II 

116TH CONGRESS 

1ST SESSION S. 1354 

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

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 7, 2019 

Mr. DURBIN (for himself, Mr. REED, 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. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Loan Bor5 rower Bill of Rights’’. 

6 SEC. 2. HIGHER EDUCATION ACT OF 1965 AMENDMENTS. 

7 (a) STUDENT LOAN INFORMATION BY ELIGIBLE

8 LENDERS.—Section 433 of the Higher Education Act of 

9 1965 (20 U.S.C. 1083) is amended— 

10 (1) in subsection (b)— 


pamtmann on DSKBFK8HB2PROD with BILLS
2 

•S 1354 IS

1 (A) in paragraph (12), by striking ‘‘and’’ 

2 after the semicolon; 

3 (B) in paragraph (13), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

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

6 ‘‘(14) a statement that— 

7 ‘‘(A) the borrower may be entitled to serv8 icemember and veteran benefits under the 

9 Servicemembers Civil Relief Act (50 U.S.C. 

10 App. 501 et seq.) and other Federal or State 

11 laws; and 

12 ‘‘(B) a Servicemember and Veterans Liai13 son designated under section 128(e)(16)(K)(i) 

14 of the Truth in Lending Act (15 U.S.C. 

15 1638(e)(16)(K)(i)) is available to answer in16 quiries about servicemember and veteran bene17 fits, including the toll-free telephone number to 

18 contact the Liaison pursuant to such section.’’; 

19 and 

20 (2) in subsection (e)— 

21 (A) in paragraph (2), by adding at the end 

22 the following: 

23 ‘‘(D) A statement that— 

24 ‘‘(i) the borrower may be entitled to 

25 servicemember and veteran benefits under 


pamtmann on DSKBFK8HB2PROD with BILLS
3 

•S 1354 IS

1 the Servicemembers Civil Relief Act (50 

2 U.S.C. App. 501 et seq.) and other Fed3 eral or State laws; and 

4 ‘‘(ii) a Servicemember and Veterans 

5 Liaison designated under section 

6 128(e)(16)(K)(i) of the Truth in Lending 

7 Act (15 U.S.C. 1638(e)(16)(K)(i)) is avail8 able to answer inquiries about servicemem9 ber and veteran benefits, including the toll10 free telephone number to contact the Liai11 son pursuant to such section. 

12 ‘‘(E) A statement that a repayment spe13 cialist office or unit designated under section 

14 128(e)(16)(J)(i) of the Truth in Lending Act 

15 (15 U.S.C. 1638(e)(16)(J)(i)) is available to 

16 answer inquiries related to alternative repay17 ment options, including the toll-free telephone 

18 number to contact the specialist pursuant to 

19 section 128(e)(16)(J)(iii) of such Act.’’; and 

20 (B) in paragraph (3), by adding at the end 

21 the following: 

22 ‘‘(F) A statement that— 

23 ‘‘(i) the borrower may be entitled to 

24 servicemember and veteran benefits under 

25 the Servicemembers Civil Relief Act (50 


pamtmann on DSKBFK8HB2PROD with BILLS
4 

•S 1354 IS

1 U.S.C. App. 501 et seq.) and other Fed2 eral or State laws; and 

3 ‘‘(ii) a Servicemember and Veterans 

4 Liaison designated under section 

5 128(e)(16)(K)(i) of the Truth in Lending 

6 Act (15 U.S.C. 1638(e)(16)(K)(i)) is avail7 able to answer inquiries about servicemem8 ber and veteran benefits, including the toll9 free telephone number to contact the Liai10 son pursuant to such section. 

11 ‘‘(G) A statement that a repayment spe12 cialist office or unit designated under section 

13 128(e)(16)(J)(i) of the Truth in Lending Act 

14 (15 U.S.C. 1638(e)(16)(J)(i)) is available to 

15 answer inquiries related to alternative repay16 ment options, including the toll-free telephone 

17 number to contact the specialist pursuant to 

18 section 128(e)(16)(J)(iii) of such Act.’’. 

19 (b) TERMS AND CONDITIONS OF LOANS.—Section 

20 455 of the Higher Education Act of 1965 (20 U.S.C. 

21 1087e) is amended by adding at the end the following: 

22 ‘‘(r) PREPAYMENT AND PAYMENT APPLICATION.— 

23 ‘‘(1) IN GENERAL.—A borrower may prepay all 

24 or part of a loan made under this part at any time 

25 without penalty. 


pamtmann on DSKBFK8HB2PROD with BILLS
5 

•S 1354 IS

1 ‘‘(2) PREPAYMENT.— 

2 ‘‘(A) IN GENERAL.—If a borrower pays 

3 any amount in excess of the amount due for a 

4 loan made under this part, the excess amount 

5 shall be a prepayment. 

6 ‘‘(B) APPLICATION OF PREPAYMENT.—If a 

7 prepayment equals or exceeds the monthly re8 payment amount under the borrower’s repay9 ment plan with respect to a loan made under 

10 this part, the Secretary shall— 

11 ‘‘(i) apply the prepaid amount accord12 ing to the terms of the promissory note 

13 signed by the borrower; and 

14 ‘‘(ii) upon request of the borrower, ad15 vance the due date of the next payment 

16 and notify the borrower of any revised due 

17 date for the next payment.’’. 

18 (c) CONTRACTS.—Section 456 of the Higher Edu19 cation Act of 1965 (20 U.S.C. 1087f) is amended— 

20 (1) in subsection (a), by striking paragraph (3) 

21 and inserting the following: 

22 ‘‘(3) RULES OF CONSTRUCTION.— 

23 ‘‘(A) CONSORTIA.—Nothing in this section 

24 shall be construed as a limitation of the author25 ity of any State agency to enter into an agreeVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
6 

•S 1354 IS

1 ment for the purposes of this section as a mem2 ber of a consortium of State agencies. 

3 ‘‘(B) COMPLIANCE WITH STATE AND FED4 ERAL LAWS.—Nothing in this section shall be 

5 construed as altering, limiting, or affecting any 

6 obligation by an entity with which the Secretary 

7 enters into a contract under this section to 

8 comply with any applicable Federal or State 

9 law, including any Federal consumer financial 

10 law, as defined in section 1002(14) of the Con11 sumer Financial Protection Act of 2010 (12 

12 U.S.C. 5481(14)). 

13 ‘‘(C) AUTHORITIES.—Nothing in this sec14 tion shall be construed as altering, limiting, or 

15 affecting the authority of a State attorney gen16 eral or any other State regulatory or enforce17 ment agency or authority to bring an action or 

18 other regulatory proceeding arising solely under 

19 the law of such State.’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(d) APPLICABILITY OF PROVISIONS UNDER THE

22 CONSUMER FINANCIAL PROTECTION ACT OF 2010.— 

23 ‘‘(1) CONSUMER FINANCIAL PRODUCT OR SERV24 ICE.—A consumer financial product or service of25 fered by an entity with which the Secretary enters 


pamtmann on DSKBFK8HB2PROD with BILLS
7 

•S 1354 IS

1 into a contract under this section for origination, 

2 servicing, or collection described in subsection (b), as 

3 part of such contract, shall have the meaning given 

4 the term in section 1002 of the Consumer Financial 

5 Protection Act of 2010 (12 U.S.C. 5481). 

6 ‘‘(2) COVERED PERSON.—Any entity with which 

7 the Secretary enters into a contract under this sec8 tion for origination, servicing, or collection described 

9 in subsection (b) shall be considered a ‘covered per10 son’ (as defined in section 1002 of the Consumer Fi11 nancial Protection Act of 2010 (12 U.S.C. 5481)) 

12 and subject to the provisions of the Consumer Fi13 nancial Protection Act of 2010 (12 U.S.C. 5481 et 

14 seq.). 

15 ‘‘(3) POSTSECONDARY EDUCATIONAL LENDER

16 OR SERVICER.—Any entity with which the Secretary 

17 enters into a contract under this section for origina18 tion, servicing, or collection, as described in sub19 section (b), and is engaged in the provision of, or of20 fering, servicing shall be considered a ‘postsecondary 

21 educational lender or servicer’ (as defined in section 

22 128(e) of the Truth in Lending Act (15 U.S.C. 

23 1638(e))), and subject to the provisions of section 

24 128(e) of the Truth in Lending Act (12 U.S.C. 

25 1638(e)). 


pamtmann on DSKBFK8HB2PROD with BILLS
8 

•S 1354 IS

1 ‘‘(e) COMPLAINTS FROM STUDENT LOAN BOR2 ROWERS.—In awarding any contract under this section for 

3 origination, servicing, or collection described in subsection 

4 (b), the Secretary shall require, as part of such contract, 

5 any entity receiving such an award— 

6 ‘‘(1) to respond to consumer complaints sub7 mitted to any Federal, State, or local agency that 

8 accepts complaints from student loan borrowers, in9 cluding the Bureau of Consumer Financial Protec10 tion, by borrowers who owe loans made under this 

11 part; and 

12 ‘‘(2) to share information about consumer com13 plaints with the Secretary, the Bureau of Consumer 

14 Financial Protection, the Federal Trade Commis15 sion, the Department of Veterans Affairs, any State 

16 attorney general, or any other Federal or State reg17 ulatory or enforcement agency that compiles infor18 mation about such complaints. 

19 ‘‘(f) LIMITATIONS ON CONTRACTS.—Any entity with 

20 which the Secretary enters into a contract under this sec21 tion shall be prohibited, as part of such contract, from 

22 marketing to the borrower of a loan made, insured, or 

23 guaranteed under this title a financial product or serv24 ice— 


pamtmann on DSKBFK8HB2PROD with BILLS
9 

•S 1354 IS

1 ‘‘(1) using data obtained as a result of the con2 tract or the relationship with the borrower stemming 

3 from the contract; 

4 ‘‘(2) during any outreach or contact with the 

5 borrower resulting from the contract or the relation6 ship with the borrower stemming from the contract; 

7 or 

8 ‘‘(3) on any platform or through any method 

9 resulting from the contract or the relationship with 

10 the borrower stemming from the contract. 

11 ‘‘(g) STUDENT LOAN SERVICING INTERAGENCY

12 WORKING GROUP.— 

13 ‘‘(1) IN GENERAL.—Not later than 30 days 

14 after the date of enactment of the Student Loan 

15 Borrower Bill of Rights, the Secretary shall establish 

16 a student loan servicing interagency working group 

17 co-chaired by the Secretary and the Director of the 

18 Bureau of Consumer Financial Protection and in19 cluding the Chief Operating Officer of the Office of 

20 Federal Student Aid, the Director of the Office of 

21 Management and Budget, the Secretary of the 

22 Treasury, and the heads of any other relevant Fed23 eral departments or agencies. 

24 ‘‘(2) ADVISORY REPORT ON RULEMAKING.— 


pamtmann on DSKBFK8HB2PROD with BILLS
10 

•S 1354 IS

1 ‘‘(A) IN GENERAL.—Not later than 120 

2 days after the date the working group under 

3 paragraph (1) is established, the working group 

4 shall publish an advisory report making rec5 ommendations to the Director of the Bureau of 

6 Consumer Financial Protection related to the 

7 promulgation of regulations under section 

8 128(e)(17)(A) of the Truth in Lending Act (15 

9 U.S.C. 1638(e)(17)(A)) with respect to entities 

10 with which the Secretary has entered into a 

11 contract under this section. 

12 ‘‘(B) PUBLIC FEEDBACK.—Following the 

13 publication of the advisory report required 

14 under subparagraph (A), the Secretary shall ac15 cept, for not less than 60 days, from the public 

16 specific feedback on the recommendations in17 cluded in the report. 

18 ‘‘(3) PUBLICATION OF FINAL RECOMMENDA19 TIONS.—Not later than 30 days following the con20 clusion of the public feedback process described in 

21 paragraph (2)(B), the Secretary shall publish final 

22 recommendations for the Director of the Bureau of 

23 Consumer Financial Protection related to the pro24 mulgation of regulations under section 


pamtmann on DSKBFK8HB2PROD with BILLS
11 

•S 1354 IS

1 128(e)(17)(A) of the Truth in Lending Act (15 

2 U.S.C. 1638(e)(17)(A)). 

3 ‘‘(4) POLICY DIRECTION TO FEDERAL STUDENT

4 AID.—The working group shall develop policy direc5 tion for the Office of Federal Student Aid to incor6 porate, into contracts awarded under this section, 

7 applicable requirements and standards promulgated 

8 under section 128(e)(17)(A) of the Truth in Lending 

9 Act (15 U.S.C. 1638(e)(17)(A)) or described in sec10 tion 128(e)(17)(B)(i)(II) of such Act. 

11 ‘‘(5) MEETINGS.—After the Secretary publishes 

12 final recommendations under paragraph (3), the 

13 working group shall meet not less often than once 

14 per year including to— 

15 ‘‘(A) evaluate the application of regulations 

16 promulgated under section 128(e)(17)(A) of the 

17 Truth in Lending Act (15 U.S.C. 

18 1638(e)(17)(A)) on entities with which the Sec19 retary has entered into a contract under this 

20 section; 

21 ‘‘(B) evaluate the Office of Federal Stu22 dent Aid’s implementation of policy direction 

23 developed pursuant to paragraph (4); 

24 ‘‘(C) develop and implement an oversight 

25 plan to ensure compliance by entities with 


pamtmann on DSKBFK8HB2PROD with BILLS
12 

•S 1354 IS

1 which the Secretary has entered into a contract 

2 under this section with policy direction devel3 oped under paragraph (4) and regulations pro4 mulgated under section 128(e)(17)(A) of the 

5 Truth in Lending Act (15 U.S.C. 

6 1638(e)(17)(A)) or described in section 

7 128(e)(17)(B)(i)(II) of such Act; and 

8 ‘‘(D) undertake other activities to improve 

9 coordination among the members of the work10 ing group as it relates to the Secretary’s admin11 istration of the Federal Direct Loan Program. 

