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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 840 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 840

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

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 23, 2015

   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.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. TRUTH IN LENDING ACT AMENDMENTS.

    The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 128 (15 U.S.C. 1638)--
                    (A) in subsection (e)--
                            (i) in the subsection heading, by striking 
                        ``Private'';
                            (ii) in paragraph (1)(O), by striking 
                        ``paragraph (6)'' and inserting ``paragraph 
                        (9)'';
                            (iii) in paragraph (2)(L), by striking 
                        ``paragraph (6)'' and inserting ``paragraph 
                        (9)'';
                            (iv) in paragraph (4)(C), by striking 
                        ``paragraph (7)'' and inserting ``paragraph 
                        (10)'';
                            (v) by redesignating paragraphs (5) through 
                        (11) as paragraphs (8) through (14), 
                        respectively;
                            (vi) by inserting after paragraph (4) the 
                        following:
            ``(5) Disclosures before first fully amortized payment.--
        Not fewer than 30 days and not more than 150 days before the 
        first fully amortized payment on a postsecondary education loan 
        is due from the borrower, the postsecondary educational lender 
        shall disclose to the borrower, clearly and conspicuously--
                    ``(A) the information described in--
                            ``(i) paragraph (2)(A) (adjusted, as 
                        necessary, for the rate of interest in effect 
                        on the date the first fully amortized payment 
                        on a postsecondary education loan is due);
                            ``(ii) subparagraphs (B) through (G) of 
                        paragraph (2);
                            ``(iii) paragraph (2)(H) (adjusted, as 
                        necessary, for the rate of interest in effect 
                        on the date the first fully amortized payment 
                        on a postsecondary education loan is due);
                            ``(iv) paragraph (2)(K); and
                            ``(v) subparagraphs (O) and (P) of 
                        paragraph (2);
                    ``(B) the scheduled date upon which the first fully 
                amortized payment is due;
                    ``(C) the name of the lender and servicer, and the 
                address to which communications and payments should be 
                sent including a telephone number and website where the 
                borrower may obtain additional information;
                    ``(D) a description of alternative repayment plans, 
                including loan consolidation or refinancing, and 
                servicemember or veteran benefits under the 
                Servicemembers Civil Relief Act (50 U.S.C. App. 501 et 
                seq.) or other Federal or State law related to 
                postsecondary education loans; and
                    ``(E) a statement that a Servicemember and Veterans 
                Liaison designated under paragraph (15)(I) is available 
                to answer inquiries about servicemember and veteran 
                benefits related to postsecondary education loans, 
                including the toll-free telephone number to contact the 
                Liaison pursuant to paragraph (15)(I).
            ``(6) Disclosures when borrower is 30 days delinquent.--Not 
        fewer than 5 days after a borrower becomes 30 days delinquent 
        on a postsecondary education loan, the postsecondary 
        educational lender shall disclose to the borrower, clearly and 
        conspicuously--
                    ``(A) the date on which the loan will be charged-
                off (as defined in paragraph (15)(A)) or assigned to 
                collections, including the consequences of such charge-
                off or assignment to collections, if no payment is 
                made;
                    ``(B) the minimum payment that the borrower must 
                make to avoid the loan being charged off (as defined in 
                paragraph (15)(A)) or assigned to collection, and the 
                minimum payment that the borrower must make to bring 
                the loan current;
                    ``(C) a statement informing the borrower that a 
                payment of less than the minimum payment described in 
                subparagraph (B) could result in the loan being charged 
                off (as defined in paragraph (15)(A)) or assigned to 
                collection; and
                    ``(D) a statement that a Servicemember and Veterans 
                Liaison designated under paragraph (15)(I) is available 
                to answer inquiries about servicemember and veteran 
                benefits related to postsecondary education loans, 
                including the toll-free telephone number to contact the 
                Liaison pursuant to paragraph (15)(I).
            ``(7) Disclosures when borrower is having difficulty making 
        payment or is 60 days delinquent.--
                    ``(A) In general.--Not fewer than 5 days after a 
                borrower notifies a postsecondary educational lender 
                that the borrower is having difficulty making payment 
                or a borrower becomes 60 days delinquent on a 
                postsecondary education loan, the postsecondary 
                educational lender shall--
                            ``(i) complete a full review of the 
                        borrower's postsecondary education loan and 
                        make a reasonable effort to obtain the 
                        information necessary to determine--
                                    ``(I) if the borrower is eligible 
                                for an alternative repayment plan, 
                                including loan consolidation or 
                                refinancing; and
                                    ``(II) if the borrower is eligible 
                                for servicemember or veteran benefits 
                                under the Servicemembers Civil Relief 
                                Act (50 U.S.C. App. 501 et seq.) or 
                                other Federal or State law related to 
                                postsecondary education loans;
                            ``(ii) provide the borrower, in writing, in 
                        simple and understandable terms, information 
                        about alternative repayment plans and benefits 
                        for which the borrower is eligible, including 
                        all terms, conditions, and fees or costs 
                        associated with such repayment plan, pursuant 
                        to paragraph (8)(D);
                            ``(iii) allow the borrower not less than 30 
