this 
                part, the excess amount shall be a prepayment.
                    ``(B) Application of prepayment.--If a borrower 
                makes a prepayment, the Secretary shall--
                            ``(i) apply the prepaid amount according to 
                        the terms of the promissory note signed by the 
                        borrower;
                            ``(ii) upon request of the borrower, apply 
                        the prepaid amount to the outstanding loan 
                        principal; or
                            ``(iii) upon request of the borrower, 
                        advance the due date of the next payment and 
                        notify the borrower of any revised due date for 
                        the next payment.
            ``(3) Payment allocation.--If a borrower has more than 1 
        loan made under this part, the Secretary shall allocate any 
        prepayment or other partial payment in the same manner as 
        amounts are allocated under section 128(e)(16)(G)(i) of the 
        Truth in Lending Act (15 U.S.C. 1638(e)(16)(G)(i)).''.
    (c) Contracts.--Section 456 of the Higher Education Act of 1965 (20 
U.S.C. 1087f) is amended--
            (1) in subsection (a), by striking paragraph (3) and 
        inserting the following:
            ``(3) Rules of construction.--
                    ``(A) Consortia.--Nothing in this section shall be 
                construed as a limitation of the authority of any State 
                agency to enter into an agreement for the purposes of 
                this section as a member of a consortium of State 
                agencies.
                    ``(B) Compliance with state and federal laws.--
                Nothing in this section shall be construed as altering, 
                limiting, or affecting any obligation by an entity with 
                which the Secretary enters into a contract under this 
                section to comply with any applicable Federal or State 
                law, including any Federal consumer financial law, as 
                defined in section 1002(14) of the Consumer Financial 
                Protection Act of 2010 (12 U.S.C. 5481(14)).
                    ``(C) Authorities.--Nothing in this section shall 
                be construed as altering, limiting, or affecting the 
                authority of a State attorney general or any other 
                State regulatory or enforcement agency or authority to 
                bring an action or other regulatory proceeding arising 
                solely under the law of such State.''; and
            (2) by adding at the end the following:
    ``(c) Applicability of Provisions Under the Consumer Financial 
Protection Act of 2010.--
            ``(1) Consumer financial product or service.--A consumer 
        financial product or service offered by an entity with which 
        the Secretary enters into a contract under this section for 
        origination, servicing, or collection described in subsection 
        (b), as part of such contract, shall have the meaning given the 
        term in section 1002 of the Consumer Financial Protection Act 
        of 2010 (12 U.S.C. 5481).
            ``(2) Covered person.--Any entity with which the Secretary 
        enters into a contract under this section for origination, 
        servicing, or collection described in subsection (b) shall be 
        considered a `covered person' (as defined in section 1002 of 
        the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481)) 
        and subject to the provisions of the Consumer Financial 
        Protection Act of 2010 (12 U.S.C. 5481 et seq.).
            ``(3) Postsecondary educational lender or servicer.--Any 
        entity with which the Secretary enters into a contract under 
        this section for origination, servicing, or collection, as 
        described in subsection (b), and is engaged in the provision 
        of, or offering, servicing shall be considered a `postsecondary 
        educational lender or servicer' (as defined in section 128(e) 
        of the Truth in Lending Act (15 U.S.C. 1638(e)), and subject to 
        the provisions of section 128(e) of the Truth in Lending Act 
        (12 U.S.C. 1638(e)).
    ``(d) Complaints From Student Loan Borrowers.--In awarding any 
contract under this section for origination, servicing, or collection 
described in subsection (b), the Secretary shall require, as part of 
such contract, any entity receiving such an award--
            ``(1) to respond to consumer complaints submitted to any 
        Federal, State, or local agency that accepts complaints from 
        student loan borrowers, including the Bureau of Consumer 
        Financial Protection, by borrowers who owe loans made under 
        this part; and
            ``(2) to share information about consumer complaints with 
        the Secretary, the Bureau of Consumer Financial Protection, the 
        Federal Trade Commission, the Department of Veterans Affairs, 
        any State attorney general, or any other Federal or State 
        regulatory or enforcement agency that compiles information 
        about such complaints.
    ``(e) Limitations on Contracts.--Any entity with which the 
Secretary enters into a contract under this section shall be 
prohibited, as part of such contract, from marketing to the borrower of 
a loan made, insured, or guaranteed under this title a financial 
product or service--
            ``(1) using data obtained as a result of the contract or 
        the relationship with the borrower stemming from the contract;
            ``(2) during any outreach or contact with the borrower 
        resulting from the contract or the relationship with the 
        borrower stemming from the contract; or
            ``(3) on any platform or through any method resulting from 
        the contract or the relationship with the borrower stemming 
        from the contract.
    ``(f) Student Loan Servicing Interagency Working Group.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of the Student Loan Borrower Bill of Rights, the 
        Secretary shall establish a student loan servicing interagency 
        working group co-chaired by the Secretary and the Director of 
        the Bureau of Consumer Financial Protection and including the 
        Chief Operating Officer of the Office of Federal Student Aid, 
        the Director of the Office of Management and Budget, the 
        Secretary of the Treasury, and the heads of any other relevant 
        Federal departments or agencies.
            ``(2) Advisory report on rulemaking.--
                    ``(A) In general.--Not later than 120 days after 
                the date the working group under paragraph (1) is 
                established, the working group shall publish an 
                advisory report making recommendations to the Director 
                of the Bureau of Consumer Financial Protection related 
                to the promulgation of regulations under section 
                128(e)(17)(A) of the Truth in Lending Act (15 U.S.C. 
                1638(e)(17)(A)) with respect to entities with which the 
                Secretary has entered into a contract under this 
                section.
                    ``(B) Public feedback.--Following the publication 
                of the advisory report required under subparagraph (A), 
                the Secretary shall accept, for not less than 60 days, 
                from the public specific feedback on the 
                recommendations included in the report.
            ``(3) Publication of final recommendations.--Not later than 
        30 days following the conclusion of the public feedback process 
        described in paragraph (2)(B), the Secretary shall publish 
        final recommendations for the Director of the Bureau of 
        Consumer Financial Protection related to the promulgation of 
        regulations under section 128(e)(17)(A) of the Truth in Lending 
        Act (15 U.S.C. 1638(e)(17)(A)).
            ``(4) Policy direction to federal student aid.--The working 
        group shall develop policy direction for the Office of Federal 
        Student Aid to incorporate, into contracts awarded under this 
        section, applicable requirements and standards promulgated 
        under section 128(e)(17)(A) of the Truth in Lending Act (15 
        U.S.C. 1638(e)(17)(A)) or described in section 
        128(e)(17)(B)(i)(II) of such Act.
            ``(5) Meetings.--After the Secretary publishes final 
        recommendations under paragraph (3), the working group shall 
        meet not less often than once per year including to--
                    ``(A) evaluate the application of regulations 
                promulgated under section 128(e)(17)(A) of the Truth in 
                Lending Act (15 U.S.C. 1638(e)(17)(A)) on entities with 
                which the Secretary has entered into a contract under 
                this section;
                    ``(B) evaluate the Office of Federal Student Aid's 
                implementation of policy direction developed pursuant 
                to paragraph (4);
                    ``(C) develop and implement an oversight plan to 
                ensure compliance by entities with which the Secretary 
                has entered into a contract under this section with 
                policy direction developed under paragraph (4) and 
                regulations promulgated under section 128(e)(17)(A) of 
                the Truth in Lending Act (15 U.S.C. 1638(e)(17)(A)) or 
                described in section 128(e)(17)(B)(i)(II) of such Act; 
                and
                    ``(D) undertake other activities to improve 
                coordination among the members of the working group as 
                it relates to the Secretary's administration of loans 
                made, insured, or guaranteed under this title.
            ``(6) Investigations.--In order to carry out its duties 
        under this subsection, the working group may engage in 
        investigations of entities with which the Secretary has entered 
        into a contract under this section.
            ``(7) Rule of construction.--Nothing in this subsection 
        shall be considered to alter, limit, or restrict the Bureau of 
        Consumer Financial Protection's obligations under chapter 5 of 
        title 5, United States Code (commonly known as the 
        `Administrative Procedures Act'), including the Director's 
        obligation to provide notice, solicit public comment, and 
        respond to such comment when issuing regulations.''.
    (d) Removal of Record of Default.--Part G of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by adding at 
the end the following:

``SEC. 494. REMOVAL OF RECORD OF DEFAULT.

    ``Upon repaying in full the amount due on a defaulted loan made, 
insured, or guaranteed under this title, the Secretary, guaranty 
agency, or other holder of the loan shall request any consumer 
reporting agency to which the Secretary, guaranty agency, or holder, as 
applicable, reported the default of the loan, to remove any adverse 
item of information relating to such loan from the borrower's credit 
history.''.
    (e) Removal of Record of Default From Credit History.--Section 
455(g) of the Higher Education Act of 1965 (20 U.S.C. 1087e(g)) is 
amended by adding at the end the following:
            ``(3) Consumer reporting agencies.--Upon obtaining a 
        Federal Direct Consolidation Loan that discharges the liability 
        on a defaulted loan made, insured, or guaranteed under this 
        title, the Secretary, guaranty agency, or other holder of the 
        loan shall request any consumer reporting agency to which the 
        Secretary, guaranty agency or holder, as applicable, reported 
        the default of the loan, to remove any adverse item of 
        information relating to such loan from the borrower's credit 
        history.''.
    (f) Default Reduction Program.--Section 428F(a)(1)(C) of the Higher 
Education Act of 1965 (20 U.S.C. 1078-6(a)(1)(C)) is amended by 
striking ``to remove the record of the default from the borrower's 
credit history'' and inserting ``to remove any adverse item of 
information relating to such loan from the borrower's credit history''.

SEC. 3. TRUTH IN LENDING ACT AMENDMENTS.