12 ‘‘(6) RULE OF CONSTRUCTION.—Nothing in 

13 this subsection shall be considered to alter, limit, or 

14 restrict the Bureau of Consumer Financial Protec15 tion’s obligations under chapter 5 of title 5, United 

16 States Code (commonly known as the ‘Administra17 tive Procedures Act’), including the Director’s obli18 gation to provide notice, solicit public comment, and 

19 respond to such comment when issuing regula20 tions.’’. 

21 SEC. 3. TRUTH IN LENDING ACT AMENDMENTS. 

22 (a) IN GENERAL.—The Truth in Lending Act (15 

23 U.S.C. 1601 et seq.) is amended— 

24 (1) in section 128 (15 U.S.C. 1638)— 

25 (A) in subsection (e)— 


pamtmann on DSKBFK8HB2PROD with BILLS
13 

•S 1354 IS

1 (i) in the subsection heading, by strik2 ing ‘‘PRIVATE’’; 

3 (ii) in paragraph (1)(O), by striking 

4 ‘‘paragraph (6)’’ and inserting ‘‘paragraph 

5 (10)’’; 

6 (iii) in paragraph (2)(L), by striking 

7 ‘‘paragraph (6)’’ and inserting ‘‘paragraph 

8 (10)’’; 

9 (iv) in paragraph (4)(C), by striking 

10 ‘‘paragraph (7)’’ and inserting ‘‘paragraph 

11 (11)’’; 

12 (v) by redesignating paragraphs (5) 

13 through (11) as paragraphs (9) through 

14 (15), respectively; 

15 (vi) by inserting after paragraph (4) 

16 the following: 

17 ‘‘(5) DISCLOSURES BEFORE FIRST FULLY AM18 ORTIZED PAYMENT.—Not fewer than 30 days and 

19 not more than 150 days before the first fully amor20 tized payment on a postsecondary education loan is 

21 due from the borrower, the postsecondary edu22 cational lender or servicer shall disclose to the bor23 rower, clearly and conspicuously— 

24 ‘‘(A) the information described in— 


pamtmann on DSKBFK8HB2PROD with BILLS
14 

•S 1354 IS

1 ‘‘(i) paragraph (2)(A) (adjusted, as 

2 necessary, for the rate of interest in effect 

3 on the date the first fully amortized pay4 ment on a postsecondary education loan is 

5 due); 

6 ‘‘(ii) subparagraphs (B) through (G) 

7 of paragraph (2); 

8 ‘‘(iii) paragraph (2)(H) (adjusted, as 

9 necessary, for the rate of interest in effect 

10 on the date the first fully amortized pay11 ment on a postsecondary education loan is 

12 due); 

13 ‘‘(iv) paragraph (2)(K); and 

14 ‘‘(v) subparagraphs (O) and (P) of 

15 paragraph (2); 

16 ‘‘(B) the scheduled date upon which the 

17 first fully amortized payment is due; 

18 ‘‘(C) the name of the postsecondary edu19 cational lender and servicer, and the address to 

20 which communications and payments should be 

21 sent including a telephone number and website 

22 where the borrower may obtain additional infor23 mation; 

24 ‘‘(D) a description of alternative repay25 ment options, including Federal Direct ConsoliVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
15 

•S 1354 IS

1 dation Loans under part D of title IV of the 

2 Higher Education Act of 1965 (20 U.S.C. 

3 1087a et seq.), as applicable, and servicemem4 ber or veteran benefits under the 

5 Servicemembers Civil Relief Act (50 U.S.C. 

6 App. 501 et seq.) or other Federal or State law 

7 related to postsecondary education loans; and 

8 ‘‘(E) a statement that a Servicemember 

9 and Veterans Liaison designated under para10 graph (16)(K) is available to answer inquiries 

11 about servicemember and veteran benefits re12 lated to postsecondary education loans, includ13 ing the toll-free telephone number to contact 

14 the Liaison pursuant to paragraph (16)(K). 

15 ‘‘(6) DISCLOSURES WHEN BORROWER IS AT

16 RISK.— 

17 ‘‘(A) IN GENERAL.—Not more than 5 days 

18 after a postsecondary educational lender or 

19 servicer determines that a borrower meets the 

20 criteria established in paragraph (16)(J)(i), the 

21 postsecondary educational lender or servicer 

22 shall disclose to the borrower, in writing, clearly 

23 and conspicuously that a repayment specialist 

24 office or unit is available to discuss alternative 

25 repayment options and answer borrower inquirVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
16 

•S 1354 IS

1 ies related to their postsecondary educational 

2 loan, including the toll-free number to contact 

3 the office or unit pursuant to paragraph 

4 (16)(J)(iii). 

5 ‘‘(B) OUTREACH TO AT-RISK BOR6 ROWERS.—The Director, in accordance with 

7 paragraph (17)(A), shall promulgate rules to 

8 establish a timeline for additional live outreach 

9 by the repayment specialist office or unit to at10 risk borrowers. 

11 ‘‘(7) ACTIONS WHEN BORROWER IS 30 DAYS DE12 LINQUENT.— 

13 ‘‘(A) IN GENERAL.—Not more than 5 days 

14 after a borrower becomes 30 days delinquent on 

15 a postsecondary education loan, the repayment 

16 specialist office or unit designated under para17 graph (16)(J) shall— 

18 ‘‘(i) make a good faith effort to estab19 lish live contact with the borrower to dis20 cuss alternative repayment options and 

21 other options available to avoid default; 

22 and 

23 ‘‘(ii) disclose to the borrower, in writ24 ing, clearly and conspicuously— 


pamtmann on DSKBFK8HB2PROD with BILLS
17 

•S 1354 IS

1 ‘‘(I) the minimum payment that 

2 the borrower must make to bring the 

3 loan current; 

4 ‘‘(II) a statement, related to po5 tential charge off (as defined in para6 graph (16)(A)) or assignment to col7 lections as appropriate, to include— 

8 ‘‘(aa) the date on which the 

9 loan will be charged off or as10 signed to collections if no pay11 ment or the minimum payment 

12 required to be disclosed pursuant 

13 to item (bb) is not made; 

14 ‘‘(bb) the minimum payment 

15 that must be made to avoid the 

16 loan being charged off or as17 signed to collection; and 

18 ‘‘(cc) the consequences to 

19 the borrower of charge off or as20 signment to collections; 

21 ‘‘(III) a statement that a Service22 member and Veterans Liaison des23 ignated under paragraph (16)(K) is 

24 available to answer inquiries about 

25 servicemember and veteran benefits 


pamtmann on DSKBFK8HB2PROD with BILLS
18 

•S 1354 IS

1 related to postsecondary education 

2 loans, including the toll-free telephone 

3 number to contact the Liaison pursu4 ant to paragraph (16)(K); and 

5 ‘‘(IV) a statement that a repay6 ment specialist office or unit des7 ignated under paragraph (16)(J) is 

8 available to answer inquiries related to 

9 alternative repayment options, includ10 ing the toll-free telephone number to 

11 contact the specialist pursuant to 

12 paragraph (16)(J)(iii). 

13 ‘‘(B) MODIFICATIONS.—The disclosures 

14 described in subparagraph (A)(ii) may be modi15 fied subject to regulations promulgated by the 

16 Director, based on consumer testing and in ac17 cordance with paragraph (17)(A). 

18 ‘‘(8) ACTIONS WHEN BORROWER IS HAVING

19 DIFFICULTY MAKING PAYMENT OR IS 60 DAYS DE20 LINQUENT.— 

21 ‘‘(A) IN GENERAL.—Not more than 5 days 

22 after a borrower notifies a postsecondary edu23 cational lender or servicer that the borrower is 

24 having difficulty making payment or a borrower 

25 becomes 60 days delinquent on a postsecondary 


pamtmann on DSKBFK8HB2PROD with BILLS
19 

•S 1354 IS

1 education loan, the repayment specialist office 

2 or unit designated under paragraph (16)(J) 

3 shall— 

4 ‘‘(i) complete a full review of the bor5 rower’s postsecondary education loan and 

6 make a reasonable effort to obtain the in7 formation necessary to determine— 

8 ‘‘(I) if the borrower is eligible for 

9 an alternative repayment option, in10 cluding Federal Direct Consolidation 

11 Loans under part D of title IV of the 

12 Higher Education Act of 1965 (20 

13 U.S.C. 1087a et seq.), as applicable; 

14 ‘‘(II) if the borrower is eligible 

15 for servicemember or veteran benefits 

16 under the Servicemembers Civil Relief 

17 Act (50 U.S.C. App. 501 et seq.) or 

18 other Federal or State law related to 

19 postsecondary education loans; and 

20 ‘‘(III) if the postsecondary edu21 cation loan is eligible for discharge by 

22 the Secretary; 

23 ‘‘(ii) make a good faith effort to es24 tablish live contact with the borrower to 

25 provide the borrower information about alVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
20 

•S 1354 IS

1 ternative repayment options and benefits 

2 for which the borrower is eligible, including 

3 all terms, conditions, and fees or costs as4 sociated with such repayment plan, pursu5 ant to paragraph (9)(D); 

6 ‘‘(iii) provide to the borrower in writ7 ing, in simple and understandable terms, 

8 such information required by clause (ii); 

9 ‘‘(iv) allow the borrower not less than 

10 30 days to apply for an alternative repay11 ment option or benefits, if eligible; 

12 ‘‘(v) notify the borrower that a Serv13 icemember and Veterans Liaison des14 ignated under paragraph (16)(K) is avail15 able to answer inquiries about servicemem16 ber and veteran benefits related to postsec17 ondary education loans, including the toll18 free telephone number to contact the Liai19 son pursuant to paragraph (16)(K); and 

20 ‘‘(vi) notify the borrower that a repay21 ment specialist office or unit designated 

22 under paragraph (16)(J) is available to an23 swer inquiries related to alternative repay24 ment options, including the toll-free teleVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
21 

•S 1354 IS

1 phone number to contact the specialist 

2 pursuant to paragraph (16)(J)(iii). 

3 ‘‘(B) FORBEARANCE OR DEFERMENT.—If, 

4 after receiving information about alternative re5 payment options from the repayment specialist, 

6 a borrower notifies the postsecondary edu7 cational lender or servicer that a long-term al8 ternative repayment option is not appropriate, 

9 the postsecondary educational lender or servicer 

10 may comply with this paragraph by providing 

11 the borrower, in writing, in simple and under12 standable terms, information about short-term 

13 options to address an anticipated short-term 

14 difficulty in making payments, such as forbear15 ance or deferment options, including all terms, 

16 conditions, and fees or costs associated with 

17 such options pursuant to paragraph (9)(D). 

18 ‘‘(C) NOTIFICATION PROCESS.— 

19 ‘‘(i) IN GENERAL.—Each postsec20 ondary educational lender or servicer shall 

21 establish a process, in accordance with 

22 subparagraph (A), for a borrower to notify 

23 the lender that— 


pamtmann on DSKBFK8HB2PROD with BILLS
22 

•S 1354 IS

1 ‘‘(I) the borrower is having dif2 ficulty making payments on a postsec3 ondary education loan; and 

4 ‘‘(II) a long-term alternative re5 payment option is not appropriate. 

6 ‘‘(ii) CONSUMER FINANCIAL PROTEC7 TION BUREAU REQUIREMENTS.—The Di8 rector shall, based on consumer testing, 

9 and in accordance with paragraph (17)(A), 

10 promulgate rules establishing minimum 

11 standards for postsecondary educational 

12 lenders or servicers in carrying out the re13 quirements of this paragraph and a model 

14 form for borrowers to notify postsecondary 

15 educational lenders or servicers of the in16 formation under this paragraph.’’; 

17 (vii) in paragraph (9), as redesignated 

18 by clause (v), by adding at the end the fol19 lowing: 

20 ‘‘(D) MODEL DISCLOSURE FORM FOR AL21 TERNATIVE REPAYMENT OPTIONS, FORBEAR22 ANCE, AND DEFERMENT OPTIONS.—Not later 

23 than 2 years after the date of enactment of the 

24 Student Loan Borrower Bill of Rights, the Di25 rector shall, based on consumer testing and 


pamtmann on DSKBFK8HB2PROD with BILLS
23 

•S 1354 IS

1 through regulations promulgated in accordance 

2 with paragraph (17)(A), develop and issue 

3 model forms to allow borrowers to compare al4 ternative repayment options, forbearance, and 

5 deferment options with the borrower’s existing 

6 repayment plan with respect to a postsecondary 

7 education loan. In developing such forms, the 

8 Director shall consider and evaluate the fol9 lowing for inclusion: 

10 ‘‘(i) The total amount to be paid over 

11 the life of the loan. 