                        days to apply for an alternative repayment plan 
                        or benefits, if eligible; and
                            ``(iv) notify the borrower that a 
                        Servicemember and Veterans Liaison designated 
                        under paragraph (15)(I) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits related to postsecondary education 
                        loans, including the toll-free telephone number 
                        to contact the Liaison pursuant to paragraph 
                        (15)(I).
                    ``(B) Forbearance or deferment.--If a borrower 
                notifies the postsecondary educational lender that a 
                long-term alternative repayment plan is not 
                appropriate, the postsecondary educational lender may 
                comply with this paragraph by providing the borrower, 
                in writing, in simple and understandable terms, 
                information about short-term options to address an 
                anticipated short-term difficulty in making payments, 
                such as forbearance or deferment options, including all 
                terms, conditions, and fees or costs associated with 
                such options pursuant to paragraph (8)(D).
                    ``(C) Notification process.--
                            ``(i) In general.--Each postsecondary 
                        educational lender shall establish a process, 
                        in accordance subparagraph (A), for a borrower 
                        to notify the lender that--
                                    ``(I) the borrower is having 
                                difficulty making payments on a 
                                postsecondary education loan; and
                                    ``(II) a long-term alternative 
                                repayment plan is not needed.
                            ``(ii) Consumer financial protection bureau 
                        requirements.--The Director of the Bureau of 
                        Consumer Financial Protection, in consultation 
                        with the Secretary of Education, shall 
                        promulgate rules establishing minimum standards 
                        for postsecondary educational lenders in 
                        carrying out the requirements of this paragraph 
                        and a model form for borrowers to notify 
                        postsecondary educational lenders of the 
                        information under this paragraph.'';
                            (vii) in paragraph (8), as redesignated by 
                        clause (v), by adding at the end the following:
                    ``(D) Model disclosure form for alternative 
                repayment plans, forbearance, and deferment options.--
                Not later than 2 years after the date of enactment of 
                the Student Loan Borrower Bill of Rights, the Director 
                of the Bureau of Consumer Financial Protection, in 
                consultation with the Secretary of Education, shall 
                develop and issue model forms to allow borrowers to 
                compare alternative repayment plans, forbearance, and 
                deferment options with the borrower's existing 
                repayment plan with respect to a postsecondary 
                education loan. Such forms shall include the following:
                            ``(i) The total amount to be paid over the 
                        life of the loan.
                            ``(ii) The total amount in interest to be 
                        paid over the life of the loan.
                            ``(iii) The monthly payment amount.
                            ``(iv) The expected pay-off date.
                            ``(v) Related fees and costs.
                            ``(vi) Eligibility requirements, and how 
                        the borrower can apply for the alternative 
                        repayment plan, forbearance, or deferment 
                        option.
                            ``(vii) Any relevant consequences due to 
                        action or inaction, such as default, including 
                        any actions that would result in the loss of 
                        eligibility for alternative repayment plans, 
                        forbearance, or deferment options.'';
                            (viii) in paragraph (11), as redesignated 
                        by clause (v), by striking ``paragraph (7)'' 
                        and inserting ``paragraph (10)'';
                            (ix) by striking paragraph (13), as 
                        redesignated by clause (v), and inserting the 
                        following:
            ``(13) Definitions.--In this subsection--
                    ``(A) the terms `covered educational institution', 
                `private educational lender', and `private education 
                loan' have the same meanings as in section 140; and
                    ``(B) the term `postsecondary education loan' 
                means--
                            ``(i) a private education loan; or
                            ``(ii) a loan made, insured, or guaranteed 
                        under part B, D, or E of title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1071 et seq., 
                        1087a et seq., and 1087aa et seq.).'';
                            (x) in paragraph (14), as redesignated by 
                        clause (v), by striking ``paragraph (5)'' and 
                        inserting ``paragraph (8)''; and
                            (xi) by adding at the end the following:
            ``(15) Student loan borrower bill of rights.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Borrower.--The term `borrower' means 
                        the person to whom a postsecondary education 
                        loan is extended.
                            ``(ii) Charge off.--The term `charge off' 
                        means charge to profit and loss, or subject to 
                        any similar action.
                            ``(iii) Qualified written request.--
                                    ``(I) In general.--The term 
                                `qualified written request' means a 
                                written correspondence of a borrower 
                                (other than notice on a payment medium 
                                supplied by the student loan servicer) 
                                transmitted by mail, facsimile, or 
                                electronically through an email address 
                                or website designated by the student 
                                loan servicer to receive communications 
                                from borrowers that--
                                            ``(aa) includes, or 
                                        otherwise enables the student 
                                        loan servicer to identify, the 
                                        name and account of the 
                                        borrower; and
                                            ``(bb) includes, to the 
                                        extent applicable--