    (a) In General.--The Truth in Lending Act (15 U.S.C. 1601 et seq.) 
is amended--
            (1) in section 128 (15 U.S.C. 1638)--
                    (A) in subsection (e)--
                            (i) in the subsection heading, by striking 
                        ``Private'';
                            (ii) in paragraph (1)(O), by striking 
                        ``paragraph (6)'' and inserting ``paragraph 
                        (10)'';
                            (iii) in paragraph (2)(L), by striking 
                        ``paragraph (6)'' and inserting ``paragraph 
                        (10)'';
                            (iv) in paragraph (4)(C), by striking 
                        ``paragraph (7)'' and inserting ``paragraph 
                        (11)'';
                            (v) by redesignating paragraphs (5) through 
                        (11) as paragraphs (9) through (15), 
                        respectively;
                            (vi) by inserting after paragraph (4) the 
                        following:
            ``(5) Disclosures before first fully amortized payment.--
        Not fewer than 30 days and not more than 150 days before the 
        first fully amortized payment on a postsecondary education loan 
        is due from the borrower, the postsecondary educational lender 
        or servicer shall disclose to the borrower, clearly and 
        conspicuously--
                    ``(A) the information described in--
                            ``(i) paragraph (2)(A) (adjusted, as 
                        necessary, for the rate of interest in effect 
                        on the date the first fully amortized payment 
                        on a postsecondary education loan is due);
                            ``(ii) subparagraphs (B) through (G) of 
                        paragraph (2);
                            ``(iii) paragraph (2)(H) (adjusted, as 
                        necessary, for the rate of interest in effect 
                        on the date the first fully amortized payment 
                        on a postsecondary education loan is due);
                            ``(iv) paragraph (2)(K); and
                            ``(v) subparagraphs (O) and (P) of 
                        paragraph (2);
                    ``(B) the scheduled date upon which the first fully 
                amortized payment is due;
                    ``(C) the name of the postsecondary educational 
                lender and servicer, and the address to which 
                communications and payments should be sent including a 
                telephone number, email address, and website where the 
                borrower may obtain additional information;
                    ``(D) a description of all alternative repayment 
                options, including applicable repayment plans and 
                options for loan consolidation, loan forgiveness, and 
                loan repayment; and
                    ``(E) a statement that a Servicemember and Veterans 
                Liaison designated under paragraph (16)(K) is available 
                to answer inquiries about servicemember and veteran 
                benefits related to postsecondary education loans, 
                including the toll-free telephone number and email 
                address to contact the Liaison pursuant to paragraph 
                (16)(K).
            ``(6) Disclosures when borrower is at-risk.--
                    ``(A) In general.--Not more than 5 days after a 
                postsecondary educational lender or servicer determines 
                that a borrower meets the criteria established in 
                paragraph (16)(J)(i), the postsecondary educational 
                lender or servicer shall--
                            ``(i) disclose to the borrower, in writing, 
                        clearly and conspicuously that a repayment 
                        specialist office or unit is available to 
                        discuss alternative repayment options and 
                        answer borrower inquiries related to their 
                        postsecondary educational loan, including the 
                        toll-free number to contact the office or unit 
                        pursuant to paragraph (16)(J)(iii); and
                            ``(ii) inform the borrower, in writing, of 
                        the existence of discharge programs, the 
                        criteria required to qualify for discharge 
                        under each of such programs, and how to apply.
                    ``(B) Outreach to at-risk borrowers.--The Director, 
                in accordance with paragraph (17)(A), shall promulgate 
                rules to establish a timeline for additional live 
                outreach by the repayment specialist office or unit to 
                at-risk borrowers.
            ``(7) Actions when borrower is 30 days delinquent.--
                    ``(A) In general.--Not more than 5 days after a 
                borrower becomes 30 days delinquent on a postsecondary 
                education loan, the repayment specialist office or unit 
                designated under paragraph (16)(J) shall--
                            ``(i) make a good faith effort to establish 
                        live contact with the borrower to discuss 
                        alternative repayment options and other options 
                        available to avoid default; and
                            ``(ii) disclose to the borrower, in 
                        writing, clearly and conspicuously--
                                    ``(I) of the availability of 
                                income-driven repayment plans under 
                                sections 455 and 493C of the Higher 
                                Education Act of 1965 (20 U.S.C. 1087e 
                                and 1098e) and the public service loan 
                                forgiveness program under section 
                                455(m) of the Higher Education Act of 
                                1965 (20 U.S.C. 1087e(m)) and how to 
                                apply;
                                    ``(II) the minimum payment that the 
                                borrower must make to bring the loan 
                                current;
                                    ``(III) a statement, related to 
                                potential charge off (as defined in 
                                paragraph (16)(A)) or assignment to 
                                collections as appropriate, to 
                                include--
                                            ``(aa) the date on which 
                                        the loan will be charged-off or 
                                        assigned to collections if no 
                                        payment is made or the minimum 
                                        payment required to be 
                                        disclosed pursuant to item (bb) 
                                        is not made;
                                            ``(bb) the minimum payment 
                                        that must be made to avoid the 
                                        loan being charged off or 
                                        assigned to collection; and
                                            ``(cc) the consequences to 
                                        the borrower of charge off or 
                                        assignment to collections;
                                    ``(IV) a statement that a 
                                Servicemember and Veterans Liaison 
                                designated under paragraph (16)(K) is 
                                available to answer inquiries about 
                                servicemember and veteran benefits 
                                related to postsecondary education 
                                loans, including the toll-free 
                                telephone number and email address to 
                                contact the Liaison pursuant to 
                                paragraph (16)(K); and
                                    ``(V) a statement that a repayment 
                                specialist office or unit designated 
                                under paragraph (16)(J) is available to 
                                answer inquiries related to alternative 
                                repayment options, including the toll-
                                free telephone number and email address 
                                to contact the specialist pursuant to 
                                paragraph (16)(J)(iii).
                    ``(B) Modifications.--The disclosures described in 
                subparagraph (A)(ii) may be modified subject to 
                regulations promulgated by the Director, based on 
                consumer testing and in accordance with paragraph 
                (17)(A).
            ``(8) Actions when borrower is having difficulty making 
        payment or is 60 days delinquent.--
                    ``(A) In general.--Not more than 5 days after a 
                borrower notifies a postsecondary educational lender or 
                servicer that the borrower is having difficulty making 
                payment or a borrower becomes 60 days delinquent on a 
                postsecondary education loan, the repayment specialist 
                office or unit designated under paragraph (16)(J) 
                shall--
                            ``(i) complete a full review of the 
                        borrower's postsecondary education loan and 
                        make a reasonable effort to obtain the 
                        information necessary to determine--
                                    ``(I) if the borrower is eligible 
                                for any alternative repayment option, 
                                including Federal Direct Consolidation 
                                Loans under part D of title IV of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1087a et seq.), as applicable, or the 
                                public service loan forgiveness program 
                                under section 455(m) of the Higher 
                                Education Act of 1965 (20 U.S.C. 
                                1087e(m));
                                    ``(II) if the borrower is eligible 
                                for servicemember or veteran benefits 
                                under the Servicemembers Civil Relief 
                                Act (50 U.S.C. 3901 et seq.) or other 
                                Federal or State law related to 
                                postsecondary education loans; and
                                    ``(III) if the postsecondary 
                                education loan, if a loan made, 
                                insured, or guaranteed under part B, D, 
                                or E of title IV of the Higher 
                                Education Act of 1965 (20 U.S.C. 1071 
                                et seq., 1087a et seq., and 1087aa et 
                                seq.), is eligible for discharge by the 
                                Secretary;
                            ``(ii) make a good faith effort to 
                        establish live contact with the borrower to 
                        provide the borrower information about 
                        alternative repayment options and benefits for 
                        which the borrower is eligible, including all 
                        terms, conditions, and fees or costs associated 
                        with such repayment plan, pursuant to paragraph 
                        (9)(D);
                            ``(iii) provide to the borrower in writing, 
                        in simple and understandable terms, such 
                        information required by clause (ii);
                            ``(iv) allow the borrower a reasonable 
                        amount of time to apply for an alternative 
                        repayment option or benefits, if eligible, 
                        before the loan is placed in default;
                            ``(v) notify the borrower that a 
                        Servicemember and Veterans Liaison designated 
                        under paragraph (16)(K) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits related to postsecondary education 
                        loans, including the toll-free telephone number 
                        and email address to contact the Liaison 
                        pursuant to paragraph (16)(K); and
                            ``(vi) notify the borrower that a repayment 
                        specialist office or unit designated under 
                        paragraph (16)(J) is available to answer 
                        inquiries related to alternative repayment 
                        options, including the toll-free telephone 
                        number and email address to contact the 
                        specialist pursuant to paragraph (16)(J)(iii).
                    ``(B) Forbearance or deferment.--If, after 
                receiving information about alternative repayment 
                options from the repayment specialist, a borrower 
                notifies the postsecondary educational lender or 
                servicer that a long-term alternative repayment option 
                is not appropriate, the postsecondary educational 
                lender or servicer may comply with this paragraph by 
                providing the borrower, in writing, in simple and 
                understandable terms, information about short-term 
                options to address an anticipated short-term difficulty 
                in making payments, such as forbearance or deferment 
                options, including all terms, conditions, and fees or 
                costs associated with such options pursuant to 
                paragraph (9)(D).
                    ``(C) Notification process.--
                            ``(i) In general.--Each postsecondary 
                        educational lender or servicer shall establish 
                        a process, in accordance with subparagraph (A), 
                        for a borrower to notify the lender that--
                                    ``(I) the borrower is having 
                                difficulty making payments on a 
                                postsecondary education loan; and
                                    ``(II) a long-term alternative 
                                repayment option is not appropriate.
                            ``(ii) Consumer financial protection bureau 
                        requirements.--The Director shall, based on 
                        consumer testing, and in accordance with 
                        paragraph (17)(A), promulgate rules 
                        establishing minimum standards for 
                        postsecondary educational lender or servicers 
                        in carrying out the requirements of this 
                        paragraph and a model form for borrowers to 
                        notify postsecondary educational lender or 
                        servicers of the information under this 
                        paragraph.'';
                            (vii) in paragraph (9), as redesignated by 
                        clause (v), by adding at the end the following:
                    ``(D) Model disclosure form for alternative 
                repayment options, forbearance, and deferment 
                options.--Not later than 2 years after the date of 
                enactment of the Student Loan Borrower Bill of Rights, 
                the Director shall, based on consumer testing and 
                through regulations promulgated in accordance with 
                paragraph (17)(A), develop and issue model forms to 
                allow borrowers to compare alternative repayment 
                options, forbearance, and deferment options with the 
                borrower's existing repayment plan with respect to a 
                postsecondary education loan. In developing such forms, 
                the Director shall consider and evaluate the following 
                for inclusion:
                            ``(i) The total amount to be paid over the 
                        life of the loan.
                            ``(ii) The total amount in interest to be 
                        paid over the life of the loan.
                            ``(iii) The monthly payment amount.
                            ``(iv) The expected pay-off date.
                            ``(v) Other related fees and costs, as 
                        applicable.
                            ``(vi) Eligibility requirements, and how 
                        the borrower can apply for an alternative 
                        repayment option, forbearance, or deferment 
                        option.
                            ``(vii) Any relevant consequences due to 
                        action or inaction, such as default, including 
                        any actions that would result in the loss of 
                        eligibility for alternative repayment options, 
                        forbearance, deferment, or discharge 
                        options.'';
                            (viii) in paragraph (12), as redesignated 
                        by clause (v), by striking ``paragraph (7)'' 
                        and inserting ``paragraph (11)'';
                            (ix) by striking paragraph (14), as 
                        redesignated by clause (v), and inserting the 
                        following:
            ``(14) Definitions.--In this subsection--
                    ``(A) the terms `covered educational institution', 
                `private educational lender', and `private education 
                loan' have the same meanings as in section 140;
                    ``(B) the term `postsecondary education loan' 
                means--
                            ``(i) a private education loan;
                            ``(ii) a loan made, insured, or guaranteed 
                        under part B, D, or E of title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1071 et seq., 
                        1087a et seq., and 1087aa et seq.); or
                            ``(iii) a loan made, insured, or guaranteed 
                        under title VII or title VIII of the Public 
                        Health Service Act (42 U.S.C. 292 et seq. and 
                        296 et seq.);
                    ``(C) the term `postsecondary educational lender or 
                servicer' means--
                            ``(i) an eligible lender of a loan made, 
                        insured, or guaranteed under part B of the 
                        Higher Education Act of 1965 (20 U.S.C. 1071 et 
                        seq.);
                            ``(ii) any entity with which the Secretary 
                        enters into a contract under section 456 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1087f) 
                        for origination, servicing, or collection 
                        described in subsection (b) of such section 456 
                        and is engaged in the provision of, or 
                        offering, servicing, as defined in paragraph 
                        (16)(A)(iv), or collections regardless of 
                        whether the Secretary identifies the entity as 
                        a `servicer' in such contract;
                            ``(iii) a private educational lender;
                            ``(iv) any other person or entity engaged 
                        in the business of securing, making, or 
                        extending postsecondary education loans on 
                        behalf of a person or entity described in 
                        clause (i) or (iii); or
                            ``(v) any other holder of a postsecondary 
                        education loan other than the Secretary;
                    ``(D) the term `Director' means the Director of the 
                Bureau; and
                    ``(E) the term `Secretary' means the Secretary of 
                Education.'';
                            (x) in paragraph (15), as redesignated by 
                        clause (v), by striking ``paragraph (5)'' and 
                        inserting ``paragraph (9)''; and
                            (xi) by adding at the end the following:
            ``(16) Student loan borrower bill of rights.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Borrower.--The term `borrower' means 
                        the person to whom a postsecondary education 
                        loan is extended.
                            ``(ii) Charge off.--The term `charge off' 
                        means charge to profit and loss, or subject to 
                        any similar action.
                            ``(iii) Qualified written request.--
                                    ``(I) In general.--The term 
                                `qualified written request' means a 
                                written correspondence of a borrower 
                                (other than notice on a payment medium 
                                supplied by the postsecondary 
                                educational lender or servicer) 
                                transmitted by mail, facsimile, or 
                                electronically through an email address 
                                or website designated by the 
                                postsecondary educational lender or 
                                servicer  to receive communications 
                                from borrowers that--
                                            ``(aa) includes, or 
                                        otherwise enables the 
                                        postsecondary educational 
                                        lender or servicer to identify, 
                                        the name and account of the 
                                        borrower; and
                                            ``(bb) includes, to the 
                                        extent applicable--