12 ‘‘(ii) The total amount in interest to 

13 be paid over the life of the loan. 

14 ‘‘(iii) The monthly payment amount. 

15 ‘‘(iv) The expected pay-off date. 

16 ‘‘(v) Other related fees and costs, as 

17 applicable. 

18 ‘‘(vi) Eligibility requirements, and 

19 how the borrower can apply for an alter20 native repayment option, forbearance, or 

21 deferment option. 

22 ‘‘(vii) Any relevant consequences due 

23 to action or inaction, such as default, in24 cluding any actions that would result in 

25 the loss of eligibility for alternative repayVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
24 

•S 1354 IS

1 ment options, forbearance, or deferment 

2 options.’’; 

3 (viii) in paragraph (12), as redesig4 nated by clause (v), by striking ‘‘paragraph 

5 (7)’’ and inserting ‘‘paragraph (11)’’; 

6 (ix) by striking paragraph (14), as re7 designated by clause (v), and inserting the 

8 following: 

9 ‘‘(14) DEFINITIONS.—In this subsection— 

10 ‘‘(A) the terms ‘covered educational insti11 tution’, ‘private educational lender’, and ‘pri12 vate education loan’ have the same meanings as 

13 in section 140; 

14 ‘‘(B) the term ‘postsecondary education 

15 loan’ means— 

16 ‘‘(i) a private education loan; or 

17 ‘‘(ii) a loan made, insured, or guaran18 teed under part B, D, or E of title IV of 

19 the Higher Education Act of 1965 (20 

20 U.S.C. 1071 et seq., 1087a et seq., and 

21 1087aa et seq.); 

22 ‘‘(C) the term ‘postsecondary educational 

23 lender or servicer’ means— 

24 ‘‘(i) an eligible lender of a loan made, 

25 insured, or guaranteed under part B of the 


pamtmann on DSKBFK8HB2PROD with BILLS
25 

•S 1354 IS

1 Higher Education Act of 1965 (20 U.S.C. 

2 1071 et seq.); 

3 ‘‘(ii) any entity with which the Sec4 retary enters into a contract under section 

5 456 of the Higher Education Act of 1965 

6 (20 U.S.C. 1087f) for origination, serv7 icing, or collection described in subsection 

8 (b) of such section 456 and is engaged in 

9 the provision of, or offering, servicing, as 

10 defined in paragraph (16)(A)(iv), or collec11 tions regardless of whether the Secretary 

12 identifies the entity as a ‘servicer’ in such 

13 contract; 

14 ‘‘(iii) a private educational lender; 

15 ‘‘(iv) any other person or entity en16 gaged in the business of securing, making, 

17 or extending postsecondary education loans 

18 on behalf of a person or entity described in 

19 clause (i) or (iii); or 

20 ‘‘(v) any other holder of a postsec21 ondary education loan other than the Sec22 retary; 

23 ‘‘(D) the term ‘Director’ means the Direc24 tor of the Bureau; and 


pamtmann on DSKBFK8HB2PROD with BILLS
26 

•S 1354 IS

1 ‘‘(E) the term ‘Secretary’ means the Sec2 retary of Education.’’; 

3 (x) in paragraph (15), as redesignated 

4 by clause (v), by striking ‘‘paragraph (5)’’ 

5 and inserting ‘‘paragraph (9)’’; and 

6 (xi) by adding at the end the fol7 lowing: 

8 ‘‘(16) STUDENT LOAN BORROWER BILL OF

9 RIGHTS.— 

10 ‘‘(A) DEFINITIONS.—In this paragraph: 

11 ‘‘(i) BORROWER.—The term ‘bor12 rower’ means the person to whom a post13 secondary education loan is extended. 

14 ‘‘(ii) CHARGE OFF.—The term ‘charge 

15 off’ means charge to profit and loss, or 

16 subject to any similar action. 

17 ‘‘(iii) QUALIFIED WRITTEN RE18 QUEST.— 

19 ‘‘(I) IN GENERAL.—The term 

20 ‘qualified written request’ means a 

21 written correspondence of a borrower 

22 (other than notice on a payment me23 dium supplied by the postsecondary 

24 educational lender or servicer) trans25 mitted by mail, facsimile, or electroniVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
27 

•S 1354 IS

1 cally through an email address or 

2 website designated by the postsec3 ondary educational lender or servicer 

4 to receive communications from bor5 rowers that— 

6 ‘‘(aa) includes, or otherwise 

7 enables the postsecondary edu8 cational lender or servicer to 

9 identify, the name and account of 

10 the borrower; and 

11 ‘‘(bb) includes, to the extent 

12 applicable— 

13 ‘‘(AA) sufficient detail 

14 regarding the information 

15 sought by the borrower; or 

16 ‘‘(BB) a statement of 

17 the reasons for the belief of 

18 the borrower that there is 

19 an error regarding the ac20 count of the borrower. 

21 ‘‘(II) CORRESPONDENCE DELIV22 ERED TO OTHER ADDRESSES.— 

23 ‘‘(aa) IN GENERAL.—A writ24 ten correspondence of a borrower 

25 is a qualified written request if 


pamtmann on DSKBFK8HB2PROD with BILLS
28 

•S 1354 IS

1 the written correspondence is 

2 transmitted to and received by a 

3 postsecondary educational lender 

4 or servicer at a mailing address, 

5 facsimile number, email address, 

6 or website address other than the 

7 address or number designated by 

8 that postsecondary educational 

9 lender or servicer to receive com10 munications from borrowers but 

11 the written correspondence meets 

12 the requirements under items 

13 (aa) and (bb) of subclause (I). 

14 ‘‘(bb) DUTY TO TRANS15 FER.—A postsecondary edu16 cational lender or servicer shall, 

17 within a reasonable period of 

18 time, transfer a written cor19 respondence of a borrower re20 ceived by the postsecondary edu21 cational lender or servicer at a 

22 mailing address, facsimile num23 ber, email address, or website ad24 dress other than the address or 

25 number designated by that postVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
29 

•S 1354 IS

1 secondary educational lender or 

2 servicer to receive communica3 tions from borrowers to the cor4 rect address or appropriate office 

5 or other unit of the postsec6 ondary educational lender or 

7 servicer. 

8 ‘‘(cc) DATE OF RECEIPT.—A 

9 written correspondence of a bor10 rower transferred in accordance 

11 with item (bb) shall be deemed to 

12 be received by the postsecondary 

13 educational lender or servicer on 

14 the date on which the written 

15 correspondence is transferred to 

16 the correct address or appro17 priate office or other unit of the 

18 postsecondary educational lender 

19 or servicer. 

20 ‘‘(iv) SERVICING.—The term ‘serv21 icing’ means 1 or more of the following: 

22 ‘‘(I) Receiving any scheduled 

23 periodic payments from a borrower or 

24 notification of such payments pursu25 ant to the terms of a postsecondary 


pamtmann on DSKBFK8HB2PROD with BILLS
30 

•S 1354 IS

1 education loan or contract governing 

2 the servicing. 

3 ‘‘(II) Applying payments to the 

4 borrower’s account pursuant to the 

5 terms of the postsecondary education 

6 loan or the contract governing the 

7 servicing. 

8 ‘‘(III) Maintaining account 

9 records for a postsecondary education 

10 loan. 

11 ‘‘(IV) Communicating with a bor12 rower regarding a postsecondary edu13 cation loan on behalf of the postsec14 ondary educational lender or servicer. 

15 ‘‘(V) Interactions with a bor16 rower, including activities to help pre17 vent default on obligations arising 

18 from postsecondary education loans, 

19 conducted to facilitate the activities 

20 described in subclause (I) or (II). 

21 ‘‘(B) SALE, TRANSFER, OR ASSIGNMENT.— 

22 If the sale, other transfer, assignment, or trans23 fer of servicing obligations of a postsecondary 

24 education loan results in a change in the iden25 tity of the party to whom the borrower must 


pamtmann on DSKBFK8HB2PROD with BILLS
31 

•S 1354 IS

1 send subsequent payments or direct any com2 munications concerning the loan— 

3 ‘‘(i) the transferor shall— 

4 ‘‘(I) notify the borrower, in writ5 ing, in simple and understandable 

6 terms, not fewer than 45 days before 

7 transferring a legally enforceable right 

8 to receive payment from the borrower 

9 on such loan, of— 

10 ‘‘(aa) the sale or other 

11 transfer, assignment, or transfer 

12 of servicing obligations; 

13 ‘‘(bb) the identity of the 

14 transferee; 

15 ‘‘(cc) the name and address 

16 of the party to whom subsequent 

17 payments or communications 

18 must be sent; 

19 ‘‘(dd) the telephone numbers 

20 and websites of both the trans21 feror and the transferee; 

22 ‘‘(ee) the effective date of 

23 the sale, transfer, or assignment; 


pamtmann on DSKBFK8HB2PROD with BILLS
32 

•S 1354 IS

1 ‘‘(ff) the date on which the 

2 transferor will stop accepting 

3 payment; and 

4 ‘‘(gg) the date on which the 

5 transferee will begin accepting 

6 payment; 

7 ‘‘(II) forward any payment from 

8 a borrower with respect to such post9 secondary education loan to the trans10 feree, immediately upon receiving such 

11 payment, during the 60-day period be12 ginning on the date on which the 

13 transferor stops accepting payment of 

14 such postsecondary education loan; 

15 ‘‘(III) provide to the transferee 

16 all borrower information and complete 

17 payment history information for any 

18 such postsecondary education loans; 

19 and 

20 ‘‘(ii) the transferee shall— 

21 ‘‘(I) notify the borrower, in writ22 ing, in simple and understandable 

23 terms, not fewer than 45 days before 

24 acquiring a legally enforceable right to 


pamtmann on DSKBFK8HB2PROD with BILLS
33 

•S 1354 IS

1 receive payment from the borrower on 

2 such loan, of— 

3 ‘‘(aa) the sale or other 

4 transfer, assignment, or transfer 

5 of servicing obligations; 

6 ‘‘(bb) the identity of the 

7 transferor; 

8 ‘‘(cc) the name and address 

9 of the party to whom subsequent 

10 payments or communications 

11 must be sent; 

12 ‘‘(dd) the telephone numbers 

13 and websites of both the trans14 feror and the transferee; 

15 ‘‘(ee) the effective date of 

16 the sale, transfer, assignment, or 

17 transfer of servicing obligations; 

18 ‘‘(ff) the date on which the 

19 transferor will stop accepting 

20 payment; and 

21 ‘‘(gg) the date on which the 

22 transferee will begin accepting 

23 payment; 

24 ‘‘(II) accept as on-time and may 

25 not impose any late fee or finance 


pamtmann on DSKBFK8HB2PROD with BILLS
34 

•S 1354 IS

1 charge for any payment from a bor2 rower with respect to such postsec3 ondary education loan that is for4 warded from the transferor during the 

5 90-day period beginning on the date 

6 on which the transferor stops accept7 ing payment, if the transferor receives 

8 such payment on or before the appli9 cable due date, including any grace 

10 period; 

11 ‘‘(III) provide borrowers a sim12 ple, online process for transferring ex13 isting electronic fund transfer author14 ity; and 

15 ‘‘(IV) honor any promotion or 

16 benefit available or granted to the 

17 borrower or advertised by the previous 

18 owner or transferor of such postsec19 ondary education loan. 

20 ‘‘(C) MATERIAL CHANGE IN MAILING AD21 DRESS OR PROCEDURE FOR HANDLING PAY22 MENTS.— 

23 ‘‘(i) IN GENERAL.—If a postsecondary 

24 educational lender or servicer makes a 

25 change in the mailing address, office, or 


pamtmann on DSKBFK8HB2PROD with BILLS
35 

•S 1354 IS

1 procedures for handling payments with re2 spect to any postsecondary education loan, 

3 the postsecondary educational lender or 

4 servicer shall notify the borrower in writing 

5 and through the borrower’s preferred or 

6 designated method of communication not 

7 less than 45 calendar days in advance of 

8 such change. 

9 ‘‘(ii) BORROWER PROTECTION WIN10 DOW.—If a change described in clause (i) 

11 causes a delay in the crediting of the ac12 count of the borrower made during the 90- 

13 day period following the date on which 

14 such change took effect, the postsecondary 

15 educational lender or servicer may not im16 pose on the borrower any negative con17 sequences, including negative credit report18 ing, lost eligibility in borrower benefits, 

19 late fees, interest capitalization, or other 

20 financial injury. 