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

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

                                    ``(II) Correspondence delivered to 
                                other addresses.--
                                            ``(aa) In general.--A 
                                        written correspondence of a 
                                        borrower is a qualified written 
                                        request if the written 
                                        correspondence is transmitted 
                                        to and received by a student 
                                        loan servicer at a mailing 
                                        address, facsimile number, 
                                        email address, or website 
                                        address other than the address 
                                        or number designated by that 
                                        student loan servicer to 
                                        receive communications from 
                                        borrowers but the written 
                                        correspondence meets the 
                                        requirements under items (aa) 
                                        and (bb) of subclause (I).
                                            ``(bb) Duty to transfer.--A 
                                        student loan servicer shall, 
                                        within a reasonable period of 
                                        time, transfer a written 
                                        correspondence of a borrower 
                                        received by the student loan 
                                        servicer at a mailing address, 
                                        facsimile number, email 
                                        address, or website address 
                                        other than the address or 
                                        number designated by that 
                                        student loan servicer to 
                                        receive communications from 
                                        borrowers to the correct 
                                        address or appropriate office 
                                        or other unit of the student 
                                        loan servicer.
                                            ``(cc) Date of receipt.--A 
                                        written correspondence of a 
                                        borrower transferred in 
                                        accordance with item (bb) shall 
                                        be deemed to be received by the 
                                        student loan servicer on the 
                                        date on which the written 
                                        correspondence is transferred 
                                        to the correct address or 
                                        appropriate office or other 
                                        unit of the student loan 
                                        servicer.
                            ``(iv) Servicer.--The term `servicer' means 
                        the person responsible for the servicing of a 
                        postsecondary education loan, including any 
                        agent of such person or the person who makes, 
                        owns, or holds a loan if such person also 
                        services the loan.
                            ``(v) Servicing.--The term `servicing' 
                        means--
                                    ``(I) receiving any scheduled 
                                periodic payments from a borrower 
                                pursuant to the terms of a 
                                postsecondary education loan;
                                    ``(II) making the payments of 
                                principal and interest and such other 
                                payments with respect to the amounts 
                                received from the borrower, as may be 
                                required pursuant to the terms of the 
                                loan; and
                                    ``(III) performing other 
                                administrative services with respect to 
                                the loan.
                    ``(B) Sale, transfer, or assignment.--If the sale, 
                other transfer, assignment, or transfer of servicing 
                obligations of a postsecondary education loan results 
                in a change in the identity of the party to whom the 
                borrower must send subsequent payments or direct any 
                communications concerning the loan--
                            ``(i) the transferor shall--
                                    ``(I) notify the borrower, in 
                                writing, in simple and understandable 
                                terms, not fewer than 45 days before 
                                transferring a legally enforceable 
                                right to receive payment from the 
                                borrower on such loan, of--
                                            ``(aa) the sale or other 
                                        transfer, assignment, or 
                                        transfer of servicing 
                                        obligations;
                                            ``(bb) the identity of the 
                                        transferee;
                                            ``(cc) the name and address 
                                        of the party to whom subsequent 
                                        payments or communications must 
                                        be sent;
                                            ``(dd) the telephone 
                                        numbers and websites of both 
                                        the transferor and the 
                                        transferee;
                                            ``(ee) the effective date 
                                        of the sale, transfer, or 
                                        assignment;
                                            ``(ff) the date on which 
                                        the transferor will stop 
                                        accepting payment; and
                                            ``(gg) the date on which 
                                        the transferee will begin 
                                        accepting payment; and
                                    ``(II) forward any payment from a 
                                borrower with respect to such 
                                postsecondary education loan to the 
                                transferee, immediately upon receiving 
                                such payment, during the 60-day period 
                                beginning on the date on which the 
                                transferor stops accepting payment of 
                                such postsecondary education loan; and
                            ``(ii) the transferee shall--
                                    ``(I) notify the borrower, in 
                                writing, in simple and understandable 
                                terms, not fewer than 45 days before 
                                acquiring a legally enforceable right 
                                to receive payment from the borrower on 
                                such loan, of--
                                            ``(aa) the sale or other 
                                        transfer, assignment, or 
                                        transfer of servicing 
                                        obligations;
                                            ``(bb) the identity of the 
                                        transferor:
                                            ``(cc) the name and address 
                                        of the party to whom subsequent 
                                        payments or communications must 
                                        be sent;
                                            ``(dd) the telephone 
                                        numbers and websites of both 
                                        the transferor and the 
                                        transferee;
                                            ``(ee) the effective date 
                                        of the sale, transfer, 
                                        assignment, or transfer of 
                                        servicing obligations;
                                            ``(ff) the date on which 
                                        the transferor will stop 
                                        accepting payment; and
                                            ``(gg) the date on which 
                                        the transferee will begin 
                                        accepting payment;
                                    ``(II) accept as on-time and may 
                                not impose any late fee or finance 
                                charge for any payment from a borrower 
                                with respect to such postsecondary 
                                education loan that is forwarded from 
                                the transferor during the 60-day period 
                                beginning on the date on which the 
                                transferor stops accepting payment, if 
                                the transferor receives such payment on 
                                or before the applicable due date, 
                                including any grace period;
                                    ``(III) provide borrowers a simple, 
                                online process for transferring 
                                existing electronic fund transfer 
                                authority; and
                                    ``(IV) honor any promotion or 
                                benefit offered to the borrower or 
                                advertised by the previous owner or 
                                transferor of such postsecondary 
                                education loan.
                    ``(C) Material change in mailing address or 
                procedure for handling payments.--If a servicer makes a 