                                                    ``(AA) sufficient 
                                                detail regarding the 
                                                information sought by 
                                                the borrower; or

                                                    ``(BB) a statement 
                                                of the reasons for the 
                                                belief of the borrower 
                                                that there is an error 
                                                regarding the account 
                                                of the borrower.

                                    ``(II) Correspondence delivered to 
                                other addresses.--
                                            ``(aa) In general.--A 
                                        written correspondence of a 
                                        borrower is a qualified written 
                                        request if the written 
                                        correspondence is transmitted 
                                        to and received by a 
                                        postsecondary educational 
                                        lender or servicer at a mailing 
                                        address, facsimile number, 
                                        email address, or website 
                                        address other than the address 
                                        or number designated by that 
                                        postsecondary educational 
                                        lender or servicer to receive 
                                        communications from borrowers 
                                        but the written correspondence 
                                        meets the requirements under 
                                        items (aa) and (bb) of 
                                        subclause (I).
                                            ``(bb) Duty to transfer.--A 
                                        postsecondary educational 
                                        lender or servicer shall, 
                                        within a reasonable period of 
                                        time, transfer a written 
                                        correspondence of a borrower 
                                        received by the postsecondary 
                                        educational lender or servicer 
                                        at a mailing address, facsimile 
                                        number, email address, or 
                                        website address other than the 
                                        address or number designated by 
                                        that postsecondary educational 
                                        lender or servicer to receive 
                                        communications from borrowers 
                                        to the correct address or 
                                        appropriate office or other 
                                        unit of the postsecondary 
                                        educational lender or servicer.
                                            ``(cc) Date of receipt.--A 
                                        written correspondence of a 
                                        borrower transferred in 
                                        accordance with item (bb) shall 
                                        be deemed to be received by the 
                                        postsecondary educational 
                                        lender or servicer on the date 
                                        on which the written 
                                        correspondence is transferred 
                                        to the correct address or 
                                        appropriate office or other 
                                        unit of the postsecondary 
                                        educational lender or servicer.
                            ``(iv) Servicing.--The term `servicing' 
                        means 1 or more of the following:
                                    ``(I) Receiving any scheduled 
                                periodic payments from a borrower or 
                                notification of such payments pursuant 
                                to the terms of a postsecondary 
                                education loan or contract governing 
                                the servicing.
                                    ``(II) Applying payments to the 
                                borrower's account pursuant to the 
                                terms of the postsecondary education 
                                loan or the contract governing the 
                                servicing.
                                    ``(III) Maintaining account records 
                                for a postsecondary education loan.
                                    ``(IV) Communicating with a 
                                borrower regarding a postsecondary 
                                education loan on behalf of the 
                                postsecondary educational lender or 
                                servicer.
                                    ``(V) Interactions with a borrower, 
                                including activities to help prevent 
                                default on obligations arising from 
                                postsecondary education loans, 
                                conducted to facilitate the activities 
                                described in subclause (I) or (II) on 
                                behalf of the postsecondary educational 
                                lender or servicer.
                    ``(B) Sale, transfer, or assignment.--If the sale, 
                other transfer, assignment, or transfer of servicing 
                obligations of a postsecondary education loan results 
                in a change in the identity of the party to whom the 
                borrower must send subsequent payments or direct any 
                communications concerning the loan--
                            ``(i) the transferor shall--
                                    ``(I) notify the borrower, in 
                                writing, in simple and understandable 
                                terms, not fewer than 45 days before 
                                transferring a legally enforceable 
                                right to receive payment from the 
                                borrower on such loan, of--
                                            ``(aa) the sale or other 
                                        transfer, assignment, or 
                                        transfer of servicing 
                                        obligations;
                                            ``(bb) the identity of the 
                                        transferee;
                                            ``(cc) the name and address 
                                        of the party to whom subsequent 
                                        payments or communications must 
                                        be sent;
                                            ``(dd) the telephone 
                                        numbers, email address, and 
                                        websites of both the transferor 
                                        and the transferee;
                                            ``(ee) the effective date 
                                        of the sale, transfer, or 
                                        assignment;
                                            ``(ff) the date on which 
                                        the transferor will stop 
                                        accepting payment; and
                                            ``(gg) the date on which 
                                        the transferee will begin 
                                        accepting payment; and
                                    ``(II) forward any payment from a 
                                borrower with respect to such 
                                postsecondary education loan to the 
                                transferee, immediately upon receiving 
                                such payment, during the 60-day period 
                                beginning on the date on which the 
                                transferor stops accepting payment of 
                                such postsecondary education loan; and
                                    ``(III) provide to the transferee 
                                all borrower information and complete 
                                payment history information for any 
                                such postsecondary education loan, 
                                including--
                                            ``(aa) an identification of 
                                        the repayment plan under which 
                                        payments were made;
                                            ``(bb) the number of months 
                                        qualifying toward a loan 
                                        forgiveness program and 
                                        identifying such program;
                                            ``(cc) the date of 
                                        enrollment into any income-
                                        driven repayment plan under 
                                        section 455 or 493C of the 
                                        Higher Education Act of 1965 
                                        (20 U.S.C. 1087e and 1098e);
                                            ``(dd) the dates of any 
                                        forbearance or deferment; and
                                            ``(ee) any application for 
                                        administrative relief submitted 
                                        to the transferor; and
                            ``(ii) the transferee shall--
                                    ``(I) notify the borrower, in 
                                writing, in simple and understandable 
                                terms, not fewer than 45 days before 
                                acquiring a legally enforceable right 
                                to receive payment from the borrower on 
                                such loan, of--
                                            ``(aa) the sale or other 
                                        transfer, assignment, or 
                                        transfer of servicing 
                                        obligations;
                                            ``(bb) the identity of the 
                                        transferor:
                                            ``(cc) the name and address 
                                        of the party to whom subsequent 
                                        payments or communications must 
                                        be sent;
                                            ``(dd) the telephone 
                                        numbers, email address, and 
                                        websites of both the transferor 
                                        and the transferee;
                                            ``(ee) the effective date 
                                        of the sale, transfer, 
                                        assignment, or transfer of 
                                        servicing obligations;
                                            ``(ff) the date on which 
                                        the transferor will stop 
                                        accepting payment; and
                                            ``(gg) the date on which 
                                        the transferee will begin 
                                        accepting payment;
                                    ``(II) accept as on-time and may 
                                not impose any late fee or finance 
                                charge for any payment from a borrower 
                                with respect to such postsecondary 
                                education loan that is forwarded from 
                                the transferor during the 90-day period 
                                beginning on the date on which the 
                                transferor stops accepting payment, if 
                                the transferor receives such payment on 
                                or before the applicable due date, 
                                including any grace period;
                                    ``(III) provide borrowers a simple, 
                                online process for transferring 
                                existing electronic fund transfer 
                                authority; and
                                    ``(IV) honor any promotion or 
                                benefit available or granted to the 
                                borrower or advertised by the previous 
                                owner or transferor of such 
                                postsecondary education loan.
                    ``(C) Material change in mailing address or 
                procedure for handling payments.--
                            ``(i) In general.--If a postsecondary 
                        educational lender or servicer makes a change 
                        in the mailing address, office, or procedures 
                        for handling payments with respect to any 
                        postsecondary education loan, the postsecondary 
                        educational lender or servicer shall notify the 
                        borrower in writing and through the borrower's 
                        preferred or designated method of communication 
                        not less than 45 calendar days in advance of 
                        such change.
                            ``(ii) Borrower protection window.--If a 
                        change described in clause (i) causes a delay 
                        in the crediting of the account of the borrower 
                        made during the 90-day period following the 
                        date on which such change took effect, the 
                        postsecondary educational lender or servicer 
                        may not impose on the borrower any negative 
                        consequences, including negative credit 
                        reporting, lost eligibility in borrower 
                        benefits, late fees, interest capitalization, 
                        or other financial injury.
                    ``(D) Interest rate and term changes for certain 
                postsecondary education loans.--
                            ``(i) Notification requirements.--
                                    ``(I) In general.--Except as 
                                provided in clause (iii), a 
                                postsecondary educational lender or 
                                servicer shall provide written notice, 
                                in a clear and conspicuous manner, to a 
                                borrower of any material change in the 
                                terms of the postsecondary education 
                                loan, including an increase in the 
                                interest rate, not later than 45 days 
                                before the effective date of the change 
                                or increase.
                                    ``(II) Material changes in terms.--
                                The Director shall, by regulation, 
                                establish guidelines for determining 
                                which changes in terms are material 
                                under subclause (I).
                            ``(ii) Limits on interest rate and fee 
                        increases applicable to outstanding balance.--
                        Except as provided in clause (iii), a 
                        postsecondary educational lender or servicer 
                        may not increase the interest rate or other fee 
                        applicable to an outstanding balance on a 
                        postsecondary education loan.
                            ``(iii) Exceptions.--The requirements under 
                        clauses (i) and (ii) shall not apply to--
                                    ``(I) an increase based on an 
                                applicable variable interest rate 
                                incorporated in the terms of a 
                                postsecondary education loan that 
                                provides for changes in the interest 
                                rate according to operation of an index 
                                that is not under the control of the 
                                postsecondary educational lender or 
                                servicer and is published for viewing 
                                by the general public;
                                    ``(II) an increase in interest rate 
                                due to the completion of a workout or 
                                temporary hardship arrangement by the 
                                borrower or the failure of the borrower 
                                to comply with the terms of a workout 
                                or temporary hardship arrangement if--
                                            ``(aa) the interest rate 
                                        applicable to a category of 
                                        transactions following any such 
                                        increase does not exceed the 
                                        rate or fee that applied to 
                                        that category of transactions 
                                        prior to commencement of the 
                                        arrangement; and
                                            ``(bb) the postsecondary 
                                        educational lender or servicer 
                                        has provided the borrower, 
                                        prior to the commencement of 
                                        such arrangement, with clear 
                                        and conspicuous disclosure of 
                                        the terms of the arrangement 
                                        (including any increases due to 
                                        such completion or failure); 
                                        and
                                    ``(III) an increase in interest 
                                rate due to a provision included within 
                                the terms of a postsecondary education 
                                loan that provides for a lower interest 
                                rate based on the borrower's agreement 
                                to a prearranged plan that authorizes 
                                recurring electronic funds transfers 
                                if--
                                            ``(aa) the borrower 
                                        withdraws the borrower's 
                                        authorization of the 
                                        prearranged recurring 
                                        electronic funds transfer plan; 
                                        and
                                            ``(bb) after withdrawal of 
                                        the borrower's authorization 
                                        and prior to increasing the 
                                        interest rate, the 
                                        postsecondary educational 
                                        lender or servicer has provided 
                                        the borrower with clear and 
                                        conspicuous disclosure of the 
                                        impending change in borrower's 
                                        interest rate and a reasonable 
                                        opportunity to reauthorize the 
                                        prearranged electronic funds 
                                        transfers plan.
                    ``(E) Payment information.--
                            ``(i) Statement required with each billing 