21 ‘‘(D) INTEREST RATE AND TERM CHANGES

22 FOR CERTAIN POSTSECONDARY EDUCATION

23 LOANS.— 

24 ‘‘(i) NOTIFICATION REQUIREMENTS.— 


pamtmann on DSKBFK8HB2PROD with BILLS
36 

•S 1354 IS

1 ‘‘(I) IN GENERAL.—Except as 

2 provided in clause (iii), a postsec3 ondary educational lender or servicer 

4 shall provide written notice to a bor5 rower of any material change in the 

6 terms of the postsecondary education 

7 loan, including an increase in the in8 terest rate, not later than 45 days be9 fore the effective date of the change 

10 or increase. 

11 ‘‘(II) MATERIAL CHANGES IN

12 TERMS.—The Director shall, by regu13 lation, establish guidelines for deter14 mining which changes in terms are 

15 material under subclause (I). 

16 ‘‘(ii) LIMITS ON INTEREST RATE AND

17 FEE INCREASES APPLICABLE TO OUT18 STANDING BALANCE.—Except as provided 

19 in clause (iii), a postsecondary educational 

20 lender or servicer may not increase the in21 terest rate or other fee applicable to an 

22 outstanding balance on a postsecondary 

23 education loan. 


pamtmann on DSKBFK8HB2PROD with BILLS
37 

•S 1354 IS

1 ‘‘(iii) EXCEPTIONS.—The require2 ments under clauses (i) and (ii) shall not 

3 apply to— 

4 ‘‘(I) an increase based on an ap5 plicable variable interest rate incor6 porated in the terms of a postsec7 ondary education loan that provides 

8 for changes in the interest rate ac9 cording to operation of an index that 

10 is not under the control of the post11 secondary educational lender or 

12 servicer and is published for viewing 

13 by the general public; 

14 ‘‘(II) an increase in interest rate 

15 due to the completion of a workout or 

16 temporary hardship arrangement by 

17 the borrower or the failure of the bor18 rower to comply with the terms of a 

19 workout or temporary hardship ar20 rangement if— 

21 ‘‘(aa) the interest rate appli22 cable to a category of trans23 actions following any such in24 crease does not exceed the rate 

25 or fee that applied to that catVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
38 

•S 1354 IS

1 egory of transactions prior to 

2 commencement of the arrange3 ment; and 

4 ‘‘(bb) the postsecondary edu5 cational lender or servicer has 

6 provided the borrower, prior to 

7 the commencement of such ar8 rangement, with clear and con9 spicuous disclosure of the terms 

10 of the arrangement (including 

11 any increases due to such com12 pletion or failure); and 

13 ‘‘(III) an increase in interest rate 

14 due to a provision included within the 

15 terms of a postsecondary education 

16 loan that provides for a lower interest 

17 rate based on the borrower’s agree18 ment to a prearranged plan that au19 thorizes recurring electronic funds 

20 transfers if— 

21 ‘‘(aa) the borrower with22 draws the borrower’s authoriza23 tion of the prearranged recurring 

24 electronic funds transfer plan; 

25 and 


pamtmann on DSKBFK8HB2PROD with BILLS
39 

•S 1354 IS

1 ‘‘(bb) after withdrawal of 

2 the borrower’s authorization and 

3 prior to increasing the interest 

4 rate, the postsecondary edu5 cational lender or servicer has 

6 provided the borrower with clear 

7 and conspicuous disclosure of the 

8 impending change in borrower’s 

9 interest rate and a reasonable op10 portunity to reauthorize the pre11 arranged electronic funds trans12 fers plan. 

13 ‘‘(E) PAYMENT INFORMATION.— 

14 ‘‘(i) STATEMENT REQUIRED WITH

15 EACH BILLING CYCLE.—A postsecondary 

16 educational lender or servicer for each bor17 rower’s account that is being serviced by 

18 the postsecondary educational lender or 

19 servicer and that includes a postsecondary 

20 education loan shall transmit to the bor21 rower, for each billing cycle during which 

22 there is an outstanding balance in that ac23 count, a statement that includes— 


pamtmann on DSKBFK8HB2PROD with BILLS
40 

•S 1354 IS

1 ‘‘(I) the interest rate, principal 

2 balance, minimum monthly payment, 

3 and payment due date for each loan; 

4 ‘‘(II) the outstanding balance in 

5 the account and each loan at the be6 ginning of the billing cycle; 

7 ‘‘(III) the total amount credited 

8 to the account and each loan during 

9 the billing cycle; 

10 ‘‘(IV) the total amount of unpaid 

11 interest for the account and each loan; 

12 ‘‘(V) the amount of any fee 

13 added to the account during the bill14 ing cycle, itemized to show each indi15 vidual fee amount and reason for each 

16 fee; 

17 ‘‘(VI) the address and phone 

18 number of the postsecondary edu19 cational lender or servicer to which 

20 the borrower may direct billing inquir21 ies; 

22 ‘‘(VII) the amount of any pay23 ments or other credits during the bill24 ing cycle that was applied respectively 


pamtmann on DSKBFK8HB2PROD with BILLS
41 

•S 1354 IS

1 to the principal and to interest for 

2 each loan; 

3 ‘‘(VIII) the manner, pursuant to 

4 subparagraph (G), in which payments 

5 will be allocated among multiple loans 

6 if the borrower does not provide spe7 cific payment instructions; 

8 ‘‘(IX) whether each loan is in 

9 deferment or forbearance; 

10 ‘‘(X) information on how to file a 

11 complaint with the Bureau and with 

12 the ombudsman designated pursuant 

13 to section 1035 of the Consumer Fi14 nancial Protection Act of 2010 (12 

15 U.S.C. 5535) and the Department of 

16 Education; 

17 ‘‘(XI) for any borrower consid18 ered to be at risk, as described in sub19 paragraph (J)(i), a statement that a 

20 repayment specialist office or unit 

21 designated under subparagraph (J) is 

22 available to answer inquiries related to 

23 alternative repayment options, includ24 ing the toll-free telephone number to 


pamtmann on DSKBFK8HB2PROD with BILLS
42 

•S 1354 IS

1 contact the specialist pursuant to sub2 paragraph (J)(iii); and 

3 ‘‘(XII) any other information de4 termined appropriate by the Director 

5 through regulations promulgated, 

6 based on consumer testing and in ac7 cordance with paragraph (17)(A). 

8 ‘‘(ii) DISCLOSURE OF PAYMENT DEAD9 LINES.—In the case of a postsecondary 

10 education loan account under which a late 

11 fee or charge may be imposed due to the 

12 failure of the borrower to make payment 

13 on or before the due date for such pay14 ment, the billing statement required under 

15 clause (i) with respect to the account shall 

16 include, in a conspicuous location on the 

17 billing statement, the date on which the 

18 payment is due or, if different, the date on 

19 which a late fee will be charged, together 

20 with the amount of the late fee to be im21 posed if payment is made after that date. 

22 ‘‘(F) APPLICATION OF PAYMENTS.— 

23 ‘‘(i) APPLY PAYMENT ON DATE RE24 CEIVED.—Unless otherwise directed by the 

25 borrower, a postsecondary educational 


pamtmann on DSKBFK8HB2PROD with BILLS
43 

•S 1354 IS

1 lender or servicer shall apply payments to 

2 a borrower’s account on the date the pay3 ment is received. 

4 ‘‘(ii) PROMULGATION OF RULES.— 

5 The Director, in accordance with para6 graph (17)(A), may promulgate rules for 

7 the application of postsecondary education 

8 loan payments that— 

9 ‘‘(I) implements the requirements 

10 in this section; 

11 ‘‘(II) minimizes the amount of 

12 fees and interest incurred by the bor13 rower and the total loan amount paid 

14 by the borrower; 

15 ‘‘(III) minimizes delinquencies, 

16 assignments to collection, and charge 

17 offs; 

18 ‘‘(IV) requires postsecondary 

19 educational lenders or servicers to 

20 apply payments on the date received; 

21 and 

22 ‘‘(V) allows the borrower to in23 struct the postsecondary educational 

24 lender or servicer to apply payments 


pamtmann on DSKBFK8HB2PROD with BILLS
44 

•S 1354 IS

1 in a manner preferred by the bor2 rower. 

3 ‘‘(iii) METHOD THAT BEST BENEFITS

4 BORROWER.—In promulgating the rules 

5 under clause (ii), the Director shall choose 

6 the allocation method that best benefits the 

7 borrower and is compatible with existing 

8 repayment options. 

9 ‘‘(G) ALLOCATION OF PAYMENTS AMONG

10 MULTIPLE LOANS.— 

11 ‘‘(i) ALLOCATION OF UNDERPAY12 MENTS.—Unless otherwise directed by the 

13 borrower, upon receipt of a payment that 

14 does not satisfy the full amount due for 

15 each postsecondary education loan, the 

16 postsecondary educational lender or 

17 servicer shall allocate amounts in a manner 

18 that minimizes negative consequences, in19 cluding negative credit reporting and late 

20 fees, and, where multiple loans share an 

21 equal stage of delinquency, the postsec22 ondary educational lender or servicer shall 

23 first allocate payment to the postsecondary 

24 education loan with the smallest monthly 

25 payment, and then, after satisfying that 


pamtmann on DSKBFK8HB2PROD with BILLS
45 

•S 1354 IS

1 monthly payment, to each successive loan 

2 bearing the next highest monthly payment, 

3 until the payment is exhausted. A borrower 

4 may instruct or expressly authorize a post5 secondary educational lender or servicer to 

6 allocate payments in a different manner. 

7 ‘‘(ii) ALLOCATION OF EXCESS

8 AMOUNTS.—Unless otherwise directed by 

9 the borrower, upon receipt of a payment 

10 exceeding the total amount due among all 

11 the borrower’s postsecondary education 

12 loans, the postsecondary educational lender 

13 or servicer shall satisfy the amounts due 

14 for each loan, and then allocate amounts in 

15 excess of the minimum payment amount 

16 first to the postsecondary education loan 

17 balance bearing the highest annual per18 centage rate, and then, once that loan is 

19 repaid, to each successive postsecondary 

20 education loan bearing the next highest an21 nual percentage rate, until the payment is 

22 exhausted. A borrower may instruct or ex23 pressly authorize a postsecondary edu24 cational lender or servicer to allocate such 

25 excess payments in a different manner. 


pamtmann on DSKBFK8HB2PROD with BILLS
46 

•S 1354 IS

1 ‘‘(iii) ALLOCATION OF EXACT PAY2 MENTS.—Unless otherwise directed by the 

3 borrower upon receipt of a payment that 

4 exactly satisfies the monthly payments for 

5 each loan, the postsecondary educational 

6 lender or servicer shall allocate payments 

7 to satisfy each monthly payment. 

8 ‘‘(iv) PROMULGATION OF RULES.— 

9 The Director, in accordance with para10 graph (17)(A), may promulgate rules for 

11 the allocation of payments among multiple 

12 postsecondary education loans that— 

13 ‘‘(I) implements the requirements 

14 in this section; 

15 ‘‘(II) minimizes the amount of 

16 fees and interest incurred by the bor17 rower and the total loan amount paid 

18 by the borrower; 

19 ‘‘(III) minimizes delinquencies, 

20 assignments to collection, and charge 

21 offs; 

22 ‘‘(IV) requires postsecondary 

23 educational lenders or servicers to 

24 apply payments on the date received; 

25 and 


pamtmann on DSKBFK8HB2PROD with BILLS
47 

•S 1354 IS

1 ‘‘(V) allows the borrower to in2 struct postsecondary educational lend3 ers or servicers to apply payments in 

4 a manner preferred by the borrower, 

5 including excess payments. 

6 ‘‘(v) METHOD THAT BEST BENEFITS

7 BORROWER.—In promulgating the rules 

8 under clause (iv), the Director shall choose 

9 the allocation method that best benefits the 

10 borrower and is compatible with existing 

11 repayment options. 

12 ‘‘(H) LATE FEES.— 

13 ‘‘(i) IN GENERAL.—A late fee may not 

14 be charged to a borrower for a postsec15 ondary education loan under any of the fol16 lowing circumstances, either individually or 

17 in combination: 

18 ‘‘(I) On a per-loan basis when a 

19 borrower has multiple postsecondary 

20 education loans. 

21 ‘‘(II) In an amount greater than 

22 4 percent of the amount of the pay23 ment past due. 


pamtmann on DSKBFK8HB2PROD with BILLS
48 

•S 1354 IS

1 ‘‘(III) Before the end of the 15- 

2 day period beginning on the date the 

3 payment is due. 

4 ‘‘(IV) More than once with re5 spect to a single late payment. 

6 ‘‘(V) The borrower fails to make 

7 a singular, non-successive regularly 

8 scheduled payment on the postsec9 ondary education loan. 

10 ‘‘(ii) COORDINATION WITH SUBSE11 QUENT LATE FEES.—No late fee may be 

12 charged to a borrower for a postsecondary 

13 education loan relating to an insufficient 

14 payment if the payment is made on or be15 fore the due date of the payment, or within 

16 any applicable grace period for the pay17 ment, if the insufficiency is attributable 

18 only to a late fee relating to an earlier pay19 ment, and the payment is otherwise a full 

20 payment for the applicable period. 