                change in the mailing address, office, or procedures 
                for handling payments with respect to any postsecondary 
                education loan, and such change causes a delay in the 
                crediting of the account of the borrower made during 
                the 60-day period following the date on which such 
                change took effect, the servicer may not impose any 
                late fee or finance charge for a late payment on such 
                postsecondary education loan.
                    ``(D) Application of payments.--
                            ``(i) In general.--Unless otherwise 
                        directed by the borrower of a postsecondary 
                        education loan, upon receipt of a payment, the 
                        servicer shall apply amounts first to the 
                        interest and fees owed on the payment due date, 
                        and then to the principal balance of the 
                        postsecondary education loan bearing the 
                        highest annual percentage rate, and then to 
                        each successive interest and fees and then 
                        principal balance bearing the next highest 
                        annual percentage rate, until the payment is 
                        exhausted. A borrower may instruct or expressly 
                        authorize the servicer to apply payments in a 
                        different manner.
                            ``(ii) Application of excess amounts.--
                        Unless otherwise directed by the borrower of a 
                        postsecondary education loan, upon receipt of a 
                        payment, the servicer shall apply amounts in 
                        excess of the minimum payment amount first to 
                        the interest and fees owed on the payment due 
                        date, and then to the principal balance of the 
                        postsecondary education loan balance bearing 
                        the highest annual percentage rate, and then to 
                        each successive interest and fees and principal 
                        balance bearing the next highest annual 
                        percentage rate, until the payment is 
                        exhausted. A borrower may instruct or expressly 
                        authorize the servicer to apply such excess 
                        payments in a different manner. A borrower may 
                        also voluntarily increase the periodic payment 
                        amount, including by increasing their recurring 
                        electronic payment, with the right to return to 
                        their original amortization schedule at any 
                        time. Servicers shall provide a simple, online 
                        method to allow borrowers to make voluntary 
                        one-time additional payments, voluntarily 
                        increase the amount of their periodic payment, 
                        and return to their original amortization 
                        schedule.
                            ``(iii) Apply payment on date received.--
                        Unless otherwise directed by the borrower of a 
                        postsecondary education loan, a servicer shall 
                        apply payments to a borrower's account on the 
                        date the payment is received.
                            ``(iv) Promulgation of rules.--The Director 
                        of the Bureau of Consumer Financial Protection, 
                        in consultation with the Secretary of 
                        Education, may promulgate rules for the 
                        application of postsecondary education loan 
                        payments that--
                                    ``(I) implements the requirements 
                                in this section;
                                    ``(II) minimizes the amount of fees 
                                and interest incurred by the borrower 
                                and the total loan amount paid by the 
                                borrower;
                                    ``(III) minimizes delinquencies, 
                                assignments to collection, and charge-
                                offs;
                                    ``(IV) requires servicers to apply 
                                payments on the date received; and
                                    ``(V) allows the borrower to 
                                instruct the servicer to apply payments 
                                in a manner preferred by the borrower, 
                                including excess payments.
                            ``(v) Method that best benefits borrower.--
                        In promulgating the rules under clause (iv), 
                        the Director of the Bureau of Consumer 
                        Financial Protection shall choose the 
                        application method that best benefits the 
                        borrower and is compatible with existing 
                        repayment options.
                    ``(E) Late fees.--
                            ``(i) In general.--A late fee may not be 
                        charged to a borrower for a postsecondary 
                        education loan under any of the following 
                        circumstances, either individually or in 
                        combination:
                                    ``(I) On a per-loan basis when a 
                                borrower has multiple postsecondary 
                                education loans in a billing group.
                                    ``(II) In an amount greater than 4 
                                percent of the amount of the payment 
                                past due.
                                    ``(III) Before the end of the 15-
                                day period beginning on the date the 
                                payment is due.
                                    ``(IV) More than once with respect 
                                to a single late payment.
                                    ``(V) The borrower fails to make a 
                                singular, non-successive regularly-
                                scheduled payment on the postsecondary 
                                education loan.
                            ``(ii) Coordination with subsequent late 
                        fees.--No late fee may be charged to a borrower 
                        for a postsecondary education loan relating to 
                        an insufficient payment if the payment is made 
                        on or before the due date of the payment, or 
                        within any applicable grace period for the 
                        payment, if the insufficiency is attributable 
                        only to a late fee relating to an earlier 
                        payment, and the payment is otherwise a full 
                        payment for the applicable period.
                    ``(F) Rehabilitation of loans.--If a borrower of a 
                private education loan successfully and voluntarily 
                makes 9 payments within 20 days of the due date during 
                10 consecutive months of amounts owed on the private 
                education loan, or otherwise brings the private 
                education loan current after the loan is charged-off, 
                the loan shall be considered rehabilitated, and the 
                lender or servicer shall request that any consumer 
                reporting agency to which the charge-off was reported 
                remove the delinquency that led to the charge-off and 
                the charge-off from the borrower's credit history.
                    ``(G) Borrower inquiries.--
                            ``(i) Duty of student loan servicers to 
                        respond to borrower inquiries.--
                                    ``(I) Notice of receipt of 
                                request.--If a borrower of a 
                                postsecondary education loan submits a 
                                qualified written request to the 
                                student loan servicer for information 
                                relating to the student loan servicing 
                                of the postsecondary education loan, 
                                the student loan servicer shall provide 
                                a written response acknowledging 
                                receipt of the qualified written 
                                request within 5 business days unless 
                                any action requested by the borrower is 
                                taken within such period.
                                    ``(II) Action with respect to 
                                inquiry.--Not later than 30 business 
                                days after the receipt from a borrower 
                                of a qualified written request under 
                                subclause (I) and, if applicable, 
                                before taking any action with respect 
                                to the qualified written request of the 
                                borrower, the student loan servicer 
                                shall--
                                            ``(aa) make appropriate 
                                        corrections in the account of 
                                        the borrower, including the 
                                        crediting of any late fees, and 
                                        transmit to the borrower a 
                                        written notification of such 
                                        correction (which shall include 
                                        the name and toll-free or 
                                        collect-call telephone number 
                                        of a representative of the 
                                        student loan servicer who can 
                                        provide assistance to the 
                                        borrower);
                                            ``(bb) after conducting an 
                                        investigation, provide the 
                                        borrower with a written 
                                        explanation or clarification 
                                        that includes--

