SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS. 
(a) IN GENERAL.—Section 140 of the Truth in Lend-
ing Act (15 U.S.C. 1650) is amended by adding at the 
end the following new subsection: 
‘‘(f) ADDITIONAL
PROTECTIONS
RELATING
TO 
DEATH OR DISABILITY OF SIGNER OR COSIGNER OF A 
PRIVATE EDUCATION LOAN.— 
‘‘(1) OBLIGATION TO DISCUSS ADVANCE DIREC-
TIVES.—In conjunction with— 
‘‘(A) any student loan counseling provided 
by a covered educational institution to any new 
signer and cosigner (if any) at the time of any 
loan origination, loan reapplication, or loan con-
solidation, or at the time the cosigner assumes 
responsibility for repayment, the institution 
shall provide information with respect to, and 
discuss the benefit of, creating an advance di-
rective (such as a durable power of attorney, 
living will, etc.) for financial, legal, and medical 
decisionmaking, in accordance with State law, 
in the event of the death, incapacitation, or dis-
ability of the signer or cosigner (if any); and 
‘‘(B) any negotiation or other discussion 
with respect to any private education loan, the 
private educational lender involved in such loan 
shall discuss with the signer, and cosigner (if 
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any), the benefit of creating an advance direc-
tive (such as a durable power of attorney, living 
will, etc.) for financial, legal, and medical deci-
sionmaking, in accordance with State law, with 
respect to such loan, in the event of the death, 
incapacitation, or disability of the student or 
such cosigner (if any). 
‘‘(2) CLEAR AND COMPLETE DESCRIPTION OF 
COSIGNER’S OBLIGATION.—In the case of any pri-
vate education lender who extends a private edu-
cation loan for which any cosigner is jointly liable, 
the lender shall define, clearly and concisely, the 
terms of such person’s obligations with respect to 
the loan, including the effect the death, incapacita-
tion, or disability of the signer or cosigner (if any) 
would have on any such obligation, in language that 
the Board determines would give a reasonable per-
son a reasonable apprehension of the obligation 
being assumed by becoming a cosigner for the loan. 
‘‘(3) CREDIT INSURANCE.—In the case of any 
private education loan for which there is a cosigner, 
the private educational lender involved in such 
loan— 
‘‘(A) shall provide information with respect 
to, and discuss the benefit of credit insurance 
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with the signer, and the cosigner, in connection 
with such loan that would protect the signer 
and any cosigner in the event of the death, in-
capacitation, or disability of the signer or any 
such cosigner; 
‘‘(B) shall discuss with the student and the 
cosigner the benefit of credit insurance in con-
nection with such loan that would protect the 
student and any cosigner in the event of the 
death or disability of the student or any such 
cosigner; 
‘‘(C) may provide or make arrangements 
for the provision of any credit insurance re-
ferred to in subparagraph (A) in conjunction 
with the loan; and 
‘‘(D) may not— 
‘‘(i) establish any condition or require-
ment that the signer and cosigner (if any) 
has or has not obtained any such consumer 
credit insurance from the private edu-
cational lender, and affiliate of the private 
education lender or any other consumer 
credit insurance provider; or 
‘‘(ii) extend or deny a loan, or fix or 
vary the terms of the loan, on the basis 
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that the signer and cosigner (if any) has or 
has not obtained any such consumer credit 
insurance from the private educational 
lender, and affiliate of the private edu-
cation lender, or any other consumer credit 
insurance provider. 
‘‘(4) MODEL FORMS.—The Board shall publish 
model forms under section 105 for describing a co-
signer’s obligation for purposes of paragraph (2). 
‘‘(5) REGULATIONS DEFINING DEATH OR DIS-
ABILITY.— 
‘‘(A) IN GENERAL.—The Board shall— 
‘‘(i) prescribe regulations defining the 
manner and standards for establishing that 
a 
private 
education 
loan 
signer, 
or 
consigner (if any), has died or become in-
capacitated or disabled; and 
‘‘(ii) implement and enforce such reg-
ulations in connection with any private 
education loan. 
‘‘(B) COORDINATION WITH SECRETARY OF 
EDUCATION.—In prescribing regulations under 
subparagraph (A), the Board shall— 
‘‘(i) consult with the Secretary of 
Education; and 
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‘‘(ii) conform such regulations with 
the regulations prescribed by such Sec-
retary under section 437(a)(1) of the 
Higher Education Act of 1965 (20 U.S.C. 
1087(a)(1)) to the fullest extent prac-
ticable, including safeguards to prevent 
fraud and abuse. 