21 ‘‘(iii) PAYMENTS AT LOCAL

22 BRANCHES.—If the loan holder, in the case 

23 of a postsecondary education loan account 

24 referred to in subparagraph (A), is a fi25 nancial institution that maintains a branch 


pamtmann on DSKBFK8HB2PROD with BILLS
49 

•S 1354 IS

1 or office at which payments on any such 

2 account are accepted from the borrower in 

3 person, the date on which the borrower 

4 makes a payment on the account at such 

5 branch or office shall be considered to be 

6 the date on which the payment is made for 

7 purposes of determining whether a late fee 

8 may be imposed due to the failure of the 

9 borrower to make payment on or before 

10 the due date for such payment. 

11 ‘‘(I) BORROWER INQUIRIES.— 

12 ‘‘(i) DUTY OF POSTSECONDARY EDU13 CATIONAL LENDERS OR SERVICERS TO RE14 SPOND TO BORROWER INQUIRIES.— 

15 ‘‘(I) NOTICE OF RECEIPT OF RE16 QUEST.—If a borrower submits a 

17 qualified written request to the post18 secondary educational lender or 

19 servicer for information relating to the 

20 servicing of the postsecondary edu21 cation loan, the postsecondary edu22 cational lender or servicer shall pro23 vide a written response acknowledging 

24 receipt of the qualified written request 

25 within 5 business days unless any acVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
50 

•S 1354 IS

1 tion requested by the borrower is 

2 taken within such period. 

3 ‘‘(II) ACTION WITH RESPECT TO

4 INQUIRY.—Not later than 30 business 

5 days after the receipt from a borrower 

6 of a qualified written request under 

7 subclause (I) and, if applicable, before 

8 taking any action with respect to the 

9 qualified written request of the bor10 rower, the postsecondary educational 

11 lender or servicer shall— 

12 ‘‘(aa) make appropriate cor13 rections in the account of the 

14 borrower, including the crediting 

15 of any late fees, and transmit to 

16 the borrower a written notifica17 tion of such correction (which 

18 shall include the name and toll19 free or collect-call telephone num20 ber of a representative of the 

21 postsecondary educational lender 

22 or servicer who can provide as23 sistance to the borrower); 

24 ‘‘(bb) after conducting an 

25 investigation, provide the borVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
51 

•S 1354 IS

1 rower with a written explanation 

2 or clarification that includes— 

3 ‘‘(AA) to the extent ap4 plicable, a statement of the 

5 reasons for which the post6 secondary educational lender 

7 or servicer believes the ac8 count of the borrower is cor9 rect as determined by the 

10 postsecondary educational 

11 lender or servicer; and 

12 ‘‘(BB) the name and 

13 toll-free or collect-call tele14 phone number of an indi15 vidual employed by, or the 

16 office or department of, the 

17 postsecondary educational 

18 lender or servicer who can 

19 provide assistance to the 

20 borrower; or 

21 ‘‘(cc) after conducting an in22 vestigation, provide the borrower 

23 with a written explanation or 

24 clarification that includes— 


pamtmann on DSKBFK8HB2PROD with BILLS
52 

•S 1354 IS

1 ‘‘(AA) information re2 quested by the borrower or 

3 explanation of why the infor4 mation requested is unavail5 able or cannot be obtained 

6 by the postsecondary edu7 cational lender or servicer; 

8 and 

9 ‘‘(BB) the name and 

10 toll-free or collect-call tele11 phone number of an indi12 vidual employed by, or the 

13 office or department of, the 

14 postsecondary educational 

15 lender or servicer who can 

16 provide assistance to the 

17 borrower. 

18 ‘‘(III) LIMITED EXTENSION OF

19 RESPONSE TIME.— 

20 ‘‘(aa) IN GENERAL.—There 

21 may be 1 extension of the 30-day 

22 period described in subclause (II) 

23 of not more than 15 days if, be24 fore the end of such 30-day pe25 riod, the postsecondary eduVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
53 

•S 1354 IS

1 cational lender or servicer noti2 fies the borrower of the extension 

3 and the reasons for the delay in 

4 responding. 

5 ‘‘(bb) REPORTS TO BU6 REAU.—Each postsecondary edu7 cational lender or servicer shall, 

8 on an annual basis, report to the 

9 Bureau the aggregate number of 

10 extensions sought by the such 

11 postsecondary educational lender 

12 or servicer under item (aa). 

13 ‘‘(ii) PROTECTION AGAINST NEGATIVE

14 CONSEQUENCES.—During the 60-day pe15 riod beginning on the date on which a 

16 postsecondary educational lender or 

17 servicer receives a qualified written request 

18 from a borrower relating to a dispute re19 garding payments by the borrower, a post20 secondary educational lender or servicer 

21 may not impose any negative consequences 

22 on the borrower relating to the subject of 

23 the qualified written request or to such pe24 riod including— 


pamtmann on DSKBFK8HB2PROD with BILLS
54 

•S 1354 IS

1 ‘‘(I) providing negative credit in2 formation to any consumer reporting 

3 agency (as defined in section 603 of 

4 the Fair Credit Reporting Act (15 

5 U.S.C. 1681a)); 

6 ‘‘(II) lost eligibility for a bor7 rower benefit; 

8 ‘‘(III) late fees; 

9 ‘‘(IV) interest capitalization; or 

10 ‘‘(V) other financial injury. 

11 ‘‘(J) REPAYMENT SPECIALISTS FOR AT12 RISK BORROWERS.— 

13 ‘‘(i) AT-RISK BORROWERS.—A post14 secondary educational lender or servicer 

15 shall designate an office or other unit to 

16 act as a repayment specialist regarding 

17 postsecondary education loans for— 

18 ‘‘(I) any borrower who— 

19 ‘‘(aa) becomes 30 calendar 

20 days or more delinquent under 

21 the postsecondary education loan; 

22 or 

23 ‘‘(bb) notifies the postsec24 ondary educational lender or 

25 servicer pursuant to paragraph 


pamtmann on DSKBFK8HB2PROD with BILLS
55 

•S 1354 IS

1 (8)(C) that the borrower is hav2 ing difficulty making payment; 

3 ‘‘(II) any borrower who requests 

4 information related to options to re5 duce or suspend the borrower’s 

6 monthly payment, or otherwise indi7 cates that the borrower is experi8 encing or is about to experience finan9 cial hardship or distress; 

10 ‘‘(III) any borrower who has not 

11 completed the program of study for 

12 which the borrower received the loans; 

13 ‘‘(IV) any borrower who is en14 rolled in discretionary forbearance for 

15 more than 9 of the previous 12 

16 months; 

17 ‘‘(V) any borrower who has reha18 bilitated or consolidated 1 or more 

19 postsecondary education loans out of 

20 default within the prior 24 months; 

21 ‘‘(VI) a borrower who seeks in22 formation regarding, seeks to enter an 

23 agreement for, or seeks to resolve an 

24 issue under a repayment option that 


pamtmann on DSKBFK8HB2PROD with BILLS
56 

•S 1354 IS

1 requires subsequent submission of 

2 supporting documentation; 

3 ‘‘(VII) a borrower who seeks to 

4 modify the terms of the repayment of 

5 the postsecondary education loan be6 cause of hardship; and 

7 ‘‘(VIII) any borrower or segment 

8 of borrowers determined by the Direc9 tor or the Secretary to be at risk. 

10 ‘‘(ii) TRAINING.—Staff of the repay11 ment specialist office or unit designated 

12 under clause (i) shall— 

13 ‘‘(I) receive rigorous, ongoing 

14 training related to available repay15 ment plans, loan forgiveness, and can16 cellation and discharge options; and 

17 ‘‘(II) be trained to— 

18 ‘‘(aa) assess the borrower’s 

19 long-term and short-term finan20 cial situation in discussing alter21 native repayment options with 

22 borrowers; 

23 ‘‘(bb) inform borrowers, 

24 when there is sufficient informa25 tion to determine that a borrower 


pamtmann on DSKBFK8HB2PROD with BILLS
57 

•S 1354 IS

1 may be eligible, about closed2 school discharge, discharge under 

3 defense to repayment, or total 

4 and permanent disability dis5 charge prior to informing the 

6 borrower about any other options 

7 for repayment; and 

8 ‘‘(cc) inform borrowers 

9 about alternative repayment op10 tions, prior to discussing forbear11 ance and deferment. 

12 ‘‘(iii) TOLL-FREE TELEPHONE NUM13 BER.—Each postsecondary educational 

14 lender or servicer shall maintain a toll-free 

15 telephone number that shall— 

16 ‘‘(I) connect directly to the re17 payment specialist office or unit des18 ignated under clause (i); 

19 ‘‘(II) be made available on the 

20 primary internet website of the post21 secondary educational lender or 

22 servicer, on monthly billing state23 ments, and any disclosures required 

24 by paragraph (6); and 


pamtmann on DSKBFK8HB2PROD with BILLS
58 

•S 1354 IS

1 ‘‘(III) not subject borrowers to 

2 unreasonable call wait times. 

3 ‘‘(iv) COMPENSATION.—Staff of the 

4 repayment specialist office or unit des5 ignated under clause (i) shall not be com6 pensated on the basis of the volume of 

7 calls or accounts handled, dollar amounts 

8 collected, brevity of calls, or in any other 

9 manner that may encourage undue haste 

10 and lack of diligence or quality customer 

11 service. 

12 ‘‘(K) SERVICEMEMBERS, VETERANS, AND

13 POSTSECONDARY EDUCATION LOANS.— 

14 ‘‘(i) SERVICEMEMBER AND VETERANS

15 LIAISON.—Each postsecondary educational 

16 lender or servicer shall designate an em17 ployee to act as the servicemember and 

18 veterans liaison who is responsible for an19 swering inquiries from servicemembers and 

20 veterans, and is specially trained on serv21 icemember and veteran benefits under the 

22 Servicemembers Civil Relief Act (50 U.S.C. 

23 App. 501 et seq.) and other Federal or 

24 State laws related to postsecondary edu25 cation loans. 


pamtmann on DSKBFK8HB2PROD with BILLS
59 

•S 1354 IS

1 ‘‘(ii) TOLL-FREE TELEPHONE NUM2 BER.—Each postsecondary educational 

3 lender or servicer shall maintain a toll-free 

4 telephone number that shall— 

5 ‘‘(I) connect directly to the serv6 icemember and veterans liaison des7 ignated under clause (i); 

8 ‘‘(II) be made available on the 

9 primary internet website of postsec10 ondary educational lender or servicer 

11 and on monthly billing statements; 

12 and 

13 ‘‘(III) not subject borrowers to 

14 unreasonable call wait times. 

15 ‘‘(iii) PROHIBITION ON CHARGE OFFS

16 AND DEFAULT.—A postsecondary edu17 cational lender or servicer may not charge 

18 off or report a postsecondary education 

19 loan as delinquent, assigned to collection 

20 (internally or by referral to a third party), 

21 in default, or charged off to a credit re22 porting agency if the borrower is on active 

23 duty in the Armed Forces (as defined in 

24 section 101(d)(1) of title 10, United States 

25 Code) serving in a combat zone (as desVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
60 

•S 1354 IS

1 ignated by the President under section 

2 112(c) of the Internal Revenue Code of 

3 1986). 

4 ‘‘(iv) ADDITIONAL LIAISONS.—The 

5 Director, in consultation with the Sec6 retary, shall determine additional entities 

7 with whom borrowers interact, including 

8 guaranty agencies, that shall designate an 

9 employee to act as the servicemember and 

10 veterans liaison who is responsible for an11 swering inquiries from servicemembers and 

12 veterans and is specially trained on 

13 servicemembers and veteran benefits and 

14 option under the Servicemembers Civil Re15 lief Act (50 U.S.C. App. 501 et seq.). 

16 ‘‘(L) BORROWER’S LOAN HISTORY.— 

17 ‘‘(i) IN GENERAL.—A postsecondary 

18 educational lender or servicer shall make 

19 available in a secure electronic form usable 

20 by borrowers, or in writing upon request, 

21 the loan history of each borrower for each 

22 postsecondary education loan, separately 

23 designating— 

24 ‘‘(I) payment history, including 

25 repayment plan and payments— 


pamtmann on DSKBFK8HB2PROD with BILLS
61 

•S 1354 IS

1 ‘‘(aa) made on such loan to 

2 previous postsecondary edu3 cational lenders or servicers; and 

4 ‘‘(bb) qualifying toward a 

5 loan forgiveness program and 

6 designating such program; 

7 ‘‘(II) loan history, including any 

8 forbearances, deferrals, delinquencies, 

9 assignment to collection, and charge 

10 offs; 

11 ‘‘(III) annual percentage rate 

12 history; 

13 ‘‘(IV) key loan terms, including 

14 application of payments to interest, 

15 principal, and fees, origination date, 

16 principal, capitalized interest, annual 

17 percentage rate, including any cap, 

18 loan term, and any contractual incen19 tives; 

20 ‘‘(V) amount due to pay off the 

21 outstanding balance; and 

22 ‘‘(VI) any other items determined 

23 by the Director through regulations 

24 promulgated in accordance with para25 graph (17)(A). 


pamtmann on DSKBFK8HB2PROD with BILLS
62 

•S 1354 IS

1 ‘‘(ii) ORIGINAL DOCUMENTATION.—A 

2 postsecondary educational lender or 

3 servicer shall make available to the bor4 rower, if requested, at no charge, copies of 

5 the original loan documents and the prom6 issory note for each postsecondary edu7 cation loan. 