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

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

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

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

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

                                    ``(III) Limited extension of 
                                response time.--
                                            ``(aa) In general.--There 
                                        may be 1 extension of the 30-
                                        day period described in 
                                        subclause (II) of not more than 
                                        15 days if, before the end of 
                                        such 30-day period, the student 
                                        loan servicer notifies the 
                                        borrower of the extension and 
                                        the reasons for the delay in 
                                        responding.
                                            ``(bb) Reports to bureau.--
                                        Each student loan servicer 
                                        shall, on an annual basis, 
                                        report to the Bureau the 
                                        aggregate number of extensions 
                                        sought by the student loan 
                                        servicer under item (aa).
                            ``(ii) Protection of credit information.--
                        During the 60-day period beginning on the date 
                        on which a student loan servicer receives a 
                        qualified written request from a borrower 
                        relating to a dispute regarding payments by the 
                        borrower, a student loan servicer may not 
                        provide negative credit information to any 
                        consumer reporting agency (as defined in 
                        section 603 of the Fair Credit Reporting Act 
                        (15 U.S.C. 1681a)) relating to the subject of 
                        the qualified written request or to such 
                        period, including any information relating to a 
                        late payment or payment owed by the borrower on 
                        the borrower's postsecondary education loan.
                    ``(H) Single point of contact for certain 
                borrowers.--A student loan servicer shall designate an 
                office or other unit of the student loan servicer to 
                act as a point of contact regarding postsecondary 
                education loans for--
                            ``(i) a borrower who is not less than 60 
                        days delinquent under the postsecondary 
                        education loan;
                            ``(ii) a borrower who seeks information 
                        regarding, seeks to enter an agreement for, or 
                        seeks to resolve an issue under a repayment 
                        option that requires subsequent submission of 
                        supporting documentation; and
                            ``(iii) a borrower who seeks to modify the 
                        terms of the repayment of the postsecondary 
                        education loan because of hardship.
                    ``(I) Servicemembers, veterans, and postsecondary 
                education loans.--
                            ``(i) Servicemember and veterans liaison.--
                        Each servicer shall designate an employee to 
                        act as the servicemember and veterans liaison 
                        who is responsible for answering inquiries from 
                        servicemembers and veterans, and is specially 
                        trained on servicemember and veteran benefits 
                        under the Servicemembers Civil Relief Act (50 
                        U.S.C. App. 501 et seq.) and other Federal or 
                        State laws related to postsecondary education 
                        loans.
                            ``(ii) Toll-free telephone number.--Each 
                        servicer shall maintain a toll-free telephone 
                        number that shall--
                                    ``(I) connect directly to the 
                                servicemember and veterans liaison 
                                designated under clause (i); and
                                    ``(II) be made available on the 
                                primary internet website of the 
                                servicer and on monthly billing 
                                statements.
                            ``(iii) Prohibition on charge offs and 
                        default.--A lender or servicer may not charge 
                        off or report a postsecondary education loan as 
                        delinquent, assigned to collection (internally 
                        or by referral to a third party), in default, 
                        or charged-off to a credit reporting agency if 
                        the borrower is on active duty in the Armed 
                        Forces (as defined in section 101(d)(1) of 
                        title 10, United States Code) serving in a 
                        combat zone (as designated by the President 
                        under section 112(c) of the Internal Revenue 
                        Code of 1986).
                            ``(iv) Additional liaisons.--The Secretary 
                        shall determine additional entities with whom 
                        borrowers interact, including guaranty 
                        agencies, that shall designate an employee to 
                        act as the servicemember and veterans liaison 
                        who is responsible for answering inquiries from 
                        servicemembers and veterans and is specially 
                        trained on servicemembers and veteran benefits 
                        and option under the Servicemembers Civil 
                        Relief Act (50 U.S.C. App. 501 et seq.).
                    ``(J) Borrower's loan history.--
                            ``(i) In general.--A servicer shall make 
                        available through a secure website, or in 
                        writing upon request, the loan history of each 
                        borrower for each postsecondary education loan, 
                        separately designating--
                                    ``(I) payment history;
                                    ``(II) loan history, including any 
                                forbearances, deferrals, delinquencies, 
                                assignment to collection, and charge 
                                offs;
                                    ``(III) annual percentage rate 
                                history; and
                                    ``(IV) key loan terms, including 
                                application of payments to interest, 
                                principal, and fees, origination date, 
                                principal, capitalized interest, annual 
                                percentage rate, including any cap, 
                                loan term, and any contractual 
                                incentives.
                            ``(ii) Original documentation.--A servicer 
                        shall make available to the borrower, if 
                        requested, at no charge, copies of the original 
                        loan documents and the promissory note for each 
                        postsecondary education loan.
                    ``(K) Error resolution.--The Director of the Bureau 
                of Consumer Financial Protection, in consultation with 
                the Secretary of Education, shall promulgate rules 
                requiring servicers to establish error resolution 
                procedures to allow borrowers to inquire about errors 
                related to their postsecondary education loans and 
                obtain timely resolution of such errors.
                    ``(L) Additional servicing standards.--The Director 
                of the Bureau of Consumer Financial Protection, in 
                consultation with the Secretary of Education, may 
                establish additional servicing standards to reduce 
                delinquencies, assignment to collections, defaults, and 
                charge-offs, and to ensure borrowers understand their 
                rights and obligations related to their postsecondary 
                education loans.
                    ``(M) Arbitration.--
                            ``(i) Waiver of rights and remedies.--Any 
                        rights and remedies available to borrowers 
                        against servicers may not be waived by any 
                        agreement, policy, or form, including by a 
                        predispute arbitration agreement.
                            ``(ii) Predispute arbitration agreements.--
                        No predispute arbitration agreement shall be 
                        valid or enforceable by a servicer, including 
                        as a third-party beneficiary or by estoppel, if 
                        the agreement requires arbitration of a dispute 
                        with respect to a postsecondary education loan. 
                        This subparagraph applies to predispute 
                        arbitration agreements entered into before the 
                        date of enactment of the Student Loan Borrower 
                        Bill of Rights, as well as on and after such 
                        date of enactment, if the violation that is the 
                        subject of the dispute occurred on or after 
                        such date of enactment.
                    ``(N) Enforcement.--The provisions of this 
                paragraph shall be enforced by the agencies specified 
                in subsections (a) through (d) of section 108, in the 
                manner set forth in that section or under any other 
                applicable authorities available to such agencies by 
                law.
                    ``(O) Preemption.--Nothing in this paragraph may be 
                construed to preempt any provision of State law 
                regarding postsecondary education loans where the State 
                law provides stronger consumer protections.
                    ``(P) Civil liability.--A servicer that fails to 
                comply with any requirement imposed under this 
                paragraph shall be deemed a creditor that has failed to 
                comply with a requirement under this chapter for 
                purposes of liability under section 130 and such 
                servicer shall be subject to the liability provisions 
                under such section, including the provisions under 
                paragraphs (1), (2)(A)(i), (2)(B), and (3) of section 
                130(a).
                    ``(Q) Eligibility for discharge.--The Director of 
                the Bureau of Consumer Financial Protection, in 
                consultation with the Secretary of Education, shall 
                promulgate rules requiring lenders and servicers of 
                loans described in paragraph (13)(B)(ii) to--
                            ``(i) identify and contact borrowers who 
                        may be eligible for student loan discharge by 
                        the Secretary;
                            ``(ii) provide the borrower, in writing, in 
                        simple and understandable terms, information 
                        about obtaining such discharge; and
                            ``(iii) create a streamlined process for 
                        eligible borrowers to apply for and receive 
                        such discharge.''; and
                    (B) by adding at the end the following:
    ``(g) Information To Be Available at No Charge.--The information 
required to be disclosed under this section shall be made available at 
no charge to the borrower.''; and
            (2) in section 130(a)--
                    (A) in paragraph (3), by striking ``128(e)(7)'' and 
                inserting ``128(e)(10)''; and
                    (B) in the flush matter at the end, by striking 
                ``or paragraph (4)(C), (6), (7), or (8) of section 
                128(e),'' and inserting ``or paragraph (4)(C), (9), 
                (10), or (11) of section 128(e),''.

