II 116th CONGRESS 1st Session S. 1354 IN THE SENATE OF THE UNITED STATES May 7, 2019 Mr. Durbin (for himself, Mr. Reed , and Ms. Warren ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To require certain protections for student loan borrowers, and for other purposes.

1. Short title This Act may be cited as the Student Loan Borrower Bill of Rights . 2. Higher Education Act of 1965 amendments (a) Student loan information by eligible lenders Section 433 of the Higher Education Act of 1965 ( 20 U.S.C. 1083 ) is amended— (1) in subsection (b)— (A) in paragraph (12), by striking and after the semicolon; (B) in paragraph (13), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (14) a statement that— (A) the borrower may be entitled to servicemember and veteran benefits under the Servicemembers Civil Relief Act ( 50 U.S.C. App. 501 et seq.) and other Federal or State laws; and (B) a Servicemember and Veterans Liaison designated under section 128(e)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number 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)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number to contact the Liaison pursuant to such section. (E) A statement that a repayment specialist office or unit designated under section 128(e)(16)(J)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(J)(i) ) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number to contact the specialist pursuant to section 128(e)(16)(J)(iii) of such Act. ; and (B) in paragraph (3), by adding at the end the following: (F) A statement that— (i) the borrower may be entitled to servicemember and veteran benefits under the Servicemembers Civil Relief Act ( 50 U.S.C. App. 501 et seq.) and other Federal or State laws; and (ii) a Servicemember and Veterans Liaison designated under section 128(e)(16)(K)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(K)(i) ) is available to answer inquiries about servicemember and veteran benefits, including the toll-free telephone number to contact the Liaison pursuant to such section. (G) A statement that a repayment specialist office or unit designated under section 128(e)(16)(J)(i) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(16)(J)(i) ) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number to contact the specialist pursuant to section 128(e)(16)(J)(iii) of such Act. . (b) Terms and conditions of loans Section 455 of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ) is amended by adding at the end the following: (r) Prepayment and payment application (1) In general A borrower may prepay all or part of a loan made under this part at any time without penalty. (2) Prepayment (A) In general If a borrower pays any amount in excess of the amount due for a loan made under this part, the excess amount shall be a prepayment. (B) Application of prepayment If a prepayment equals or exceeds the monthly repayment amount under the borrower's repayment plan with respect to a loan made under this part, the Secretary shall— (i) apply the prepaid amount according to the terms of the promissory note signed by the borrower; and (ii) upon request of the borrower, advance the due date of the next payment and notify the borrower of any revised due date for the next payment. . (c) Contracts Section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f ) is amended— (1) in subsection (a), by striking paragraph (3) and inserting the following: (3) Rules of construction (A) Consortia Nothing in this section shall be construed as a limitation of the authority of any State agency to enter into an agreement for the purposes of this section as a member of a consortium of State agencies. (B) Compliance with State and Federal laws Nothing in this section shall be construed as altering, limiting, or affecting any obligation by an entity with which the Secretary enters into a contract under this section to comply with any applicable Federal or State law, including any Federal consumer financial law, as defined in section 1002(14) of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481(14) ). (C) Authorities Nothing in this section shall be construed as altering, limiting, or affecting the authority of a State attorney general or any other State regulatory or enforcement agency or authority to bring an action or other regulatory proceeding arising solely under the law of such State. ; and (2) by adding at the end the following: (d) Applicability of provisions under the consumer financial protection act of 2010 (1) Consumer financial product or service A consumer financial product or service offered by an entity with which the Secretary enters into a contract under this section for origination, servicing, or collection described in subsection (b), as part of such contract, shall have the meaning given the term in section 1002 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 ). (2) Covered person Any entity with which the Secretary enters into a contract under this section for origination, servicing, or collection described in subsection (b) shall be considered a covered person (as defined in section 1002 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 )) and subject to the provisions of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5481 et seq.). (3) Postsecondary educational lender or servicer Any entity with which the Secretary enters into a contract under this section for origination, servicing, or collection, as described in subsection (b), and is engaged in the provision of, or offering, servicing shall be considered a postsecondary educational lender or servicer (as defined in section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) )), and subject to the provisions of section 128(e) of the Truth in Lending Act ( 12 U.S.C. 1638(e) ). (e) Complaints from student loan borrowers In awarding any contract under this section for origination, servicing, or collection described in subsection (b), the Secretary shall require, as part of such contract, any entity receiving such an award— (1) to respond to consumer complaints submitted to any Federal, State, or local agency that accepts complaints from student loan