8 ‘‘(M) ERROR RESOLUTION.—The Director, 

9 in consultation with the Secretary, shall pro10 mulgate rules requiring postsecondary edu11 cational lenders or servicers to establish error 

12 resolution procedures to allow borrowers to in13 quire about errors related to their postsec14 ondary education loans and obtain timely reso15 lution of such errors. 

16 ‘‘(N) ADDITIONAL SERVICING STAND17 ARDS.— 

18 ‘‘(i) PROHIBITIONS.—A postsecondary 

19 educational lender or servicer may not— 

20 ‘‘(I) charge a fee for responding 

21 to a qualified written request under 

22 this paragraph; 

23 ‘‘(II) fail to take timely action to 

24 respond to a qualified written request 

25 from a borrower to correct an error 


pamtmann on DSKBFK8HB2PROD with BILLS
63 

•S 1354 IS

1 relating to an allocation of payment or 

2 the payoff amount of the postsec3 ondary education loan; 

4 ‘‘(III) fail to take reasonable 

5 steps to avail the borrower of all pos6 sible alternative repayment arrange7 ments to avoid default; 

8 ‘‘(IV) fail to perform the obliga9 tions required under title IV of the 

10 Higher Education Act of 1965 (20 

11 U.S.C. 1070 et seq.); 

12 ‘‘(V) fail to respond within 10 

13 business days to a request from a bor14 rower to provide the name, address, 

15 and other relevant contact information 

16 of the loan holder of the borrower’s 

17 postsecondary education loan or, for a 

18 Federal Direct Loan or a Federal 

19 Perkins Loan, the Secretary of Edu20 cation, or the institution of higher 

21 education who made the loan, respec22 tively; 

23 ‘‘(VI) fail to comply with any ap24 plicable requirement of the 


pamtmann on DSKBFK8HB2PROD with BILLS
64 

•S 1354 IS

1 Servicemembers Civil Relief Act (50 

2 U.S.C. App. 501 et seq.); 

3 ‘‘(VII) charge a convenience, 

4 processing, or any other fee for pay5 ments made electronically or by tele6 phone; 

7 ‘‘(VIII) fail to comply with any 

8 other obligation that the Bureau, by 

9 regulation, has determined to be ap10 propriate to carry out the consumer 

11 protection purposes of this paragraph; 

12 or 

13 ‘‘(IX) fail to perform other 

14 standard servicing duties and func15 tions. 

16 ‘‘(ii) BUSINESS HOURS.—Postsec17 ondary educational lenders or servicers 

18 shall be open for borrower inquiries and 

19 outreach during and after normal business 

20 hours, including availability after 5:00 p.m. 

21 in all continental United States time zones 

22 and some weekend hours. 

23 ‘‘(iii) ADDITIONAL STANDARDS.—The 

24 Director may promulgate regulations, in 

25 accordance with paragraph (17)(A), estabVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
65 

•S 1354 IS

1 lishing additional servicing standards to re2 duce delinquencies, assignment to collec3 tions, defaults, and charge offs, and to en4 sure borrowers understand their rights and 

5 obligations related to their postsecondary 

6 education loans. 

7 ‘‘(O) PROHIBITION ON LIMITING BOR8 ROWER LEGAL ACTION BY POSTSECONDARY

9 EDUCATIONAL LENDERS AND SERVICERS.— 

10 ‘‘(i) WAIVER OF RIGHTS AND REM11 EDIES.—Any rights and remedies available 

12 to borrowers against postsecondary edu13 cational lenders or servicers may not be 

14 waived by any agreement, policy, or form, 

15 including by a mandatory predispute arbi16 tration agreement or class action waiver. 

17 ‘‘(ii) PREDISPUTE ARBITRATION

18 AGREEMENTS.—No limitation or restric19 tion on the ability of a borrower to pursue 

20 a claim in court with respect to a postsec21 ondary education loan, including manda22 tory predispute arbitration agreements and 

23 class action waivers, shall be valid or en24 forceable by a postsecondary educational 


pamtmann on DSKBFK8HB2PROD with BILLS
66 

•S 1354 IS

1 lender or servicer, including as a third2 party beneficiary or by estoppel. 

3 ‘‘(P) PREEMPTION.—Nothing in this para4 graph may be construed to preempt any provi5 sion of State law regarding postsecondary edu6 cation loans where the State law provides 

7 stronger consumer protections. 

8 ‘‘(Q) CIVIL LIABILITY.—A postsecondary 

9 educational lender or servicer that fails to com10 ply with any requirement imposed under this 

11 paragraph shall be deemed a creditor that has 

12 failed to comply with a requirement under this 

13 chapter for purposes of liability under section 

14 130 and such postsecondary educational lender 

15 or servicer shall be subject to the liability provi16 sions under such section, including the provi17 sions under paragraphs (1), (2)(A)(i), (2)(B), 

18 and (3) of section 130(a). 

19 ‘‘(R) ELIGIBILITY FOR DISCHARGE.—The 

20 Director, in accordance with paragraph (17)(A), 

21 shall promulgate rules requiring postsecondary 

22 educational lenders and servicers to— 

23 ‘‘(i) identify and contact borrowers 

24 who may be eligible for student loan dis25 charge by the Secretary, including under 


pamtmann on DSKBFK8HB2PROD with BILLS
67 

•S 1354 IS

1 section 437 of the Higher Education Act 

2 of 1965 (20 U.S.C. 1087); and 

3 ‘‘(ii) provide the borrower, in writing, 

4 in simple and understandable terms, infor5 mation about obtaining such discharge. 

6 ‘‘(17) CONSUMER FINANCIAL PROTECTION BU7 REAU REQUIREMENTS.— 

8 ‘‘(A) RULEMAKING.—The Director shall, 

9 based on consumer testing (as appropriate) and 

10 upon consideration of any final recommenda11 tions published by the Secretary under section 

12 456(g)(3) of the Higher Education Act of 1965 

13 (20 U.S.C. 1087f(g)(3)), promulgate regula14 tions in consultation with the Secretary, to 

15 carry out the requirements of this subsection. 

16 ‘‘(B) COMPLIANCE FOR CERTAIN ENTI17 TIES.— 

18 ‘‘(i) IN GENERAL.—The Director may 

19 promulgate regulations under subpara20 graph (A) to require an entity or class of 

21 entities with which the Secretary has en22 tered into a contract under section 456 of 

23 the Higher Education Act of 1965 (20 

24 U.S.C. 1087f) to comply with an alter25 native requirement or standard promulVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
68 

•S 1354 IS

1 gated by the Director in lieu of compliance 

2 with any requirement or standard under 

3 this subsection if the Director determines 

4 that— 

5 ‘‘(I) such entity or class of enti6 ties are not required by the Secretary 

7 pursuant to the contract to perform a 

8 servicing function governed by the re9 quirement or standard, and where 

10 such function is required by the Sec11 retary, to be performed by another en12 tity or class of entities; or 

13 ‘‘(II) the Secretary, in consulta14 tion with the Chief Operating Officer 

15 of Federal Student Aid, has promul16 gated regulations to establish an alter17 native requirement or standard with 

18 respect to such entity or class of enti19 ties that better benefits or protects 

20 borrowers and the Director incor21 porates such requirement or standard 

22 that better benefits or protects bor23 rowers into regulations promulgated 

24 under subparagraph (A). 


pamtmann on DSKBFK8HB2PROD with BILLS
69 

•S 1354 IS

1 ‘‘(ii) REPORTS.—The Director shall 

2 report to the Committee on Banking, 

3 Housing, and Urban Affairs of the Senate, 

4 the Committee on Health, Education, 

5 Labor, and Pensions of the Senate, the 

6 Committee on Financial Services of the 

7 House of Representatives, and the Com8 mittee on Education and Labor of the 

9 House of Representatives on any regula10 tions promulgated under clause (i). 

11 ‘‘(18) POSTSECONDARY EDUCATIONAL LEND12 ERS OR SERVICERS AND CONTRACTS OR SUB13 CONTRACTS.— 

14 ‘‘(A) IN GENERAL.—Any person or entity 

15 that enters into a contract or subcontract with 

16 a postsecondary educational lender or servicer 

17 to perform the servicing of a postsecondary 

18 educational loan may fulfill the obligations of 

19 the postsecondary educational lender or servicer 

20 under this subsection. 

21 ‘‘(B) JOINT AND SEVERAL LIABILITY FOR

22 SERVICE PROVIDERS.—Any entity or person de23 scribed in subparagraph (A) shall be jointly and 

24 severally liable for the actions of the entity or 

25 person in fulfilling the obligations of the postVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
70 

•S 1354 IS

1 secondary educational lender or servicer under 

2 this subsection.’’; and 

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

4 ‘‘(g) INFORMATION TO BE AVAILABLE AT NO

5 CHARGE.—The information required to be disclosed under 

6 this section shall be made available at no charge to the 

7 borrower.’’; and 

8 (2) in section 130(a)— 

9 (A) in paragraph (3), by striking 

10 ‘‘128(e)(7)’’ and inserting ‘‘128(e)(11)’’; and 

11 (B) in the flush matter at the end, by 

12 striking ‘‘or paragraph (4)(C), (6), (7), or (8) 

13 of section 128(e),’’ and inserting ‘‘or paragraph 

14 (4)(C), (10), (11), or (12) of section 128(e),’’. 

15 (b) EFFECTIVE DATE.— 

16 (1) IN GENERAL.—The amendments made 

17 under subsection (a) shall be effective 180 days after 

18 the date of enactment of this Act. 

19 (2) DELAY.—The Director of the Bureau of 

20 Consumer Financial Protection shall delay the effec21 tive date of the amendments made under subsection 

22 (a) for not more than 1 additional year with respect 

23 to entities engaged in servicing pursuant to a con24 tract awarded under section 456 of the Higher Edu25 cation Act of 1965 (20 U.S.C. 1087f) pending the 


pamtmann on DSKBFK8HB2PROD with BILLS
71 

•S 1354 IS

1 Secretary of Education’s final recommendations re2 quired under section 456(g) of such Act related to 

3 the promulgation of regulations by the Director 

4 under section 128(e)(17) of the Truth in Lending 

5 Act (15 U.S.C. 1638(e)(17)). 

6 SEC. 4. REHABILITATION OF PRIVATE EDUCATION LOANS. 

7 Section 623(a)(1)(E) of the Fair Credit Reporting 

8 Act (15 U.S.C. 1681s–2(a)(1)(E)) is amended to read as 

9 follows: 

10 ‘‘(E) REHABILITATION OF PRIVATE EDU11 CATION LOANS.— 

12 ‘‘(i) IN GENERAL.—If a borrower of a 

13 private education loan rehabilitates such 

14 loan in accordance with section 128(e)(23) 

15 of the Truth in Lending Act (15 U.S.C. 

16 1638(e)(23)), the private educational lend17 er or entity engaged in servicing such loan 

18 shall request that any consumer reporting 

19 agency to which the charge-off was re20 ported remove the delinquency that led to 

21 the charge-off and the charge-off from the 

22 borrower’s credit history. 

23 ‘‘(ii) BANKING AGENCIES.— 

24 ‘‘(I) IN GENERAL.—If a private 

25 educational lender is supervised by a 


pamtmann on DSKBFK8HB2PROD with BILLS
72 

•S 1354 IS

1 Federal banking agency, the private 

2 educational lender shall seek written 

3 approval from the Federal banking 

4 agency that the terms and conditions 

5 of the loan rehabilitation program of 

6 the lender meet the requirements of 

7 section 128(e)(23) of the Truth in 

8 Lending Act (15 U.S.C. 1638(e)(23)). 

9 ‘‘(II) FEEDBACK.—An appro10 priate Federal banking agency shall 

11 provide feedback to a private edu12 cational lender within 120 days of a 

13 request for approval under subclause 

14 (I). 

15 ‘‘(iii) DEFINITIONS.—For purposes of 

16 this subparagraph— 

17 ‘‘(I) the term ‘appropriate Fed18 eral banking agency’ has the meaning 

19 given the term in section 3 of the 

20 Federal Deposit Insurance Act (12 

21 U.S.C. 1813); and 

22 ‘‘(II) the term ‘private education 

23 loan’ has the meaning given the term 

24 in section 140(a) of the Truth in 

25 Lending Act (15 U.S.C. 1650(a)).’’. 


pamtmann on DSKBFK8HB2PROD with BILLS
73 

•S 1354 IS

1 SEC. 5. IMPROVED CONSUMER PROTECTIONS FOR PRIVATE 

2 EDUCATION LOANS. 

3 Section 128(e) of the Truth in Lending Act (15 

4 U.S.C. 1638(e)), as amended by section 3, is further 

5 amended— 

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

7 ‘‘(19) DISCHARGE OF PRIVATE EDUCATION

8 LOANS IN THE EVENT OF DEATH OR DISABILITY OF

9 THE BORROWER.—Each private education loan shall 

10 include terms that provide that the liability to repay 

11 the loan shall be canceled— 

12 ‘‘(A) upon the death of the borrower; 

13 ‘‘(B) if the borrower becomes permanently 

14 and totally disabled, as determined under sec15 tion 437(a)(1) of the Higher Education Act of 

16 1965 (20 U.S.C. 1087(a)(1)) and the regula17 tions promulgated by the Secretary under that 

18 section; or 

19 ‘‘(C) if the Secretary of Veterans Affairs 

20 or the Secretary of Defense determines that the 

21 borrower is unemployable due to a service-con22 nected condition or disability, in accordance 

23 with the requirements of section 437(a)(2) of 

24 such Act and the regulations promulgated by 

25 the Secretary under that section. 


pamtmann on DSKBFK8HB2PROD with BILLS
74 

•S 1354 IS

1 ‘‘(20) TERMS FOR CO-BORROWERS.—Each pri2 vate education loan shall include terms that clearly 

3 define the requirements to release a co-borrower 

4 from the obligation. 