                        cycle.--A postsecondary educational lender or 
                        servicer for each borrower's account that is 
                        being serviced by the postsecondary educational 
                        lender or servicer and that includes a 
                        postsecondary education loan shall transmit to 
                        the borrower, for each billing cycle during 
                        which there is an outstanding balance in that 
                        account, a clearly and conspicuously written 
                        statement that includes--
                                    ``(I) the interest rate, principal 
                                balance, minimum monthly payment, and 
                                payment due date for each loan;
                                    ``(II) the outstanding balance in 
                                the account and each loan at the 
                                beginning of the billing cycle;
                                    ``(III) the total amount credited 
                                to the account and each loan during the 
                                billing cycle;
                                    ``(IV) the total amount of unpaid 
                                interest for the account and each loan;
                                    ``(V) the amount of any fee added 
                                to the account during the billing 
                                cycle, itemized to show each individual 
                                fee amount and reason for each fee;
                                    ``(VI) the address and phone number 
                                of the postsecondary educational lender 
                                or servicer to which the borrower may 
                                direct billing inquiries;
                                    ``(VII) the amount of any payments 
                                or other credits during the billing 
                                cycle that was applied respectively to 
                                the principal and to interest for each 
                                loan;
                                    ``(VIII) the manner, pursuant to 
                                subparagraph (G), in which payments 
                                will be allocated among multiple loans 
                                if the borrower does not provide 
                                specific payment instructions;
                                    ``(IX) whether each loan is in 
                                deferment or forbearance;
                                    ``(X) information on how to file a 
                                complaint with the Bureau and with the 
                                ombudsman designated pursuant to 
                                section 1035 of the Consumer Financial 
                                Protection Act of 2010 (12 U.S.C. 5535) 
                                and the Department of Education;
                                    ``(XI) for any borrower considered 
                                to be at-risk, as described in 
                                subparagraph (J)(i), a statement that a 
                                repayment specialist office or unit 
                                designated under subparagraph (J) is 
                                available to answer inquiries related 
                                to alternative repayment options, 
                                including the toll-free telephone 
                                number and email address to contact the 
                                specialist pursuant to subparagraph 
                                (J)(iii); and
                                    ``(XII) any other information 
                                determined appropriate by the Director 
                                through regulations promulgated, based 
                                on consumer testing and in accordance 
                                with paragraph (17)(A).
                            ``(ii) Disclosure of payment deadlines.--In 
                        the case of a postsecondary education loan 
                        account under which a late fee or charge may be 
                        imposed due to the failure of the borrower to 
                        make payment on or before the due date for such 
                        payment, the billing statement required under 
                        clause (i) with respect to the account shall 
                        include, in a conspicuous location on the 
                        billing statement and in clear and plain 
                        language, the date on which the payment is due 
                        or, if different, the date on which a late fee 
                        will be charged, together with the amount of 
                        the late fee to be imposed if payment is made 
                        after that date.
                    ``(F) Application of payments.--
                            ``(i) Apply payment on date received.--
                        Unless otherwise directed by the borrower, a 
                        postsecondary educational lender or servicer 
                        shall apply payments to a borrower's account on 
                        the date the payment is received.
                            ``(ii) Promulgation of rules.--The 
                        Director, in accordance with paragraph (17)(A), 
                        may promulgate rules for the application of 
                        postsecondary education loan payments that--
                                    ``(I) implements the requirements 
                                in this section;
                                    ``(II) minimizes the amount of fees 
                                and interest incurred by the borrower 
                                and the total loan amount paid by the 
                                borrower;
                                    ``(III) minimizes delinquencies, 
                                assignments to collection, and charge-
                                offs;
                                    ``(IV) requires postsecondary 
                                educational lenders or servicers to 
                                apply payments on the date received; 
                                and
                                    ``(V) allows the borrower to 
                                instruct the postsecondary educational 
                                lender or servicer to apply payments in 
                                a manner preferred by the borrower.
                            ``(iii) Method that best benefits 
                        borrower.--In promulgating the rules under 
                        clause (ii), the Director shall choose the 
                        allocation method that best benefits the 
                        borrower and is compatible with existing 
                        repayment options.
                    ``(G) Allocation of payments among multiple 
                loans.--
                            ``(i) Allocation of underpayments.--Unless 
                        otherwise directed by the borrower, upon 
                        receipt of a payment that does not satisfy the 
                        full amount due for each postsecondary 
                        education loan, the postsecondary educational 
                        lender or servicer shall allocate amounts in a 
                        manner that minimizes negative consequences, 
                        including negative credit reporting and late 
                        fees, and, where multiple loans share an equal 
                        stage of delinquency, the postsecondary 
                        educational lender or servicer shall first 
                        allocate payment to the postsecondary education 
                        loan with the smallest monthly payment, and 
                        then, after satisfying that monthly payment, to 
                        each successive loan bearing the next highest 
                        monthly payment, until the payment is 
                        exhausted. A borrower may instruct or expressly 
                        authorize a postsecondary educational lender or 
                        servicer to allocate payments in a different 
                        manner.
                            ``(ii) Allocation of excess amounts.--
                        Unless otherwise directed by the borrower, upon 
                        receipt of a payment exceeding the total amount 
                        due among all the borrower's postsecondary 
                        education loans, the postsecondary educational 
                        lender or servicer shall satisfy the amounts 
                        due for each loan, and then allocate amounts in 
                        excess of the minimum payment amount first to 
                        the postsecondary education loan balance 
                        bearing the highest annual percentage rate, and 
                        then, once that loan is repaid, to each 
                        successive postsecondary education loan bearing 
                        the next highest annual percentage rate, until 
                        the payment is exhausted. A borrower may 
                        instruct or expressly authorize a postsecondary 
                        educational lender or servicer to allocate such 
                        excess payments in a different manner.
                            ``(iii) Allocation of exact payments.--
                        Unless otherwise directed by the borrower upon 
                        receipt of a payment that exactly satisfies the 
                        monthly payments for each loan, the 
                        postsecondary educational lender or servicer 
                        shall allocate payments to satisfy each monthly 
                        payment.
                            ``(iv) Promulgation of rules.--The 
                        Director, in accordance with paragraph (17)(A), 
                        may promulgate rules for the allocation of 
                        payments among multiple postsecondary education 
                        loans that--
                                    ``(I) implements the requirements 
                                in this section;
                                    ``(II) minimizes the amount of fees 
                                and interest incurred by the borrower 
                                and the total loan amount paid by the 
                                borrower;
                                    ``(III) minimizes delinquencies, 
                                assignments to collection, and charge-
                                offs;
                                    ``(IV) requires postsecondary 
                                educational lenders or servicers to 
                                apply payments on the date received; 
                                and
                                    ``(V) allows the borrower to 
                                instruct postsecondary educational 
                                lenders or servicers to apply payments 
                                in a manner preferred by the borrower, 
                                including excess payments.
                            ``(v) Method that best benefits borrower.--
                        In promulgating the rules under clause (iv), 
                        the Director shall choose the allocation method 
                        that best benefits the borrower and is 
                        compatible with existing repayment options.
                    ``(H) Late fees.--
                            ``(i) In general.--A late fee may not be 
                        charged to a borrower for a postsecondary 
                        education loan under any of the following 
                        circumstances, either individually or in 
                        combination:
                                    ``(I) On a per-loan basis when a 
                                borrower has multiple postsecondary 
                                education loans.
                                    ``(II) In an amount greater than 4 
                                percent of the amount of the payment 
                                past due.
                                    ``(III) Before the end of the 15-
                                day period beginning on the date the 
                                payment is due.
                                    ``(IV) More than once with respect 
                                to a single late payment.
                                    ``(V) The borrower fails to make a 
                                singular, non-successive regularly-
                                scheduled payment on the postsecondary 
                                education loan.
                            ``(ii) Coordination with subsequent late 
                        fees.--No late fee may be charged to a borrower 
                        for a postsecondary education loan relating to 
                        an insufficient payment if the payment is made 
                        on or before the due date of the payment, or 
                        within any applicable grace period for the 
                        payment, if the insufficiency is attributable 
                        only to a late fee relating to an earlier 
                        payment, and the payment is otherwise a full 
                        payment for the applicable period.
                            ``(iii) Payments at local branches.--If the 
                        loan holder, in the case of a postsecondary 
                        education loan account referred to in 
                        subparagraph (A), is a financial institution 
                        that maintains a branch or office at which 
                        payments on any such account are accepted from 
                        the borrower in person, the date on which the 
                        borrower makes a payment on the account at such 
                        branch or office shall be considered to be the 
                        date on which the payment is made for purposes 
                        of determining whether a late fee may be 
                        imposed due to the failure of the borrower to 
                        make payment on or before the due date for such 
                        payment.
                    ``(I) Borrower inquiries.--
                            ``(i) Duty of postsecondary educational 
                        lenders or servicers to respond to borrower 
                        inquiries.--
                                    ``(I) Notice of receipt of 
                                request.--If a borrower submits a 
                                qualified written request to the 
                                postsecondary educational lender or 
                                servicer for information relating to 
                                the servicing of the postsecondary 
                                education loan, the postsecondary 
                                educational lender or servicer shall 
                                provide a written response 
                                acknowledging receipt of the qualified 
                                written request within 5 business days 
                                unless any action requested by the 
                                borrower is taken within such period.
                                    ``(II) Action with respect to 
                                inquiry.--Not later than 30 business 
                                days after the receipt from a borrower 
                                of a qualified written request under 
                                subclause (I) and, if applicable, 
                                before taking any action with respect 
                                to the qualified written request of the 
                                borrower, the postsecondary educational 
                                lender or servicer shall--
                                            ``(aa) make appropriate 
                                        corrections in the account of 
                                        the borrower, including the 
                                        crediting of any late fees, and 
                                        transmit to the borrower a 
                                        written notification of such 
                                        correction (which shall include 
                                        the name and toll-free or 
                                        collect-call telephone number 
                                        and email address of a 
                                        representative of the 
                                        postsecondary educational 
                                        lender or servicer who can 
                                        provide assistance to the 
                                        borrower);
                                            ``(bb) after conducting an 
                                        investigation, provide the 
                                        borrower with a written 
                                        explanation or clarification 
                                        that includes--

                                                    ``(AA) to the 
                                                extent applicable, a 
                                                statement of the 
                                                reasons for which the 
                                                postsecondary 
                                                educational lender or 
                                                servicer believes the 
                                                account of the borrower 
                                                is correct as 
                                                determined by the 
                                                postsecondary 
                                                educational lender or 
                                                servicer; and

                                                    ``(BB) the name and 
                                                toll-free or collect-
                                                call telephone number 
                                                and email address of an 
                                                individual employed by, 
                                                or the office or 
                                                department of, the 
                                                postsecondary 
                                                educational lender or 
                                                servicer who can 
                                                provide assistance to 
                                                the borrower; or

                                            ``(cc) after conducting an 
                                        investigation, provide the 
                                        borrower with a written 
                                        explanation or clarification 
                                        that includes--

                                                    ``(AA) information 
                                                requested by the 
                                                borrower or explanation 
                                                of why the information 
                                                requested is 
                                                unavailable or cannot 
                                                be obtained by the 
                                                postsecondary 
                                                educational lender or 
                                                servicer; and

                                                    ``(BB) the name and 
                                                toll-free or collect-
                                                call telephone number 
                                                and email address of an 
                                                individual employed by, 
                                                or the office or 
                                                department of, the 
                                                postsecondary 
                                                educational lender or 
                                                servicer who can 
                                                provide assistance to 
                                                the borrower.

