ing authority for an electronic fund transfer that the bor-
rower had provided to the transferor servicer. 
‘‘(e) SERVICER LIABILITY.— 
‘‘(1) EFFECTIVE
DATE
OF
REGULATIONS.—A 
student loan servicer shall not be liable to a bor-
rower for failure to comply with the requirements of 
subsection (b) with respect to a transfer of student 
loan servicing before the regulations under sub-
section (f) take effect. 
‘‘(2) MITIGATING
ACTION.—A student loan 
servicer or a postsecondary education lender shall 
not be liable to a borrower for failure to comply with 
a requirement under this section if, not later than 
60 days after discovering an error and before the 
commencement of an action under section 130 or 
the receipt of written notice of the error from the 
borrower, the student loan servicer notifies the bor-
rower of the error and makes any adjustments in the 
appropriate account that are necessary to ensure 
that the borrower will not be required to pay an 
amount greater than the amount that the borrower 
otherwise would have paid. 
‘‘(f) RULEMAKING.—The Bureau, in consultation 
with the Secretary of Education, is authorized to prescribe 
such rules and regulations, make such interpretations, and 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
grant such reasonable exemptions, in accordance with, and 
as may be necessary to achieve the purposes of, this chap-
ter. 
‘‘(g) DEFINITIONS.—In this section, the following 
definitions shall apply: 
‘‘(1) 
ALTERNATIVE
REPAYMENT
ARRANGE-
MENT.—The term ‘alternative repayment arrange-
ment’ means an agreed upon arrangement between 
a loan holder (or, for a Federal Direct Loan or a 
Federal Perkins Loan, the Secretary of Education or 
the institution of higher education that made such 
loan, respectively) or student loan servicer and a 
borrower— 
‘‘(A) that is different than the terms of an 
existing postsecondary education loan arrange-
ment or agreement; and 
‘‘(B) pursuant to which remittance of a 
monthly payment— 
‘‘(i) satisfies the terms of the postsec-
ondary education loan; or 
‘‘(ii) is not required for a period of 1 
or more months in order to satisfy the 
terms of the postsecondary education loan 
arrangement or agreement. 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(2) EFFECTIVE
DATE
OF
TRANSFER.—The 
term ‘effective date of transfer’ means the date on 
which the first payment is due to a transferee 
servicer from a borrower under a postsecondary edu-
cation loan. 
‘‘(3) FEDERAL DIRECT LOAN.—The term ‘Fed-
eral Direct Loan’ means a loan made under part D 
of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1087a et seq.). 
‘‘(4) FEDERAL
PERKINS
LOAN.—The term 
‘Federal Perkins Loan’ means a loan made under 
part E of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1087aa et seq.). 
‘‘(5) INSTITUTION OF HIGHER EDUCATION.— 
The term ‘institution of higher education’ has the 
meaning given that term in section 102 of the High-
er Education Act of 1965 (20 U.S.C. 1002). 
‘‘(6) LATE FEE.—The term ‘late fee’ means a 
late fee, penalty, or adjustment to principal, imposed 
because of a late payment or delinquency by the bor-
rower under a postsecondary education loan. 
‘‘(7) LOAN HOLDER.—The term ‘loan holder’ 
means a person who owns the title to or promissory 
note for a postsecondary education loan (except for 
a Federal Direct Loan or a Federal Perkins Loan). 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(8) POSTSECONDARY EDUCATION EXPENSE.— 
The term ‘postsecondary education expense’ means 
any expense that is included as part of the cost of 
attendance (as that term is defined in section 472 
of the Higher Education Act of 1965 (20 U.S.C. 
1087ll)) of a student. 
‘‘(9) POSTSECONDARY EDUCATION LENDER.— 
The term ‘postsecondary education lender’— 
‘‘(A) means— 
‘‘(i) a financial institution, as defined 
in section 3 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813) that solicits, 
makes, or extends postsecondary education 
loans; 
‘‘(ii) a Federal credit union, as de-
fined in section 101 of the Federal Credit 
Union Act (12 U.S.C. 1752) that solicits, 
makes, or extends postsecondary education 
loans; and 
‘‘(iii) any other person engaged in the 
business of soliciting, making, or extending 
postsecondary education loans; and 
‘‘(B) does not include— 
‘‘(i) the Secretary of Education; or 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(ii) an institution of higher education 
with respect to any Federal Perkins Loan 
made by the institution. 