5 ‘‘(21) PROHIBITION OF ACCELERATION OF PAY6 MENTS ON PRIVATE EDUCATION LOANS.— 

7 ‘‘(A) IN GENERAL.—Except as provided in 

8 subparagraph (B), a private education loan exe9 cuted after the date of enactment of this para10 graph may not include a provision that permits 

11 the private educational lender, loan holder, or 

12 entity engaged in servicing such loan to accel13 erate, in whole or in part, payments on the pri14 vate education loan. 

15 ‘‘(B) ACCELERATION CAUSED BY A PAY16 MENT DEFAULT.—A private education loan may 

17 include a provision that permits acceleration of 

18 the loan in cases of payment default. 

19 ‘‘(22) PROHIBITION ON DENIAL OF CREDIT DUE

20 TO ELIGIBILITY FOR PROTECTION UNDER

21 SERVICEMEMBERS CIVIL RELIEF ACT.—A private 

22 educational lender may not deny or refuse credit to 

23 an individual who is entitled to any right or protec24 tion provided under the Servicemembers Civil Relief 

25 Act (50 U.S.C. App. 501 et seq.) or subject, solely 


pamtmann on DSKBFK8HB2PROD with BILLS
75 

•S 1354 IS

1 by reason of such entitlement, such individual to any 

2 other action described in paragraphs (1) through (6) 

3 of section 108 of such Act. 

4 ‘‘(23) REHABILITATION OF PRIVATE EDU5 CATION LOANS.— 

6 ‘‘(A) IN GENERAL.—If a borrower of a pri7 vate education loan successfully and voluntarily 

8 makes 9 payments within 20 days of the due 

9 date during 10 consecutive months of amounts 

10 owed on the private education loan, or other11 wise brings the private education loan current 

12 after the loan is charged off, the loan shall be 

13 considered rehabilitated, and the lender or enti14 ty engaged in servicing such loan shall request 

15 that any consumer reporting agency to which 

16 the charge off was reported remove the delin17 quency that led to the charge off and the 

18 charge off from the borrower’s credit history. 

19 ‘‘(B) TERMS.—No private educational 

20 lender shall offer a borrower rehabilitation of 

21 loans where the payment required to rehabili22 tate a defaulted private education loan is less 

23 than the monthly payment amount required 

24 upon completion of rehabilitation.’’; 

25 (2) in paragraph (1)— 


pamtmann on DSKBFK8HB2PROD with BILLS
76 

•S 1354 IS

1 (A) by striking subparagraph (D) and in2 serting the following: 

3 ‘‘(D) requirements for a co-borrower, in4 cluding— 

5 ‘‘(i) any changes in the applicable in6 terest rates without a co-borrower; and 

7 ‘‘(ii) any conditions the borrower is 

8 required meet in order to release a co-bor9 rower from the private education loan obli10 gation;’’; 

11 (B) by redesignating subparagraphs (O), 

12 (P), (Q), and (R) as subparagraphs (P), (Q), 

13 (R), and (S), respectively; and 

14 (C) by inserting after subparagraph (N) 

15 the following: 

16 ‘‘(O) in the case of a refinancing of edu17 cation loans that include a Federal student loan 

18 made, insured, or guaranteed under title IV of 

19 the Higher Education Act of 1965 (20 U.S.C. 

20 1070 et seq.)— 

21 ‘‘(i) a list containing each loan to be 

22 refinanced, which shall identify whether 

23 the loan is a private education loan or a 

24 Federal student loan made, insured, or 

25 guaranteed under title IV of the Higher 


pamtmann on DSKBFK8HB2PROD with BILLS
77 

•S 1354 IS

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

2 seq.); and 

3 ‘‘(ii) benefits that the borrower may 

4 be forfeiting, including income-driven re5 payment options, opportunities for loan 

6 forgiveness, forbearance or deferment op7 tions, interest subsidies, and tax benefits;’’; 

8 and 

9 (3) in paragraph (2)— 

10 (A) by redesignating subparagraphs (O) 

11 and (P) as subparagraphs (P) and (Q), respec12 tively; and 

13 (B) by inserting after subparagraph (N) 

14 the following: 

15 ‘‘(O) in the case of a refinancing of edu16 cation loans that include a Federal student loan 

17 made, insured, or guaranteed under title IV of 

18 the Higher Education Act of 1965 (20 U.S.C. 

19 1070 et seq.)— 

20 ‘‘(i) a list containing each loan to be 

21 refinanced, which shall identify whether 

22 the loan is a private education loan or a 

23 Federal student loan made, insured, or 

24 guaranteed under title IV of the Higher 


pamtmann on DSKBFK8HB2PROD with BILLS
78 

•S 1354 IS

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

2 seq.); and 

3 ‘‘(ii) benefits that the borrower may 

4 be forfeiting, including income-driven re5 payment options, opportunities for loan 

6 forgiveness, forbearance or deferment op7 tions, interest subsidies, and tax benefits;’’. 

8 SEC. 6. KNOW BEFORE YOU OWE. 

9 (a) AMENDMENTS TO THE TRUTH IN LENDING

10 ACT.— 

11 (1) IN GENERAL.—Section 128(e) of the Truth 

12 in Lending Act (15 U.S.C. 1638(e)), as amended by 

13 sections 3 and 5, is further amended— 

14 (A) by striking paragraph (3) and insert15 ing the following: 

16 ‘‘(3) INSTITUTIONAL CERTIFICATION RE17 QUIRED.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), before a creditor may issue 

20 any funds with respect to an extension of credit 

21 described in this subsection, the creditor shall 

22 obtain from the relevant institution of higher 

23 education where such loan is to be used for a 

24 student, such institution’s certification of— 


pamtmann on DSKBFK8HB2PROD with BILLS
79 

•S 1354 IS

1 ‘‘(i) the enrollment status of the stu2 dent; 

3 ‘‘(ii) the student’s cost of attendance 

4 at the institution as determined by the in5 stitution under part F of title IV of the 

6 Higher Education Act of 1965 (20 U.S.C. 

7 1087kk et seq.); and 

8 ‘‘(iii) the difference between— 

9 ‘‘(I) such cost of attendance; and 

10 ‘‘(II) the student’s estimated fi11 nancial assistance, including such as12 sistance received under title IV of the 

13 Higher Education Act of 1965 (20 

14 U.S.C. 1070 et seq.) (except for Fed15 eral Direct PLUS Loans made on be16 half of the student) and other finan17 cial assistance known to the institu18 tion, as applicable (except for loans 

19 made under the Public Health Service 

20 Act (42 U.S.C. 201 et seq.)). 

21 ‘‘(B) EXCEPTION.—Notwithstanding sub22 paragraph (A), a creditor may issue funds, not 

23 to exceed the amount described in subpara24 graph (A)(iii), with respect to an extension of 

25 credit described in this subsection without obVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
80 

•S 1354 IS

1 taining from the relevant institution of higher 

2 education such institution’s certification if such 

3 institution fails to provide within 15 business 

4 days of the creditor’s request for such certifi5 cation— 

6 ‘‘(i) notification of the institution’s re7 fusal to certify the request; or 

8 ‘‘(ii) notification that the institution 

9 has received the request for certification 

10 and will need additional time to comply 

11 with the certification request. 

12 ‘‘(C) LOANS DISBURSED WITHOUT CER13 TIFICATION.—If a creditor issues funds without 

14 obtaining a certification, as described in sub15 paragraph (B), such creditor shall report the 

16 issuance of such funds in a manner determined 

17 by the Director.’’; and 

18 (B) by adding at the end the following: 

19 ‘‘(24) PROVISION OF INFORMATION.— 

20 ‘‘(A) PROVISION OF INFORMATION TO STU21 DENTS.— 

22 ‘‘(i) LOAN STATEMENT.—A creditor 

23 that issues any funds with respect to an 

24 extension of credit described in this sub25 section shall send loan statements, where 


pamtmann on DSKBFK8HB2PROD with BILLS
81 

•S 1354 IS

1 such loan is to be used for a student, to 

2 borrowers of such funds not less than once 

3 every 3 months during the time that such 

4 student is enrolled at an institution of 

5 higher education. 

6 ‘‘(ii) CONTENTS OF LOAN STATE7 MENT.—Each statement described in 

8 clause (i) shall— 

9 ‘‘(I) report the borrower’s total 

10 remaining debt to the creditor, includ11 ing accrued but unpaid interest and 

12 capitalized interest; 

13 ‘‘(II) report any debt increases 

14 since the last statement; and 

15 ‘‘(III) list the current interest 

16 rate for each loan. 

17 ‘‘(B) NOTIFICATION OF LOANS DISBURSED

18 WITHOUT CERTIFICATION.—On or before the 

19 date a creditor issues any funds with respect to 

20 an extension of credit described in this sub21 section, the creditor shall notify the relevant in22 stitution of higher education, in writing, of the 

23 amount of the extension of credit and the stu24 dent on whose behalf credit is extended. The 

25 form of such written notification shall be subVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
82 

•S 1354 IS

1 ject to the regulations of the Bureau of Con2 sumer Financial Protection. 

3 ‘‘(C) ANNUAL REPORT.—A creditor that 

4 issues funds with respect to an extension of 

5 credit described in this subsection shall prepare 

6 and submit an annual report to the Bureau of 

7 Consumer Financial Protection containing the 

8 required information about private student 

9 loans to be determined by the Bureau of Con10 sumer Financial Protection, in consultation 

11 with the Secretary.’’. 

12 (2) DEFINITION OF PRIVATE EDUCATION

13 LOAN.—Section 140(a)(8)(A) of the Truth in Lend14 ing Act (15 U.S.C. 1650(a)(8)(A)) is amended— 

15 (A) by redesignating clause (ii) as clause 

16 (iii); 

17 (B) in clause (i), by striking ‘‘and’’ after 

18 the semicolon; and 

19 (C) by adding after clause (i) the following: 

20 ‘‘(ii) is not made, insured, or guaran21 teed under title VII or title VIII of the 

22 Public Health Service Act (42 U.S.C. 292 

23 et seq. and 296 et seq.); and’’. 

24 (3) REGULATIONS.—Not later than 365 days 

25 after the date of enactment of this Act, the Director 


pamtmann on DSKBFK8HB2PROD with BILLS
83 

•S 1354 IS

1 of the Bureau of Consumer Financial Protection 

2 shall issue regulations in final form to implement 

3 paragraphs (3) and (23) of section 128(e) of the 

4 Truth in Lending Act (15 U.S.C. 1638(e)), as 

5 amended by paragraph (1). Such regulations shall 

6 become effective not later than 6 months after their 

7 date of issuance. 

8 (b) AMENDMENTS TO THE HIGHER EDUCATION ACT

9 OF 1965.— 

10 (1) PROGRAM PARTICIPATION AGREEMENTS.— 

11 Section 487(a) of the Higher Education Act of 1965 

12 (20 U.S.C. 1094(a)) is amended by striking para13 graph (28) and inserting the following: 

14 ‘‘(28)(A) Upon the request of a private edu15 cational lender, acting in connection with an applica16 tion initiated by a borrower for a private education 

17 loan in accordance with section 128(e)(3) of the 

18 Truth in Lending Act (15 U.S.C. 1638(e)(3)), the 

19 institution shall within 15 days of receipt of a cer20 tification request— 

21 ‘‘(i) provide such certification to such pri22 vate educational lender— 

23 ‘‘(I) that the student who initiated the 

24 application for the private education loan, 

25 or on whose behalf the application was iniVerDate Sep 11 2014 23:22 May 11, 2019 Jkt 089200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

pamtmann on DSKBFK8HB2PROD with BILLS
84 

•S 1354 IS

1 tiated, is enrolled or is scheduled to enroll 

2 at the institution; 

3 ‘‘(II) of such student’s cost of attend4 ance at the institution as determined under 

5 part F of this title; and 

6 ‘‘(III) of the difference between— 

7 ‘‘(aa) the cost of attendance at 

8 the institution; and 

9 ‘‘(bb) the student’s estimated fi10 nancial assistance received under this 

11 title (except for Federal Direct PLUS 

12 Loans made on behalf of the student) 

13 and other assistance known to the in14 stitution, as applicable (except for 

15 loans made under the Public Health 

16 Service Act (42 U.S.C. 201 et seq.)); 

17 ‘‘(ii) notify the creditor that the institution 

18 has received the request for certification and 

19 will need additional time to comply with the 

20 certification request; or 

21 ‘‘(iii) provide notice to the private edu22 cational lender of the institution’s refusal to 

23 certify the private education loan under sub24 paragraph (D). 


pamtmann on DSKBFK8HB2PROD with BILLS
85 

•S 1354 IS

1 ‘‘(B) With respect to a certification request de2 scribed in subparagraph (A), and prior to providing 

3 such certification under subparagraph (A)(i) or pro4 viding notice of the refusal to provide certification 

5 under subparagraph (A)(iii), the institution shall— 

6 ‘‘(i) determine whether the student who 

7 initiated the application for the private edu8 cation loan, or on whose behalf the application 

9 was initiated, has applied for and exhausted the 

10 Federal financial assistance available to such 

11 student under this title and inform the student 

12 accordingly; and 

13 ‘‘(ii) provide the borrower whose loan ap14 plication has prompted the certification request 

15 by a private educational lender, as described in 

16 subparagraph (A)(i), with the following infor17 mation and disclosures: 

18 ‘‘(I) The availability of, and the bor19 rower’s potential eligibility for, Federal fi20 nancial assistance under this title, includ21 ing disclosing the terms, conditions, inter22 est rates, and repayment options and pro23 grams of Federal student loans. 


pamtmann on DSKBFK8HB2PROD with BILLS
86 

•S 1354 IS

1 ‘‘(II) The borrower’s ability to select a 

2 private educational lender of the bor3 rower’s choice. 