                                    ``(III) Limited extension of 
                                response time.--
                                            ``(aa) In general.--There 
                                        may be 1 extension of the 30-
                                        day period described in 
                                        subclause (II) of not more than 
                                        15 days if, before the end of 
                                        such 30-day period, the 
                                        postsecondary educational 
                                        lender or servicer notifies the 
                                        borrower of the extension and 
                                        the reasons for the delay in 
                                        responding.
                                            ``(bb) Reports to bureau.--
                                        Each postsecondary educational 
                                        lender or servicer shall, on an 
                                        annual basis, report to the 
                                        Bureau the aggregate number of 
                                        extensions sought by the such 
                                        postsecondary educational 
                                        lender or servicer under item 
                                        (aa).
                            ``(ii) Protection against negative 
                        consequences.--During the 60-day period 
                        beginning on the date on which a postsecondary 
                        educational lender or servicer receives a 
                        qualified written request from a borrower 
                        relating to a dispute regarding payments by the 
                        borrower, a postsecondary educational lender or 
                        servicer may not impose any negative 
                        consequences on the borrower relating to the 
                        subject of the qualified written request or to 
                        such period, including--
                                    ``(I) engaging in debt collection 
                                efforts, including under chapter 37 of 
                                title 31, United States Code;
                                    ``(II) providing negative credit 
                                information to any consumer reporting 
                                agency (as defined in section 603 of 
                                the Fair Credit Reporting Act (15 
                                U.S.C. 1681a));
                                    ``(III) lost eligibility for a 
                                borrower benefit;
                                    ``(IV) late fees;
                                    ``(V) interest capitalization; or
                                    ``(VI) other financial injury.
                    ``(J) Repayment specialists for at-risk 
                borrowers.--
                            ``(i) At-risk borrowers.--A postsecondary 
                        educational lender or servicer shall designate 
                        an office or other unit to act as a repayment 
                        specialist regarding postsecondary education 
                        loans for--
                                    ``(I) any borrower who--
                                            ``(aa) becomes 30 calendar 
                                        days or more delinquent under 
                                        the postsecondary education 
                                        loan; or
                                            ``(bb) notifies the 
                                        postsecondary educational 
                                        lender or servicer pursuant to 
                                        paragraph (8)(C) that the 
                                        borrower is having difficulty 
                                        making payment;
                                    ``(II) any borrower who requests 
                                information related to options to 
                                reduce or suspend the borrower's 
                                monthly payment, or otherwise indicates 
                                that the borrower is experiencing or is 
                                about to experience financial hardship 
                                or distress;
                                    ``(III) any borrower who has not 
                                completed the program of study for 
                                which the borrower received the loans;
                                    ``(IV) any borrower who is enrolled 
                                in discretionary forbearance for more 
                                than 9 of the previous 12 months;
                                    ``(V) any borrower who has 
                                rehabilitated or consolidated 1 or more 
                                postsecondary education loans out of 
                                default within the prior 24 months;
                                    ``(VI) a borrower who seeks 
                                information regarding, seeks to enter 
                                an agreement for, or seeks to resolve 
                                an issue under a repayment option that 
                                requires subsequent submission of 
                                supporting documentation;
                                    ``(VII) a borrower who seeks to 
                                modify the terms of the repayment of 
                                the postsecondary education loan 
                                because of hardship; and
                                    ``(VIII) any borrower or segment of 
                                borrowers determined by the Director or 
                                the Secretary to be at-risk.
                            ``(ii) Training.--Staff of the repayment 
                        specialist office or unit designated under 
                        clause (i) shall--
                                    ``(I) receive rigorous, ongoing 
                                training related to available repayment 
                                plans, loan forgiveness, and 
                                cancellation and discharge options; and
                                    ``(II) be trained to--
                                            ``(aa) assess the 
                                        borrower's long-term and short-
                                        term financial situation in 
                                        discussing alternative 
                                        repayment options with 
                                        borrowers;
                                            ``(bb) inform borrowers, 
                                        when there is sufficient 
                                        information to determine that a 
                                        borrower may be eligible, about 
                                        closed-school discharge, 
                                        discharge under defense to 
                                        repayment, or total and 
                                        permanent disability discharge 
                                        prior to informing the borrower 
                                        about any other options for 
                                        repayment; and
                                            ``(cc) inform borrowers 
                                        about alternative repayment 
                                        options, prior to discussing 
                                        forbearance and deferment.
                            ``(iii) Toll-free telephone number and 
                        email address.--Each postsecondary educational 
                        lender or servicer shall maintain--
                                    ``(I) a toll-free telephone number 
                                that shall--
                                            ``(aa) connect directly to 
                                        the repayment specialist office 
                                        or unit designated under clause 
                                        (i);
                                            ``(bb) be made available on 
                                        the primary internet website of 
                                        the postsecondary educational 
                                        lender or servicer, on monthly 
                                        billing statements, and any 
                                        disclosures required by 
                                        paragraph (6); and
                                            ``(cc) not subject 
                                        borrowers to unreasonable call 
                                        wait times; and
                                    ``(II) an email address that 
                                shall--
                                            ``(aa) connect directly to 
                                        the repayment specialist office 
                                        or unit designated under clause 
                                        (i);
                                            ``(bb) be made available on 
                                        the primary internet website of 
                                        the postsecondary educational 
                                        lender or servicer, on monthly 
                                        billing statements, and any 
                                        disclosures required by 
                                        paragraph (6); and
                                            ``(cc) be monitored on a 
                                        regular basis.
                            ``(iv) Compensation.--Staff of the 
                        repayment specialist office or unit designated 
                        under clause (i) shall not be compensated on 
                        the basis of the volume of calls or accounts 
                        handled, dollar amounts collected, brevity of 
                        calls, or in any other manner that may 
                        encourage undue haste and lack of diligence or 
                        quality customer service.
                    ``(K) Servicemembers, veterans, and postsecondary 
                education loans.--
                            ``(i) Servicemember and veterans liaison.--
                        Each postsecondary educational lender or 
                        servicer shall designate an employee to act as 
                        the servicemember and veterans liaison who is 
                        responsible for answering inquiries from 
                        servicemembers, veterans, and their immediate 
                        family members, and is specially trained on 
                        servicemember and veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. 3901 
                        et seq.) and other Federal or State laws 
                        related to postsecondary education loans.
                            ``(ii) Toll-free telephone number and email 
                        address.--Each postsecondary educational lender 
                        or servicer shall maintain--
                                    ``(I) a toll-free telephone number 
                                that shall--
                                            ``(aa) connect directly to 
                                        the servicemember and veterans 
                                        liaison designated under clause 
                                        (i);
                                            ``(bb) be made available on 
                                        the primary internet website of 
                                        postsecondary educational 
                                        lender or servicer and on 
                                        monthly billing statements; and
                                            ``(cc) not subject 
                                        borrowers to unreasonable call 
                                        wait times; and
                                    ``(II) an email address that 
                                shall--
                                            ``(aa) connect directly to 
                                        the servicemember and veterans 
                                        liaison designated under clause 
                                        (i);
                                            ``(bb) be made available on 
                                        the primary internet website of 
                                        the postsecondary educational 
                                        lender or servicer and on 
                                        monthly billing statements; and
                                            ``(cc) be monitored on a 
                                        regular basis.
                            ``(iii) Prohibition on charge offs and 
                        default.--A postsecondary educational lender or 
                        servicer may not charge off or report a 
                        postsecondary education loan as delinquent, 
                        assigned to collection (internally or by 
                        referral to a third party), in default, or 
                        charged-off to a credit reporting agency if the 
                        borrower is on active duty in the Armed Forces 
                        (as defined in section 101(d)(1) of title 10, 
                        United States Code) serving in a combat zone 
                        (as designated by the President under section 
                        112(c) of the Internal Revenue Code of 1986).
                            ``(iv) Additional liaisons.--The Director, 
                        in consultation with the Secretary, shall 
                        determine additional entities with whom 
                        borrowers interact, including guaranty 
                        agencies, that shall designate an employee to 
                        act as the servicemember and veterans liaison 
                        who is responsible for answering inquiries from 
                        servicemembers, veterans, and their immediate 
                        family members, and is specially trained on 
                        servicemembers and veteran benefits and option 
                        under the Servicemembers Civil Relief Act (50 
                        U.S.C. 3901 et seq.).
                    ``(L) Borrower's loan history.--
                            ``(i) In general.--A postsecondary 
                        educational lender or servicer shall make 
                        available in a secure electronic form usable by 
                        borrowers, or in writing upon request, the loan 
                        history of each borrower for each postsecondary 
                        education loan, separately designating--
                                    ``(I) history of information on the 
                                loan before any consolidation or 
                                transfer of such loan;
                                    ``(II) payment history, including 
                                repayment plan and payments--
                                            ``(aa) made on such loan to 
                                        previous postsecondary 
                                        educational lenders or 
                                        servicers; and
                                            ``(bb) qualifying toward a 
                                        loan forgiveness program and 
                                        designating such program;
                                    ``(III) loan history, including any 
                                forbearances, deferrals, delinquencies, 
                                assignment to collection, and charge 
                                offs;
                                    ``(IV) annual percentage rate 
                                history;
                                    ``(V) key loan terms, including 
                                application of payments to interest, 
                                principal, and fees, origination date, 
                                principal, capitalized interest, annual 
                                percentage rate, including any cap, 
                                loan term, and any contractual 
                                incentives;
                                    ``(VI) amount due to pay off the 
                                outstanding balance; and
                                    ``(VII) any other items determined 
                                by the Director through regulations 
                                promulgated in accordance with 
                                paragraph (17)(A).
                            ``(ii) Original documentation.--A 
                        postsecondary educational lender or servicer 
                        shall make available to the borrower, if 
                        requested, at no charge, copies of the original 
                        loan documents and the promissory note for each 
                        postsecondary education loan.
                    ``(M) Error resolution.--The Director, in 
                consultation with the Secretary, shall promulgate rules 
                requiring postsecondary educational lenders or 
                servicers to establish error resolution procedures to 
                allow borrowers to inquire about errors related to 
                their postsecondary education loans and obtain timely 
                resolution of such errors.
                    ``(N) Additional servicing standards.--
                            ``(i) Prohibitions.--A postsecondary 
                        educational lender or servicer may not--
                                    ``(I) charge a fee for responding 
                                to a qualified written request under 
                                this paragraph;
                                    ``(II) fail to take timely action 
                                to respond to a qualified written 
                                request from a borrower to correct an 
                                error relating to an allocation of 
                                payment or the payoff amount of the 
                                postsecondary education loan;
                                    ``(III) fail to take reasonable 
                                steps to avail the borrower of all 
                                possible alternative repayment 
                                arrangements to avoid default;
                                    ``(IV) fail to perform the 
                                obligations required under title IV of 
                                the Higher Education Act of 1965 (20 
                                U.S.C. 1070 et seq.);
                                    ``(V) fail to respond within 10 
                                business days to a request from a 
                                borrower to provide the name, address, 
                                and other relevant contact information 
                                of the loan holder of the borrower's 
                                postsecondary education loan or, for a 
                                Federal Direct Loan or a Federal 
                                Perkins Loan, the Secretary of 
                                Education, or the institution of higher 
                                education who made the loan, 
                                respectively;
                                    ``(VI) fail to comply with any 
                                applicable requirement of the 
                                Servicemembers Civil Relief Act (50 
                                U.S.C. 3901 et seq.);
                                    ``(VII) charge a convenience, 
                                processing, or any other fee for 
                                payments made electronically or by 
                                telephone;
                                    ``(VIII) fail to comply with any 
                                other obligation that the Bureau, by 
                                regulation, has determined to be 
                                appropriate to carry out the consumer 
                                protection purposes of this paragraph;
                                    ``(IX) fail to perform other 
                                standard servicing duties and 
                                functions; or
                                    ``(X) engage in any unfair, 
                                deceptive, or abusive acts or 
                                practices, as those terms are described 
                                in section 1031 of the Consumer 
                                Financial Protection Act of 2010 (12 
                                U.S.C. 5531).
                            ``(ii) Business hours.--Postsecondary 
                        educational lenders or servicers shall be open 
                        for borrower inquiries and outreach during and 
                        after normal business hours, including 
                        availability after 5:00 pm in all continental 
                        United States time zones and some weekend 
                        hours.
                            ``(iii) Additional standards.--The Director 
                        may promulgate regulations, in accordance with 
                        paragraph (17)(A), establishing additional 
                        servicing standards to reduce delinquencies, 
                        assignment to collections, defaults, and 
                        charge-offs, and to ensure borrowers understand 
                        their rights and obligations related to their 
                        postsecondary education loans.
                    ``(O) Prohibition on limiting borrower legal action 
                by postsecondary educational lenders and servicers.--
                            ``(i) Waiver of rights and remedies.--
                        Notwithstanding chapter 1 of title 9, United 
                        States Code (commonly known as the `Federal 
                        Arbitration Act'), any rights and remedies 
                        available to borrowers against postsecondary 
                        educational lenders or servicers may not be 
                        waived by any agreement, policy, or form, 
                        including by a mandatory predispute arbitration 
                        agreement or class action waiver.
                            ``(ii) Predispute arbitration agreements.--
                        Notwithstanding chapter 1 of title 9, United 
                        States Code (commonly known as the `Federal 
                        Arbitration Act'), no limitation or restriction 
                        on the ability of a borrower to pursue a claim 
                        in court with respect to a postsecondary 
                        education loan, including mandatory predispute 
                        arbitration agreements and class action 
                        waivers, shall be valid or enforceable by a 
                        postsecondary educational lender or servicer, 
                        including as a third-party beneficiary or by 
                        estoppel.
                    ``(P) Preemption.--Nothing in this paragraph may be 
                construed to preempt any provision of State law 
                regarding postsecondary education loans where the State 
                law provides stronger consumer protections.
                    ``(Q) Civil liability.--A postsecondary educational 
                lender or servicer that fails to comply with any 
                requirement imposed under this paragraph shall be 
                deemed a creditor that has failed to comply with a 
                requirement under this chapter for purposes of 
                liability under section 130 and such postsecondary 
                educational lender or servicer shall be subject to the 
                liability provisions under such section, including the 
                provisions under paragraphs (1), (2)(A)(i), (2)(B), and 
                (3) of section 130(a).
                    ``(R) Eligibility for discharge.--The Director, in 
                accordance with paragraph (17)(A), shall promulgate 
                rules requiring postsecondary educational lenders and 
                servicers to--
                            ``(i) identify and contact borrowers who 
                        may be eligible for--
                                    ``(I) student loan discharge by the 
                                Secretary, including under section 437 
                                of the Higher Education Act of 1965 (20 
                                U.S.C. 1087); and
                                    ``(II) special and time-limited 
                                discharge opportunities, including 
                                borrowers who may become eligible for 
                                such discharge upon taking one or more 
                                actions; and
                            ``(ii) provide the borrower, in writing, in 
                        simple and understandable terms, complete and 
                        accurate information about obtaining such 
                        discharge, including any action that must be 
                        taken in order to become eligible for 
                        discharge; and
                            ``(iii) provide the information described 
                        under clause (ii) to any borrower of the 
                        postsecondary educational lender or servicer 
                        who contacts the lender or servicer and 
                        inquires about loan affordability or discharge 
                        opportunities.
                    ``(S) Forbearance upon request.--A postsecondary 
                educational lender or servicer shall grant a borrower 
                forbearance on a private education loan, renewable at 
                12-month intervals, if--
                            ``(i) the borrower requests forbearance; 
                        and
                            ``(ii) the borrower is described in any of 
                        subclauses (I) through (IV) of section 
                        428(c)(3)(A)(i) of the Higher Education Act of 
                        1965 (20 U.S.C. 1078(c)(3)(A)(i)).
            ``(17) Consumer financial protection bureau requirements.--
                    ``(A) Rulemaking.--The Director shall, based on 
                consumer testing (as appropriate) and upon 
                consideration of any final recommendations published by 
                the Secretary under section 456(f)(3) of the Higher 
                Education Act of 1965 (20 U.S.C. 1087f(g)(3)), 
                promulgate regulations in consultation with the 
                Secretary, to carry out the requirements of this 
                subsection.
                    ``(B) Compliance for certain entities.--
                            ``(i) In general.--The Director may 
                        promulgate regulations under subparagraph (A) 
                        to require an entity or class of entities with 
                        which the Secretary has entered into a contract 
                        under section 456 of the Higher Education Act 
                        of 1965 (20 U.S.C. 1087f) to comply with an 
                        alternative requirement or standard promulgated 
                        by the Director in lieu of compliance with any 
                        requirement or standard under this subsection 
                        if the Director determines that--
                                    ``(I) such entity or class of 
                                entities are not required by the 
                                Secretary pursuant to the contract to 
                                perform a servicing function governed 
                                by the requirement or standard, and 
                                where such function is required by the 
                                Secretary, to be performed by another 
                                entity or class of entities; or
                                    ``(II) the Secretary, in 
                                consultation with the Chief Operating 
                                Officer of Federal Student Aid, has 
                                promulgated regulations to establish an 
                                alternative requirement or standard 
                                with respect to such entity or class of 
                                entities that better benefits or 
                                protects borrowers and the Director 
                                incorporates such requirement or 
                                standard that better benefits or 
                                protects borrowers into regulations 
                                promulgated under subparagraph (A).
                            ``(ii) Reports.--The Director shall report 
                        to the Committee on Banking, Housing, and Urban 
                        Affairs of the Senate, the Committee on Health, 
                        Education, Labor, and Pensions of the Senate, 
                        the Committee on Financial Services of the 
                        House of Representatives, and the Committee on 
                        Education and the Workforce of the House of 
                        Representatives on any regulations promulgated 
                        under clause (i).
            ``(18) Postsecondary educational lenders or servicers and 
        contracts or subcontracts.--
                    ``(A) In general.--Any person or entity that enters 
                into a contract or subcontract with a postsecondary 
                educational lender or servicer to perform the servicing 
                of a postsecondary educational loan may fulfill the 
                obligations of the postsecondary educational lender or 
                servicer under this subsection.
                    ``(B) Joint and several liability for service 
                providers.--Any entity or person described in 
                subparagraph (A) shall be jointly and severally liable 
                for the actions of the entity or person in fulfilling 
                the obligations of the postsecondary educational lender 
                or servicer under this subsection.''; and
                    (B) by adding at the end the following:
    ``(g) Information To Be Available at No Charge.--The information 
required to be disclosed under this section shall be made available at 
no charge to the borrower.''; and
            (2) in section 130(a)--
                    (A) in paragraph (3), by striking ``128(e)(7)'' and 
                inserting ``128(e)(11)''; and
                    (B) in the flush matter at the end, by striking 
                ``or paragraph (4)(C), (6), (7), or (8) of section 
                128(e),'' and inserting ``or paragraph (4)(C), (10), 
                (11), or (12) of section 128(e),''.
    (b) Effective Date.--
            (1) In general.--The amendments made under subsection (a) 
        shall be effective 180 days after the date of enactment of this 
        Act.
            (2) Delay.--The Director of the Bureau of Consumer 
        Financial Protection shall delay the effective date of the 
        amendments made under subsection (a) for not more than 1 
        additional year with respect to entities engaged in servicing 
        pursuant to a contract awarded under section 456 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087f) pending the Secretary 
        of Education's final recommendations required under section 
        456(f) of such Act related to the promulgation of regulations 
        by the Director under section 128(e)(17) of the Truth in 
        Lending Act (15 U.S.C. 1638(e)(17)).