SEC. 3. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

    Section 433 of the Higher Education Act of 1965 (20 U.S.C. 1083) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (12), by striking ``and'' after 
                the semicolon;
                    (B) in paragraph (13), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(14) a statement that--
                    ``(A) the borrower may be entitled to servicemember 
                and veteran benefits under the Servicemembers Civil 
                Relief Act (50 U.S.C. App. 501 et seq.) and other 
                Federal or State laws; and
                    ``(B) a Servicemember and Veterans Liaison 
                designated under section 128(e)(15)(I)(i) of the Truth 
                in Lending Act (15 U.S.C. 1638(e)(15)(I)(i)) is 
                available to answer inquiries about servicemember and 
                veteran benefits, including the toll-free telephone 
                number to contact the Liaison pursuant to such 
                section.''; and
            (2) in subsection (e)--
                    (A) in paragraph (2), by adding at the end the 
                following:
                    ``(D) A statement that--
                            ``(i) the borrower may be entitled to 
                        servicemember and veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. App. 
                        501 et seq.) and other Federal or State laws; 
                        and
                            ``(ii) a Servicemember and Veterans Liaison 
                        designated under section 128(e)(15)(I)(i) of 
                        the Truth in Lending Act (15 U.S.C. 
                        1638(e)(15)(I)(i)) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits, including the toll-free telephone 
                        number to contact the Liaison pursuant to such 
                        section.''; and
                    (B) in paragraph (3), by adding at the end the 
                following:
                    ``(F) A statement that--
                            ``(i) the borrower may be entitled to 
                        servicemember and veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. App. 
                        501 et seq.) and other Federal or State laws; 
                        and
                            ``(ii) a Servicemember and Veterans Liaison 
                        designated under section 128(e)(15)(I)(i) of 
                        the Truth in Lending Act (15 U.S.C. 
                        1638(e)(15)(I)(i)) is available to answer 
                        inquiries about servicemember and veteran 
                        benefits, including the toll-free telephone 
                        number to contact the Liaison pursuant to such 
                        section.''.