4 ‘‘(III) The impact of a proposed pri5 vate education loan on the borrower’s po6 tential eligibility for other financial assist7 ance, including Federal financial assistance 

8 under this title. 

9 ‘‘(IV) The borrower’s right to accept 

10 or reject a private education loan within 

11 the 30-day period following a private edu12 cational lender’s approval of a borrower’s 

13 application and about a borrower’s 3-day 

14 right to cancel period. 

15 ‘‘(C) For purposes of this paragraph, the terms 

16 ‘private educational lender’ and ‘private education 

17 loan’ have the meanings given such terms in section 

18 140 of the Truth in Lending Act (15 U.S.C. 1650). 

19 ‘‘(D)(i) An institution shall not provide a cer20 tification with respect to a private education loan 

21 under this paragraph unless the private education 

22 loan includes terms that provide— 

23 ‘‘(I) the borrower alternative repayment 

24 options, including loan consolidation or refi25 nancing; and 


pamtmann on DSKBFK8HB2PROD with BILLS
87 

•S 1354 IS

1 ‘‘(II) for the discharge of the borrower and 

2 co-borrower’s, if applicable, liability to repay 

3 the loan pursuant to paragraphs (19) and (20) 

4 of section 128(e) of the Truth in Lending Act 

5 (15 U.S.C. 1638(e)). 

6 ‘‘(ii) In this paragraph, the term ‘disability’ 

7 means a permanent and total disability, as deter8 mined in accordance with the regulations of the Sec9 retary of Education, or a determination by the Sec10 retary of Veterans Affairs that the borrower is un11 employable due to a service connected-disability.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by paragraph (1) shall take effect on the effective 

14 date of the regulations described in subsection 

15 (a)(3). 

16 (3) PREFERRED LENDER ARRANGEMENT.—Sec17 tion 151(8)(A)(ii) of the Higher Education Act of 

18 1965 (20 U.S.C. 1019(8)(A)(ii)) is amended by in19 serting ‘‘certifying,’’ after ‘‘promoting,’’. 

20 (c) REPORT.— 

21 (1) IN GENERAL.—Not later than 24 months 

22 after the issuance of regulations under subsection 

23 (a)(3), the Director of the Bureau of Consumer Fi24 nancial Protection and the Secretary of Education 


pamtmann on DSKBFK8HB2PROD with BILLS
88 

•S 1354 IS

1 shall jointly submit to Congress a report on the com2 pliance of— 

3 (A) private educational lenders with sec4 tion 128(e)(3) of the Truth in Lending Act (15 

5 U.S.C. 1638(e)), as amended by subsection (a); 

6 and 

7 (B) institutions of higher education with 

8 section 487(a)(28) of the Higher Education Act 

9 of 1965 (20 U.S.C. 1094(a)), as amended by 

10 subsection (b). 

11 (2) CONTENTS.—The report under paragraph 

12 (1) shall include information about the degree to 

13 which specific institutions utilize certifications in ef14 fectively— 

15 (A) encouraging the exhaustion of Federal 

16 student loan eligibility by borrowers prior to 

17 taking on private education loan debt; and 

18 (B) lowering student private education 

19 loan debt by borrowers. 

20 SEC. 7. CENTRALIZED POINT OF ACCESS. 

21 Part G of title IV of the Higher Education Act of 

22 1965 (20 U.S.C. 1088 et seq.) is amended by adding at 

23 the end the following: 


pamtmann on DSKBFK8HB2PROD with BILLS
89 

•S 1354 IS

1 ‘‘SEC. 493E. CENTRALIZED POINT OF ACCESS. 

2 ‘‘Not later than 2 years after the date of enactment 

3 of the Student Loan Borrower Bill of Rights, the Sec4 retary shall establish a centralized point of access for all 

5 borrowers of loans that are made, insured, or guaranteed 

6 under this title that are in repayment, including a central 

7 location for account information and payment processing 

8 for such loan servicing, regardless of the specific entity 

9 engaged in servicing.’’. 

10 SEC. 8. EDUCATION LOAN OMBUDSMAN. 

11 Section 1035 of the Consumer Financial Protection 

12 Act of 2010 (12 U.S.C. 5535) is amended— 

13 (1) in the section heading, by striking ‘‘PRI14 VATE’’; 

15 (2) in subsection (a)— 

16 (A) by striking ‘‘a Private’’ and inserting 

17 ‘‘an’’; and 

18 (B) by striking ‘‘private’’; 

19 (3) in subsection (b), by striking ‘‘private edu20 cation student loan’’ and inserting ‘‘postsecondary 

21 education loan’’; 

22 (4) in subsection (c)— 

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

24 by striking ‘‘subsection’’ and inserting ‘‘sec25 tion’’; 


pamtmann on DSKBFK8HB2PROD with BILLS
90 

•S 1354 IS

1 (B) in paragraph (1), by striking ‘‘pri2 vate’’; 

3 (C) by striking paragraph (2) and insert4 ing the following: 

5 ‘‘(2) coordinate with the unit of the Bureau es6 tablished under section 1013(b)(3), in order to mon7 itor complaints by borrowers and responses to those 

8 complaints by the Bureau or other appropriate Fed9 eral or State agency;’’; and 

10 (D) in paragraph (3), by striking ‘‘pri11 vate’’; 

12 (5) in subsection (d)— 

13 (A) in paragraph (2)— 

14 (i) by striking ‘‘on the same day an15 nually’’; and 

16 (ii) by inserting ‘‘and be made avail17 able to the public’’ after ‘‘Representa18 tives’’; and 

19 (B) by adding at the end the following: 

20 ‘‘(3) CONTENTS.—The report required under 

21 paragraph (1) shall include information on the num22 ber, nature, and resolution of complaints received, 

23 disaggregated by postsecondary educational lender 

24 or servicer, region, State, and institution of higher 

25 education.’’; and 


pamtmann on DSKBFK8HB2PROD with BILLS
91 

•S 1354 IS

1 (6) by striking subsection (e) and inserting the 

2 following: 

3 ‘‘(e) DEFINITIONS.—In this section: 

4 ‘‘(1) BORROWER.—The term ‘borrower’ means 

5 a borrower of a postsecondary education loan. 

6 ‘‘(2) INSTITUTION OF HIGHER EDUCATION.— 

7 The term ‘institution of higher education’ has the 

8 meaning given the term in section 140 of the Truth 

9 in Lending Act (15 U.S.C. 1650). 

10 ‘‘(3) POSTSECONDARY EDUCATION LOAN.—The 

11 term ‘postsecondary education loan’ means— 

12 ‘‘(A) a private education loan, as defined 

13 in section 140 of the Truth in Lending Act (15 

14 U.S.C. 1650); or 

15 ‘‘(B) a loan made, insured, or guaranteed 

16 under part B, D, or E of title IV of the Higher 

17 Education Act of 1965 (20 U.S.C. 1071 et seq., 

18 1087a et seq., and 1087aa et seq.).’’. 

19 SEC. 9. REPORT ON PRIVATE EDUCATION LOANS AND PRI20 VATE EDUCATIONAL LENDERS. 

21 (a) IN GENERAL.—Not later than 2 years after the 

22 date of enactment of this Act, the Director of the Bureau 

23 of Consumer Financial Protection and the Secretary of 

24 Education, in consultation with the Commissioners of the 

25 Federal Trade Commission and the Attorney General of 


pamtmann on DSKBFK8HB2PROD with BILLS
92 

•S 1354 IS

1 the United States, shall submit a report to the Committee 

2 on Banking, Housing, and Urban Affairs of the Senate, 

3 the Committee on Health, Education, Labor, and Pen4 sions of the Senate, the Committee on Financial Services 

5 of the House of Representatives, and the Committee on 

6 Education and Labor of the House of Representatives on 

7 private education loans (as that term is defined in section 

8 140 of the Truth in Lending Act (15 U.S.C. 1650)) and 

9 private educational lenders (as that term is defined in such 

10 section). 

11 (b) CONTENTS.—The report required by this section 

12 shall examine, at a minimum— 

13 (1) the growth and changes of the private edu14 cation loan market in the United States; 

15 (2) factors influencing such growth and 

16 changes; 

17 (3) the extent to which students and parents of 

18 students rely on private education loans to finance 

19 postsecondary education and the private education 

20 loan indebtedness of borrowers; 

21 (4) the characteristics of private education loan 

22 borrowers, including— 

23 (A) the types of institutions of higher edu24 cation that they attend; 


pamtmann on DSKBFK8HB2PROD with BILLS
93 

•S 1354 IS

1 (B) socioeconomic characteristics (includ2 ing income and education levels, racial charac3 teristics, geographical background, age, and 

4 gender); 

5 (C) what other forms of financing bor6 rowers use to pay for education; 

7 (D) whether they exhaust their Federal 

8 loan options before taking out a private edu9 cation loan; 

10 (E) whether such borrowers are dependent 

11 or independent students (as determined under 

12 part F of title IV of the Higher Education Act 

13 of 1965 (20 U.S.C. 1087kk et seq.)) or parents 

14 of such students; 

15 (F) whether such borrowers are students 

16 enrolled in a program leading to a certificate, li17 cense, or credential other than a degree, an as18 sociates degree, a baccalaureate degree, or a 

19 graduate or professional degree; and 

20 (G) if practicable, employment and repay21 ment behaviors; 

22 (5) the characteristics of private educational 

23 lenders, including whether such creditors are for24 profit, nonprofit, or institutions of higher education; 


pamtmann on DSKBFK8HB2PROD with BILLS
94 

•S 1354 IS

1 (6) the underwriting criteria used by private 

2 educational lenders, including the use of cohort de3 fault rate (as such term is defined in section 435(m) 

4 of the Higher Education Act of 1965 (20 U.S.C. 

5 1085(m))); 

6 (7) the terms, conditions, and pricing of private 

7 education loans; 

8 (8) the consumer protections available to pri9 vate education loan borrowers, including the effec10 tiveness of existing disclosures and requirements and 

11 borrowers’ awareness and understanding about 

12 terms and conditions of various financial products; 

13 (9) whether Federal regulators and the public 

14 have access to information sufficient to provide them 

15 with assurances that private education loans are 

16 provided in accord with the Nation’s fair lending 

17 laws and that allows public officials to determine 

18 lender compliance with fair lending laws; and 

19 (10) any statutory or legislative recommenda20 tions necessary to improve consumer protections for 

21 private education loan borrowers and to better en22 able Federal regulators and the public to ascertain 

23 private educational lender compliance with fair lend24 ing laws. 


pamtmann on DSKBFK8HB2PROD with BILLS
95 

•S 1354 IS

1 SEC. 10. REPORT ON POSTSECONDARY EDUCATION LOAN 

2 SERVICING. 

3 Not later than 1 year after the date of enactment 

4 of this Act, the Director of the Bureau of Consumer Fi5 nancial Protection and the Secretary of Education shall 

6 submit a joint report to the Committee on Banking, Hous7 ing, and Urban Affairs of the Senate, the Committee on 

8 Health, Education, Labor, and Pensions of the Senate, the 

9 Committee on Financial Services of the House of Rep10 resentatives, and the Committee on Education and Labor 

11 of the House of Representatives on servicing of postsec12 ondary education loans, including— 

13 (1) any legislative recommendations to improve 

14 servicing standards; and 

15 (2) information on proactive early intervention 

16 methods by postsecondary educational lenders or 

17 servicers to help distressed postsecondary education 

18 loan borrowers enroll in any eligible repayment 

19 plans. 

Æ 


pamtmann on DSKBFK8HB2PROD with BILLS