SEC. 4. REHABILITATION OF PRIVATE EDUCATION LOANS.

    Section 623(a)(1)(E) of the Fair Credit Reporting Act (15 U.S.C. 
1681s-2(a)(1)(E)) is amended to read as follows:
                    ``(E) Rehabilitation of private education loans.--
                            ``(i) In general.--If a borrower of a 
                        private education loan rehabilitates such loan 
                        in accordance with section 128(e)(23) of the 
                        Truth in Lending Act (15 U.S.C. 1638(e)(23)), 
                        the private educational lender or entity 
                        engaged in servicing such loan shall request 
                        that any consumer reporting agency to which the 
                        charge-off was reported remove the delinquency 
                        that led to the charge-off and the charge-off 
                        from the borrower's credit history.
                            ``(ii) Banking agencies.--
                                    ``(I) In general.--If a private 
                                educational lender is supervised by a 
                                Federal banking agency, the private 
                                educational lender shall seek written 
                                approval from the Federal banking 
                                agency that the terms and conditions of 
                                the loan rehabilitation program of the 
                                lender meet the requirements of section 
                                128(e)(23) of the Truth in Lending Act 
                                (15 U.S.C. 1638(e)(23)).
                                    ``(II) Feedback.--An appropriate 
                                Federal banking agency shall provide 
                                feedback to a private educational 
                                lender within 120 days of a request for 
                                approval under subclause (I).
                            ``(iii) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) the term `appropriate Federal 
                                banking agency' has the meaning given 
                                the term in section 3 of the Federal 
                                Deposit Insurance Act (12 U.S.C. 1813); 
                                and
                                    ``(II) the term `private education 
                                loan' has the meaning given the term in 
                                section 140(a) of the Truth in Lending 
                                Act (15 U.S.C. 1650(a)).''.