SEC. 4. KNOW BEFORE YOU OWE.

    (a) Amendments to the Truth in Lending Act.--
            (1) In general.--Section 128(e) of the Truth in Lending Act 
        (15 U.S.C. 1638(e)), as amended by section 2, is further 
        amended--
                    (A) by striking paragraph (3) and inserting the 
                following:
            ``(3) Institutional certification required.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), before a creditor may issue any funds 
                with respect to an extension of credit described in 
                this subsection, the creditor shall obtain from the 
                relevant institution of higher education where such 
                loan is to be used for a student, such institution's 
                certification of--
                            ``(i) the enrollment status of the student;
                            ``(ii) the student's cost of attendance at 
                        the institution as determined by the 
                        institution under part F of title IV of the 
                        Higher Education Act of 1965; and
                            ``(iii) the difference between--
                                    ``(I) such cost of attendance; and
                                    ``(II) the student's estimated 
                                financial assistance, including such 
                                assistance received under title IV of 
                                the Higher Education Act of 1965 and 
                                other financial assistance known to the 
                                institution, as applicable.
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                a creditor may issue funds, not to exceed the amount 
                described in subparagraph (A)(iii), with respect to an 
                extension of credit described in this subsection 
                without obtaining from the relevant institution of 
                higher education such institution's certification if 
                such institution fails to provide within 15 business 
                days of the creditor's request for such certification--
                            ``(i) notification of the institution's 
                        refusal to certify the request; or
                            ``(ii) notification that the institution 
                        has received the request for certification and 
                        will need additional time to comply with the 
                        certification request.
                    ``(C) Loans disbursed without certification.--If a 
                creditor issues funds without obtaining a 
                certification, as described in subparagraph (B), such 
                creditor shall report the issuance of such funds in a 
                manner determined by the Director of the Bureau of 
                Consumer Financial Protection.''; and
                    (B) by adding at the end the following:
            ``(16) Provision of information.--
                    ``(A) Provision of information to students.--
                            ``(i) Loan statement.--A creditor that 
                        issues any funds with respect to an extension 
                        of credit described in this subsection shall 
                        send loan statements, where such loan is to be 
                        used for a student, to borrowers of such funds 
                        not less than once every 3 months during the 
                        time that such student is enrolled at an 
                        institution of higher education.
                            ``(ii) Contents of loan statement.--Each 
                        statement described in clause (i) shall--
                                    ``(I) report the borrower's total 
                                remaining debt to the creditor, 
                                including accrued but unpaid interest 
                                and capitalized interest;
                                    ``(II) report any debt increases 
                                since the last statement; and
                                    ``(III) list the current interest 
                                rate for each loan.
                    ``(B) Notification of loans disbursed without 
                certification.--On or before the date a creditor issues 
                any funds with respect to an extension of credit 
                described in this subsection, the creditor shall notify 
                the relevant institution of higher education, in 
                writing, of the amount of the extension of credit and 
                the student on whose behalf credit is extended. The 
                form of such written notification shall be subject to 
                the regulations of the Bureau of Consumer Financial 
                Protection.
                    ``(C) Annual report.--A creditor that issues funds 
                with respect to an extension of credit described in 
                this subsection shall prepare and submit an annual 
                report to the Bureau of Consumer Financial Protection 
                containing the required information about private 
                student loans to be determined by the Bureau of 
                Consumer Financial Protection, in consultation with the 
                Secretary of Education.''.
            (2) Definition of private education loan.--Section 
        140(a)(7)(A) of the Truth in Lending Act (15 U.S.C. 
        1650(a)(7)(A)) is amended--
                    (A) by redesignating clause (ii) as clause (iii);
                    (B) in clause (i), by striking ``and'' after the 
                semicolon; and
                    (C) by adding after clause (i) the following:
                            ``(ii) is not made, insured, or guaranteed 
                        under title VII or title VIII of the Public 
                        Health Service Act (42 U.S.C. 292 et seq. and 
                        296 et seq.); and''.
            (3) Regulations.--Not later than 365 days after the date of 
        enactment of this Act, the Director of the Bureau of Consumer 
        Financial Protection shall issue regulations in final form to 
        implement paragraphs (3) and (16) of section 128(e) of the 
        Truth in Lending Act (15 U.S.C. 1638(e)), as amended by 
        paragraph (1). Such regulations shall become effective not 
        later than 6 months after their date of issuance.
    (b) Amendments to the Higher Education Act of 1965.--
            (1) Program participation agreements.--Section 487(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1094(a)) is amended 
        by striking paragraph (28) and inserting the following:
            ``(28)(A) Upon the request of a private educational lender, 
        acting in connection with an application initiated by a 
        borrower for a private education loan in accordance with 
        section 128(e)(3) of the Truth in Lending Act (15 U.S.C. 
        1638(e)(3)), the institution shall within 15 days of receipt of 
        a certification request--