‘‘(10) POSTSECONDARY
EDUCATION
LOAN.— 
The term ‘postsecondary education loan’ means a 
loan that is— 
‘‘(A) made, insured, or guaranteed under 
part B, D, or E of title IV of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1071 et seq., 
1087a et seq., 1087aa et seq.); 
‘‘(B) issued or made by a postsecondary 
education lender and is— 
‘‘(i) extended to a borrower with the 
expectation that the amounts extended will 
be used in whole or in part to pay postsec-
ondary education expenses; or 
‘‘(ii) extended for the purpose of refi-
nancing or consolidating 1 or more loans 
described in subparagraph (A); or 
‘‘(C) a private education loan (as defined 
in section 140(a)). 
‘‘(11) STUDENT
LOAN
SERVICER.—The term 
‘student loan servicer’— 
‘‘(A) means a person who performs student 
loan servicing; 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(B) includes a person performing student 
loan servicing for a postsecondary education 
loan on behalf of an institution of higher edu-
cation or the Secretary of Education under a 
contract or other agreement; 
‘‘(C) does not include the Secretary of 
Education to the extent the Secretary directly 
performs student loan servicing for a postsec-
ondary education loan; and 
‘‘(D) does not include an institution of 
higher education, to the extent that the institu-
tion directly performs student loan servicing for 
a Federal Perkins Loan made by the institu-
tion. 
‘‘(12) STUDENT LOAN SERVICING.—The term 
‘student loan servicing’ means, with respect to a 
postsecondary education loan, any of the following 
activities: 
‘‘(A) Receiving any scheduled periodic pay-
ments, or notification of such payments, from a 
borrower under a postsecondary education loan. 
‘‘(B) Applying payments described in sub-
paragraph (A) to an account of the borrower 
pursuant to the terms of the postsecondary edu-
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
cation loan or of the contract governing the 
servicing of the postsecondary education loan. 
‘‘(C) During a period in which no payment 
is required on the postsecondary education 
loan— 
‘‘(i) maintaining account records for 
the loan; and 
‘‘(ii) communicating with the borrower 
on behalf of the loan holder or, with re-
spect to a Federal Direct Loan or Federal 
Perkins Loan, the Secretary of Education 
or the institution of higher education that 
made the loan, respectively. 
‘‘(D) Interacting with a borrower to facili-
tate the activities described in subparagraphs 
(A), (B), and (C), including activities to help 
prevent default by the borrower of the obliga-
tions arising from the postsecondary education 
loan. 
‘‘(13) TRANSFER
OF
SERVICING.—The term 
‘transfer of servicing’ means the assignment, sale, or 
transfer of any student loan servicing of a postsec-
ondary education loan from a transferor servicer to 
a transferee servicer. 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(14) 
TRANSFEREE
SERVICER.—The 
term 
‘transferee servicer’ means the student loan servicer 
to whom any student loan servicing of a postsec-
ondary education loan is assigned, sold, or trans-
ferred. 
‘‘(15) 
TRANSFEROR
SERVICER.—The 
term 
‘transferor servicer’ means the student loan servicer 
who assigns, sells, or transfers any student loan 
servicing of a postsecondary education loan to an-
other person.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents for chapter 2 of title I of the Truth in Lending 
Act is amended by inserting after the item relating to sec-
tion 140A the following new item: 
‘‘140B. Transfer of servicing of postsecondary education loans.’’. 
SEC. 3. AMENDMENTS TO THE HIGHER EDUCATION ACT OF 
1965. 
The Higher Education Act of 1965 (20 U.S.C. 1001 
et seq.) is amended— 
(1) in section 487(a) (20 U.S.C. 1094(a)), by 
adding at the end the following: 
‘‘(30) The institution will— 
‘‘(A) comply with the disclosure require-
ments for postsecondary education lenders 
under section 140B(a) of the Truth in Lending 
Act; and 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(B) ensure that each third party servicer 
with which the institution has entered into a 
contract complies with the applicable require-
ments for student loan servicers under section 
140B of such Act.’’; and 
(2) in section 463A(b) (20 U.S.C. 1087cc– 
1(b))— 
(A) by striking ‘‘and’’ at the end of para-
graph (8); 
(B) by striking the period at the end of 
paragraph (9) and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(10) the disclosures for postsecondary edu-
cation lenders and student loan services under sec-
tion 140B of the Truth in Lending Act.’’. 
Æ 
VerDate Sep 11 2014 
23:09 Nov 07, 2015
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6301
E:\BILLS\H3948.IH
H3948
tkelley on DSK3SPTVN1PROD with BILLS