SEC. 5. IMPROVED CONSUMER PROTECTIONS FOR PRIVATE EDUCATION LOANS.

    Section 128(e) of the Truth in Lending Act (15 U.S.C. 1638(e)), as 
amended by section 3, is further amended--
            (1) by adding at the end the following:
            ``(19) Discharge of private education loans in the event of 
        death or disability of the borrower.--Each private education 
        loan shall include terms that provide that the liability to 
        repay the loan shall be cancelled--
                    ``(A) upon the death of the borrower;
                    ``(B) if the borrower becomes permanently and 
                totally disabled, as determined under section 437(a)(1) 
                of the Higher Education Act of 1965 (20 U.S.C. 
                1087(a)(1)) and the regulations promulgated by the 
                Secretary under that section; or
                    ``(C) if the Secretary of Veterans Affairs or the 
                Secretary of Defense determines that the borrower is 
                unemployable due to a service-connected condition or 
                disability, in accordance with the requirements of 
                section 437(a)(2) of such Act and the regulations 
                promulgated by the Secretary under that section.
            ``(20) Terms for co-borrowers.--Each private education loan 
        shall include terms that clearly define the requirements to 
        release a co-borrower from the obligation.
            ``(21) Prohibition of acceleration of payments on private 
        education loans.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a private education loan executed 
                after the date of enactment of this paragraph may not 
                include a provision that permits the private 
                educational lender, loan holder, or entity engaged in 
                servicing such loan to accelerate, in whole or in part, 
                payments on the private education loan.
                    ``(B) Acceleration caused by a payment default.--A 
                private education loan may include a provision that 
                permits acceleration of the loan in cases of payment 
                default.
            ``(22) Prohibition on denial of credit due to eligibility 
        for protection under servicemembers civil relief act.--A 
        private educational lender may not deny or refuse credit to an 
        individual who is entitled to any right or protection provided 
        under the Servicemembers Civil Relief Act (50 U.S.C. 3901 et 
        seq.) or subject, solely by reason of such entitlement, such 
        individual to any other action described in paragraphs (1) 
        through (6) of section 108 of such Act.
            ``(23) Rehabilitation of private education loans.--
                    ``(A) In general.--If a borrower of a private 
                education loan successfully and voluntarily makes 9 
                payments within 20 days of the due date during 10 
                consecutive months of amounts owed on the private 
                education loan, or otherwise brings the private 
                education loan current after the loan is charged-off, 
                the loan shall be considered rehabilitated, and the 
                lender or entity engaged in servicing such loan shall 
                request that any consumer reporting agency to which the 
                charge-off was reported remove the delinquency that led 
                to the charge-off and the charge-off from the 
                borrower's credit history.
                    ``(B) Terms.--No private educational lender shall 
                offer a borrower rehabilitation of loans where the 
                payment required to rehabilitate a defaulted private 
                education loan is less than the monthly payment amount 
                required upon completion of rehabilitation.'';
            (2) in paragraph (1)--
                    (A) by striking subparagraph (D) and inserting the 
                following:
                    ``(D) requirements for a co-borrower, including--
                            ``(i) any changes in the applicable 
                        interest rates without a co-borrower; and
                            ``(ii) any conditions the borrower is 
                        required meet in order to release a co-borrower 
                        from the private education loan obligation;'';
                    (B) by redesignating subparagraphs (O), (P), (Q), 
                and (R) as subparagraphs (P), (Q), (R), and (S), 
                respectively; and
                    (C) by inserting after subparagraph (N) the 
                following:
                    ``(O) in the case of a refinancing of education 
                loans that include a Federal student loan made, 
                insured, or guaranteed under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.)--
                            ``(i) a list containing each loan to be 
                        refinanced, which shall identify whether the 
                        loan is--
                                    ``(I) a private education loan;
                                    ``(II) a Federal student loan made, 
                                insured, or guaranteed under title IV 
                                of the Higher Education Act of 1965 (20 
                                U.S.C. 1070 et seq.); or
                                    ``(III) a loan made, insured, or 
                                guaranteed under title VII or title 
                                VIII of the Public Health Service Act 
                                (42 U.S.C. 292 et seq. and 296 et 
                                seq.); and
                            ``(ii) benefits that the borrower may be 
                        forfeiting, including income-driven repayment 
                        options, opportunities for loan forgiveness, 
                        forbearance or deferment options, interest 
                        subsidies, and tax benefits;''; and
            (3) in paragraph (2)--
                    (A) by redesignating subparagraphs (O) and (P) as 
                subparagraphs (P) and (Q), respectively; and
                    (B) by inserting after subparagraph (N) the 
                following:
                    ``(O) in the case of a refinancing of education 
                loans that include a Federal student loan made, 
                insured, or guaranteed under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.)--
                            ``(i) a list containing each loan to be 
                        refinanced, which shall identify whether the 
                        loan is--
                                    ``(I) a private education loan;
                                    ``(II) a Federal student loan made, 
                                insured, or guaranteed under title IV 
                                of the Higher Education Act of 1965 (20 
                                U.S.C. 1070 et seq.); or
                                    ``(III) a loan made, insured, or 
                                guaranteed under title VII or title 
                                VIII of the Public Health Service Act 
                                (42 U.S.C. 292 et seq. and 296 et 
                                seq.); and
                            ``(ii) benefits that the borrower may be 
                        forfeiting, including income-driven repayment 
                        options, opportunities for loan forgiveness, 
                        forbearance or deferment options, interest 
                        subsidies, and tax benefits;''.

SEC. 6. KNOW BEFORE YOU OWE.

    (a) Amendments to the Truth in Lending Act.--
            (1) In general.--Section 128(e) of the Truth in Lending Act 
        (15 U.S.C. 1638(e)), as amended by sections 3 and 5, is further 
        amended--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) Institutional certification required.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), before a creditor may issue any funds 
                with respect to an extension of credit described in 
                this subsection, the creditor shall obtain from the 
                relevant covered educational institution where such 
                loan is to be used for a student, such institution's 
                certification of--
                            ``(i) the enrollment status of the student;
                            ``(ii) the student's cost of attendance at 
                        the institution as determined by the 
                        institution under part F of title IV of the 
                        Higher Education Act of 1965 (20 U.S.C. 1087kk 
                        et seq.); and
                            ``(iii) the difference between--
                                    ``(I) such cost of attendance; and
                                    ``(II) the student's estimated 
                                financial assistance, including such 
                                assistance received under title IV of 
                                the Higher Education Act of 1965 (20 
                                U.S.C. 1070 et seq.) (except for 
                                Federal Direct PLUS Loans made on 
                                behalf of the student) and other 
                                financial assistance known to the 
                                institution, as applicable (except for 
                                loans made under the Public Health 
                                Service Act (42 U.S.C. 201 et seq.)).
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                a creditor may issue funds, not to exceed the amount 
                described in subparagraph (A)(iii), with respect to an 
                extension of credit described in this subsection 
                without obtaining from the relevant covered educational 
                institution such institution's certification if such 
                institution fails to provide within 15 business days of 
                the creditor's request for such certification--
                            ``(i) notification of the institution's 
                        refusal to certify the request; or
                            ``(ii) notification that the institution 
                        has received the request for certification and 
                        will need additional time to comply with the 
                        certification request.
                    ``(C) Loans disbursed without certification.--If a 
                creditor issues funds without obtaining a 
                certification, as described in subparagraph (B), such 
                creditor shall report the issuance of such funds in a 
                manner determined by the Director.''; and
                    (B) by adding at the end the following:
            ``(24) Provision of information.--
                    ``(A) Provision of information to students.--
                            ``(i) Loan statement.--A creditor that 
                        issues any funds with respect to an extension 
                        of credit described in this subsection shall 
                        send loan statements, where such loan is to be 
                        used for a student, to borrowers of such funds 
                        not less than once every 3 months during the 
                        time that such student is enrolled at a covered 
                        educational institution.
                            ``(ii) Contents of loan statement.--Each 
                        statement described in clause (i) shall--
                                    ``(I) report the borrower's total 
                                remaining debt to the creditor, 
                                including accrued but unpaid interest 
                                and capitalized interest;
                                    ``(II) report any debt increases 
                                since the last statement; and
                                    ``(III) list the current interest 
                                rate for each loan.
                    ``(B) Notification of loans disbursed without 
                certification.--On or before the date a creditor issues 
                any funds with respect to an extension of credit 
                described in this subsection, the creditor shall notify 
                the relevant covered educational institution, in 
                writing, of the amount of the extension of credit and 
                the student on whose behalf credit is extended. The 
                form of such written notification shall be subject to 
                the regulations of the Bureau of Consumer Financial 
                Protection.
                    ``(C) Annual report.--A creditor that issues funds 
                with respect to an extension of credit described in 
                this subsection shall prepare and submit an annual 
                report to the Bureau of Consumer Financial Protection 
                containing the required information about private 
                student loans to be determined by the Bureau of 
                Consumer Financial Protection, in consultation with the 
                Secretary.
            ``(25) Unlawful conduct.--An extension of credit described 
        in this subsection shall be void if made to a student to 
        attend--
                    ``(A) a covered educational institution that, at 
                the time of the execution of such extension of credit, 
                was not lawfully authorized to operate in the State in 
                which the student resided at the time; or
                    ``(B) a covered educational institution that 
                engaged in any unfair, deceptive, or abusive acts or 
                practices, as those terms are described in section 1031 
                of the Consumer Financial Protection Act of 2010 (12 
                U.S.C. 5531), related to the student's recruitment, 
                enrollment, instruction, job placement, or other 
                interactions with the covered educational institution 
                or its agents.''.
            (2) Definition of private education loan.--Section 
        140(a)(8) of the Truth in Lending Act (15 U.S.C. 1650(a)(8)) is 
        amended--
                    (A) in subparagraph (A)--
                            (i) by redesignating clause (ii) as clause 
                        (iii);
                            (ii) in clause (i), by striking ``and'' 
                        after the semicolon;
                            (iii) by adding after clause (i) the 
                        following:
                            ``(ii) is not made, insured, or guaranteed 
                        under title VII or title VIII of the Public 
                        Health Service Act (42 U.S.C. 292 et seq. and 
                        296 et seq.); and''; and
                            (iv) in clause (iii), as redesignated by 
                        clause (i), by striking ``regardless of'' and 
                        all that follows through ``educational lender'' 
                        and inserting the following: ``regardless of--
                                    ``(I) whether the loan is provided 
                                through the institution or provider of 
                                postsecondary education that the 
                                subject student attends or directly to 
                                the borrower from the private 
                                educational lender; or
                                    ``(II) whether some or all of the 
                                postsecondary education financed by the 
                                private education loan has already been 
                                provided;''; and
                    (B) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) does not include--
                            ``(i) an extension of credit under an open-
                        end consumer credit plan, unless such open-end 
                        credit is extended expressly for postsecondary 
                        education expenses;
                            ``(ii) a reverse mortgage transaction;
                            ``(iii) a residential mortgage transaction; 
                        or
                            ``(iv) any other loan that is secured by 
                        real property or a dwelling; and''.
            (3) Regulations.--Not later than 365 days after the date of 
        enactment of this Act, the Director of the Bureau of Consumer 
        Financial Protection shall issue regulations in final form to 
        implement paragraphs (3), (24), and (25) of section 128(e) of 
        the Truth in Lending Act (15 U.S.C. 1638(e)), as amended by 
        paragraph (1). Such regulations shall become effective not 
        later than 6 months after their date of issuance.
    (b) Amendments to the Higher Education Act of 1965.--
            (1) Program participation agreements.--Section 487(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1094(a)) is amended 
        by striking paragraph (28) and inserting the following:
            ``(28)(A) Upon the request of a private educational lender, 
        acting in connection with an application initiated by a 
        borrower for a private education loan in accordance with 
        section 128(e)(3) of the Truth in Lending Act (15 U.S.C. 
        1638(e)(3)), the institution shall within 15 days of receipt of 
        a certification request--
                    ``(i) provide such certification to such private 
                educational lender--
                            ``(I) that the student who initiated the 
                        application for the private education loan, or 
                        on whose behalf the application was initiated, 
                        is enrolled or is scheduled to enroll at the 
                        institution;
                            ``(II) of such student's cost of attendance 
                        at the institution as determined under part F 
                        of this title; and
                            ``(III) of the difference between--
                                    ``(aa) the cost of attendance at 
                                the institution; and
                                    ``(bb) the student's estimated 
                                financial assistance received under 
                                this title (except for Federal Direct 
                                PLUS Loans made on behalf of the 
                                student) and other assistance known to 
                                the institution, as applicable (except 
                                for loans made under the Public Health 
                                Service Act (42 U.S.C. 201 et seq.));
                    ``(ii) notify the creditor that the institution has 
                received the request for certification and will need 
                additional time to comply with the certification 
                request; or
                    ``(iii) provide notice to the private educational 
                lender of the institution's refusal to certify the 
                private education loan under subparagraph (D).
            ``(B) With respect to a certification request described in 
        subparagraph (A), and prior to providing such certification 
        under subparagraph (A)(i) or providing notice of the refusal to 
        provide certification under subparagraph (A)(iii), the 
        institution shall--
                    ``(i) determine whether the student who initiated 
                the application for the private education loan, or on 
                whose behalf the application was initiated, has applied 
                for and exhausted the Federal financial assistance 
                available to such student under this title and inform 
                the student accordingly; and
                    ``(ii) provide the borrower whose loan application 
                has prompted the certification request by a private 
                educational lender, as described in subparagraph 
                (A)(i), with the following information and disclosures:
                            ``(I) The availability of, and the 
                        borrower's potential eligibility for, Federal 
                        financial assistance under this title, 
                        including disclosing the terms, conditions, 
                        interest rates, and repayment options and 
                        programs of Federal student loans.
                            ``(II) The borrower's ability to select a 
                        private educational lender of the borrower's 
                        choice.
                            ``(III) The impact of a proposed private 
                        education loan on the borrower's potential 
                        eligibility for other financial assistance, 
                        including Federal financial assistance under 
                        this title.
                            ``(IV) The borrower's right to accept or 
                        reject a private education loan within the 30-
                        day period following a private educational 
                        lender's approval of a borrower's application 
                        and about a borrower's 3-day right to cancel 
                        period.
            ``(C) For purposes of this paragraph, the terms `private 
        educational lender' and `private education loan' have the 
        meanings given such terms in section 140 of the Truth in 
        Lending Act (15 U.S.C. 1650).
            ``(D)(i) An institution shall not provide a certification 
        with respect to a private education loan under this paragraph 
        unless the private education loan includes terms that provide--
                    ``(I) the borrower alternative repayment options, 
                including loan consolidation or refinancing; and
                    ``(II) for the discharge of the borrower and co-
                borrower's, if applicable, liability to repay the loan 
                pursuant to paragraphs (19) and (20) of section 128(e) 
                of the Truth in Lending Act (15 U.S.C. 1638(e)).
            ``(ii) In this paragraph, the term `disability' means a 
        permanent and total disability, as determined in accordance 
        with the regulations of the Secretary of Education, or a 
        determination by the Secretary of Veterans Affairs that the 
        borrower is unemployable due to a service connected-
        disability.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the effective date of the regulations 
        described in subsection (a)(3).
            (3) Preferred lender arrangement.--Section 151(8)(A)(ii) of 
        the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii)) is 
        amended by inserting ``certifying,'' after ``promoting,''.
    (c) Report.--
            (1) In general.--Not later than 24 months after the 
        issuance of regulations under subsection (a)(3), the Director 
        of the Bureau of Consumer Financial Protection and the 
        Secretary of Education shall jointly submit to Congress a 
        report on the compliance of--
                    (A) private educational lenders with section 
                128(e)(3) of the Truth in Lending Act (15 U.S.C. 
                1638(e)), as amended by subsection (a); and
                    (B) institutions of higher education with section 
                487(a)(28) of the Higher Education Act of 1965 (20 
                U.S.C. 1094(a)), as amended by subsection (b).
            (2) Contents.--The report under paragraph (1) shall include 
        information about the degree to which specific institutions 
        utilize certifications in effectively--
                    (A) encouraging the exhaustion of Federal student 
                loan eligibility by borrowers prior to taking on 
                private education loan debt; and
                    (B) lowering student private education loan debt by 
                borrowers.