                    ``(i) provide such certification to such private 
                educational lender--
                            ``(I) that the student who initiated the 
                        application for the private education loan, or 
                        on whose behalf the application was initiated, 
                        is enrolled or is scheduled to enroll at the 
                        institution;
                            ``(II) of such student's cost of attendance 
                        at the institution as determined under part F 
                        of this title; and
                            ``(III) of the difference between--
                                    ``(aa) the cost of attendance at 
                                the institution; and
                                    ``(bb) the student's estimated 
                                financial assistance received under 
                                this title and other assistance known 
                                to the institution, as applicable;
                    ``(ii) notify the creditor that the institution has 
                received the request for certification and will need 
                additional time to comply with the certification 
                request; or
                    ``(iii) provide notice to the private educational 
                lender of the institution's refusal to certify the 
                private education loan under subparagraph (D).
            ``(B) With respect to a certification request described in 
        subparagraph (A), and prior to providing such certification 
        under subparagraph (A)(i) or providing notice of the refusal to 
        provide certification under subparagraph (A)(iii), the 
        institution shall--
                    ``(i) determine whether the student who initiated 
                the application for the private education loan, or on 
                whose behalf the application was initiated, has applied 
                for and exhausted the Federal financial assistance 
                available to such student under this title and inform 
                the student accordingly; and
                    ``(ii) provide the borrower whose loan application 
                has prompted the certification request by a private 
                education lender, as described in subparagraph (A)(i), 
                with the following information and disclosures:
                            ``(I) The availability of, and the 
                        borrower's potential eligibility for, Federal 
                        financial assistance under this title, 
                        including disclosing the terms, conditions, 
                        interest rates, and repayment options and 
                        programs of Federal student loans.
                            ``(II) The borrower's ability to select a 
                        private educational lender of the borrower's 
                        choice.
                            ``(III) The impact of a proposed private 
                        education loan on the borrower's potential 
                        eligibility for other financial assistance, 
                        including Federal financial assistance under 
                        this title.
                            ``(IV) The borrower's right to accept or 
                        reject a private education loan within the 30-
                        day period following a private educational 
                        lender's approval of a borrower's application 
                        and about a borrower's 3-day right to cancel 
                        period.
            ``(C) For purposes of this paragraph, the terms `private 
        educational lender' and `private education loan' have the 
        meanings given such terms in section 140 of the Truth in 
        Lending Act (15 U.S.C. 1650).
            ``(D)(i) An institution shall not provide a certification 
        with respect to a private education loan under this paragraph 
        unless the private education loan includes terms that provide--
                    ``(I) the borrower alternative repayment plans, 
                including loan consolidation or refinancing; and
                    ``(II) that the liability to repay the loan shall 
                be cancelled upon the death or disability of the 
                borrower or co-borrower.
            ``(ii) In this paragraph, the term `disability' means a 
        permanent and total disability, as determined in accordance 
        with the regulations of the Secretary of Education, or a 
        determination by the Secretary of Veterans Affairs that the 
        borrower is unemployable due to a service-connected 
        disability.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the effective date of the regulations 
        described in subsection (a)(3).
            (3) Preferred lender arrangement.--Section 151(8)(A)(ii) of 
        the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii)) is 
        amended by inserting ``certifying,'' after ``promoting,''.
    (c) Report.--Not later than 24 months after the issuance of 
regulations under subsection (a)(3), the Director of the Bureau of 
Consumer Financial Protection and the Secretary of Education shall 
jointly submit to Congress a report on the compliance of institutions 
of higher education and private educational lenders with section 
128(e)(3) of the Truth in Lending Act (15 U.S.C. 1638(e)), as amended 
by subsection (a), and section 487(a)(28) of the Higher Education Act 
of 1965 (20 U.S.C. 1094(a)), as amended by subsection (b). Such report 
shall include information about the degree to which specific 
institutions utilize certifications in effectively encouraging the 
exhaustion of Federal student loan eligibility and lowering student 
private education loan debt.

SEC. 5. MARKETING LIMITATION.

    Section 456 of the Higher Education Act of 1965 (20 U.S.C. 1087f) 
is amended by adding at the end the following:
    ``(c) Limitation on Contracts for the Servicing of Loans.--A 
servicer may not market to the borrower of a student loan made, 
insured, or guaranteed under this title which the servicer services, a 
financial product or service using data obtained through the servicing 
relationship, or otherwise during the servicing process.''.

SEC. 6. SERVICER CHOICE.

    Section 456 of the Higher Education Act of 1965 (20 U.S.C. 1087f), 
as amended by section 5, is further amended by adding at the end the 
following:
    ``(d) Switching Servicers.--The Secretary shall establish a program 
that allows a borrower of a loan made under this part after the date of 
enactment of the Student Loan Borrower Bill of Rights to switch from 
the assigned servicer of such loan to a new servicer based on a random 
reassignment by the Secretary.''.

SEC. 7. CENTRALIZED POINT OF ACCESS.

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

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

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

SEC. 8. REPORT ON STUDENT LOAN SERVICERS.

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