‘‘(C) DETERMINATION BY THE SECRETARY 
OF VETERANS AFFAIRS.—The regulations pre-
scribed under subparagraph (A) shall provide 
that a determination described in section 
437(a)(2) of the Higher Education Act of 1965 
(20 U.S.C. 1087(a)(2)) by the Secretary of Vet-
erans Affairs with respect to any person shall 
be dispositive for such person for purposes of 
this subsection and any agreement covered by 
this subsection.’’. 
(b) DEFINITIONS.—Subsection (a) of section 140 of 
the Truth in Lending Act (15 U.S.C. 1650(a)) is amended 
by adding at the end the following new paragraphs: 
‘‘(9) ADVANCE DIRECTIVE.—The term ‘advance 
directive’ means a written instruction, such as a liv-
ing will or durable power of attorney for health care, 
recognized under State law (whether statutory or as 
recognized by the courts of the State), relating to 
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the provision of health care when the individual is 
incapacitated. 
‘‘(10) COSIGNER.—The term ‘cosigner’— 
‘‘(A) means any individual who is liable for 
the obligation of another without compensation, 
regardless of how designated in the contract or 
instrument; 
‘‘(B) includes any person whose signature 
is requested as condition to grant credit or to 
forebear on collection; and 
‘‘(C) does not include a spouse of an indi-
vidual referred to in subparagraph (A) whose 
signature is needed to perfect security interest 
individual. 
‘‘(11) CREDIT INSURANCE.—The term ‘credit 
insurance’ has the meaning given to such term by 
the Board in regulations for purposes of this section. 
‘‘(12) DISABILITY.—The term ‘disability’ has 
the meaning given to such term in section 3 of the 
Americans with Disabilities Act of 1990. 
‘‘(13) DURABLE POWER OF ATTORNEY.—The 
term ‘durable power of attorney’ meaning given to 
such term in the Uniform Durable Power of Attor-
ney Act of 1979 and sections 5-501 through 5-505 
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of the Uniform Probate Code, as in effect in any 
State. 
‘‘(14) INCAPACITY.—The terms ‘incapacity’, ‘in-
capacitated’, or ‘incapacitation’ have the meanings 
given to such terms in the Family and Medical 
Leave Act of 1968, and regulations prescribed under 
such Act.’’. 
SEC. 3. FEDERAL STUDENT LOANS. 
(a) FEDERAL PLUS LOANS.—Section 428B of the 
Higher Education Act of 1965 (20 U.S.C. 1078–2) is 
amended by adding at the end the following: 
‘‘(g) DISCLOSURE.—An eligible lender shall disclose 
to a prospective borrower, in simple and understandable 
terms, at the time the lender provides an application for 
a PLUS loan, information with respect to creating a dura-
ble power of attorney to be used in the event of the death 
or disability of the borrower (or the student on whose be-
half the loan is borrowed by the parent borrower) includ-
ing the uses and benefits of creating such a power of attor-
ney with respect to student loans and other financial obli-
gations of the borrower.’’. 
(b) FEDERAL
CONSOLIDATION
LOANS.—Section 
428C(b)(1)(F) of the Higher Education Act of 1965 (20 
U.S.C. 1078–3(b)(1)(F)) is amended— 
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(1) by redesignating clauses (vi) and (vii) as 
clauses (vii) and (viii), respectively; and 
(2) by inserting after clause (v) the following 
new clause: 
‘‘(vi) information with respect to cre-
ating an advanced directive (such as a du-
rable power of attorney, living will, etc.) 
for financial legal and medical decision-
making in accordance with State law in the 
event of the death, incapacitation, or dis-
ability of the borrower, including the uses 
and benefits of such an advanced directive 
with respect to student loans and other fi-
nancial obligations of the borrower;’’. 
(c) 
ENTRANCE
COUNSELING
FOR
FEDERAL 
LOANS.—Section 485(l)(2) of the Higher Education Act 
of 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at 
the end the following: 
‘‘(L) Information on the conditions re-
quired to discharge the loan due to the death, 
incapacitation, or disability of the borrower, in 
accordance with section 437(a), and an expla-
nation that, in the case of a private education 
loan made through a private lender, the bor-
rower, the borrower’s estate, and any consigner 
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of a such a private education loan may be obli-
gated to repay the full amount of the loan, re-
gardless of the death, incapacitation, or dis-
ability of the borrower. 
‘‘(M) Information with respect to creating 
an advanced directive (such as a durable power 
of attorney, living will, etc.) for financial legal 
and medical decisionmaking in accordance with 
State law a durable power of attorney to be 
used in the event of the death, incapacitation, 
or disability of the borrower, including an ex-
planation of the uses and benefits of such an 
advanced directive with respect to student loans 
and other financial obligations of the bor-
rower.’’. 
Æ 
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