SEC. 7. CENTRALIZED POINT OF ACCESS.

    Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1088 et seq.) is amended by adding at the end the following:

``SEC. 493E. CENTRALIZED POINT OF ACCESS.

    ``Not later than 2 years after the date of enactment of the Student 
Loan Borrower Bill of Rights, the Secretary shall establish a 
centralized point of access for all borrowers of loans that are made, 
insured, or guaranteed under this title that are in repayment, 
including a central location for account information and payment 
processing for such loan servicing, regardless of the specific entity 
engaged in servicing.''.

SEC. 8. EDUCATION LOAN OMBUDSMAN.

    Section 1035 of the Consumer Financial Protection Act of 2010 (12 
U.S.C. 5535) is amended--
            (1) in the section heading, by striking ``private'';
            (2) in subsection (a)--
                    (A) by striking ``a Private'' and inserting ``an''; 
                and
                    (B) by striking ``private'';
            (3) in subsection (b), by striking ``private education 
        student loan'' and inserting ``postsecondary education loan'';
            (4) in subsection (c)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``subsection'' and inserting ``section'';
                    (B) in paragraph (1), by striking ``private'';
                    (C) by striking paragraph (2) and inserting the 
                following:
            ``(2) coordinate with the unit of the Bureau established 
        under section 1013(b)(3), in order to monitor complaints by 
        borrowers and responses to those complaints by the Bureau or 
        other appropriate Federal or State agency;''; and
                    (D) in paragraph (3), by striking ``private'';
            (5) in subsection (d)--
                    (A) in paragraph (2)--
                            (i) by striking ``on the same day 
                        annually''; and
                            (ii) by inserting ``and be made available 
                        to the public'' after ``Representatives''; and
                    (B) by adding at the end the following:
            ``(3) Contents.--The report required under paragraph (1) 
        shall include information on the number, nature, and resolution 
        of complaints received, disaggregated by postsecondary 
        educational lender or servicer, region, State, and institution 
        of higher education.''; and
            (6) by striking subsection (e) and inserting the following:
    ``(e) Definitions.--In this section:
            ``(1) Borrower.--The term `borrower' means a borrower of a 
        postsecondary education loan.
            ``(2) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 140 of the Truth in Lending Act (15 U.S.C. 
        1650).
            ``(3) Postsecondary education loan.--The term 
        `postsecondary education loan' means--
                    ``(A) a private education loan, as defined in 
                section 140 of the Truth in Lending Act (15 U.S.C. 
                1650);
                    ``(B) a loan made, insured, or guaranteed under 
                part B, D, or E of title IV of the Higher Education Act 
                of 1965 (20 U.S.C. 1071 et seq., 1087a et seq., and 
                1087aa et seq.); or
                    ``(C) a loan made, insured, or guaranteed under 
                title VII or title VIII of the Public Health Service 
                Act (42 U.S.C. 292 et seq. and 296 et seq.).''.

SEC. 9. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE EDUCATIONAL 
              LENDERS.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Director of the Bureau of Consumer Financial 
Protection and the Secretary of Education, in consultation with the 
Commissioners of the Federal Trade Commission and the Attorney General 
of the United States, shall submit a report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate, the Committee on 
Health, Education, Labor, and Pensions of the Senate, the Committee on 
Financial Services of the House of Representatives, and the Committee 
on Education and the Workforce of the House of Representatives on 
private education loans (as that term is defined in section 140 of the 
Truth in Lending Act (15 U.S.C. 1650)) and private educational lenders 
(as that term is defined in such section).
    (b) Contents.--The report required by this section shall examine, 
at a minimum--
            (1) the growth and changes of the private education loan 
        market in the United States;
            (2) factors influencing such growth and changes;
            (3) the extent to which students and parents of students 
        rely on private education loans to finance postsecondary 
        education and the private education loan indebtedness of 
        borrowers;
            (4) the characteristics of private education loan 
        borrowers, including--
                    (A) the types of institutions of higher education 
                that they attend;
                    (B) socioeconomic characteristics (including income 
                and education levels, racial characteristics, 
                geographical background, age, and gender);
                    (C) what other forms of financing borrowers use to 
                pay for education;
                    (D) whether they exhaust their Federal loan options 
                before taking out a private education loan;
                    (E) whether such borrowers are dependent or 
                independent students (as determined under part F of 
                title IV of the Higher Education Act of 1965 (20 U.S.C. 
                1087kk et seq.)) or parents of such students;
                    (F) whether such borrowers are students enrolled in 
                a program leading to a certificate, license, or 
                credential other than a degree, an associate degree, a 
                baccalaureate degree, or a graduate or professional 
                degree; and
                    (G) if practicable, employment and repayment 
                behaviors;
            (5) the characteristics of private educational lenders, 
        including whether such creditors are for-profit, non-profit, or 
        institutions of higher education;
            (6) the underwriting criteria used by private educational 
        lenders, including the use of cohort default rate (as such term 
        is defined in section 435(m) of the Higher Education Act of 
        1965 (20 U.S.C. 1085(m));
            (7) the terms, conditions, and pricing of private education 
        loans;
            (8) the consumer protections available to private education 
        loan borrowers, including the effectiveness of existing 
        disclosures and requirements and borrowers' awareness and 
        understanding about terms and conditions of various financial 
        products;
            (9) whether Federal regulators and the public have access 
        to information sufficient to provide them with assurances that 
        private education loans are provided in accord with the 
        Nation's fair lending laws and that allows public officials to 
        determine lender compliance with fair lending laws; and
            (10) any statutory or legislative recommendations necessary 
        to improve consumer protections for private education loan 
        borrowers and to better enable Federal regulators and the 
        public to ascertain private educational lender compliance with 
        fair lending laws.

SEC. 10. REPORT ON POSTSECONDARY EDUCATION LOAN SERVICING.

    Not later than 1 year after the date of enactment of this Act, the 
Director of the Bureau of Consumer Financial Protection and the 
Secretary of Education shall submit a joint report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate, the Committee on 
Health, Education, Labor, and Pensions of the Senate, the Committee on 
Financial Services of the House of Representatives, and the Committee 
on Education and the Workforce of the House of Representatives on 
servicing of postsecondary education loans, including--
            (1) any legislative recommendations to improve servicing 
        standards; and
            (2) information on proactive early intervention methods by 
        postsecondary educational lenders or servicers to help 
        distressed postsecondary education loan borrowers enroll in any 
        eligible repayment plans.
                                 <all>
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