borrowers, including the Bureau of Consumer Financial Protection, by borrowers who owe loans made under this part; and (2) to share information about consumer complaints with the Secretary, the Bureau of Consumer Financial Protection, the Federal Trade Commission, the Department of Veterans Affairs, any State attorney general, or any other Federal or State regulatory or enforcement agency that compiles information about such complaints. (f) Limitations on contracts Any entity with which the Secretary enters into a contract under this section shall be prohibited, as part of such contract, from marketing to the borrower of a loan made, insured, or guaranteed under this title a financial product or service— (1) using data obtained as a result of the contract or the relationship with the borrower stemming from the contract; (2) during any outreach or contact with the borrower resulting from the contract or the relationship with the borrower stemming from the contract; or (3) on any platform or through any method resulting from the contract or the relationship with the borrower stemming from the contract. (g) Student loan servicing interagency working group (1) In general Not later than 30 days after the date of enactment of the Student Loan Borrower Bill of Rights , the Secretary shall establish a student loan servicing interagency working group co-chaired by the Secretary and the Director of the Bureau of Consumer Financial Protection and including the Chief Operating Officer of the Office of Federal Student Aid, the Director of the Office of Management and Budget, the Secretary of the Treasury, and the heads of any other relevant Federal departments or agencies. (2) Advisory report on rulemaking (A) In general Not later than 120 days after the date the working group under paragraph (1) is established, the working group shall publish an advisory report making recommendations to the Director of the Bureau of Consumer Financial Protection related to the promulgation of regulations under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) with respect to entities with which the Secretary has entered into a contract under this section. (B) Public feedback Following the publication of the advisory report required under subparagraph (A), the Secretary shall accept, for not less than 60 days, from the public specific feedback on the recommendations included in the report. (3) Publication of final recommendations Not later than 30 days following the conclusion of the public feedback process described in paragraph (2)(B), the Secretary shall publish final recommendations for the Director of the Bureau of Consumer Financial Protection related to the promulgation of regulations under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ). (4) Policy direction to federal student aid The working group shall develop policy direction for the Office of Federal Student Aid to incorporate, into contracts awarded under this section, applicable requirements and standards promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) or described in section 128(e)(17)(B)(i)(II) of such Act. (5) Meetings After the Secretary publishes final recommendations under paragraph (3), the working group shall meet not less often than once per year including to— (A) evaluate the application of regulations promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) on entities with which the Secretary has entered into a contract under this section; (B) evaluate the Office of Federal Student Aid’s implementation of policy direction developed pursuant to paragraph (4); (C) develop and implement an oversight plan to ensure compliance by entities with which the Secretary has entered into a contract under this section with policy direction developed under paragraph (4) and regulations promulgated under section 128(e)(17)(A) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17)(A) ) or described in section 128(e)(17)(B)(i)(II) of such Act; and (D) undertake other activities to improve coordination among the members of the working group as it relates to the Secretary’s administration of the Federal Direct Loan Program. (6) Rule of construction Nothing in this subsection shall be considered to alter, limit, or restrict the Bureau of Consumer Financial Protection’s obligations under chapter 5 of title 5, United States Code (commonly known as the Administrative Procedures Act ), including the Director’s obligation to provide notice, solicit public comment, and respond to such comment when issuing regulations. . 3. Truth in Lending Act amendments (a) In general The Truth in Lending Act ( 15 U.S.C. 1601 et seq.) is amended— (1) in section 128 ( 15 U.S.C. 1638 )— (A) in subsection (e)— (i) in the subsection heading, by striking private ; (ii) in paragraph (1)(O), by striking paragraph (6) and inserting paragraph (10) ; (iii) in paragraph (2)(L), by striking paragraph (6) and inserting paragraph (10) ; (iv) in paragraph (4)(C), by striking paragraph (7) and inserting paragraph (11) ; (v) by redesignating paragraphs (5) through (11) as paragraphs (9) through (15), respectively; (vi) by inserting after paragraph (4) the following: (5) Disclosures before first fully amortized payment Not fewer than 30 days and not more than 150 days before the first fully amortized payment on a postsecondary education loan is due from the borrower, the postsecondary educational lender or servicer shall disclose to the borrower, clearly and conspicuously— (A) the information described in— (i) paragraph (2)(A) (adjusted, as necessary, for the rate of interest in effect on the date the first fully amortized payment on a postsecondary education loan is due); (ii) subparagraphs (B) through (G) of paragraph (2); (iii) paragraph (2)(H) (adjusted, as necessary, for the rate of interest in effect on the date the first fully amortized payment on a postsecondary education loan is due); (iv) paragraph (2)(K); and (v) subparagraphs (O) and (P) of paragraph (2); (B) the scheduled date upon which the first fully amortized payment is due; (C) the name of the postsecondary educational lender and servicer, and the address to which communications and payments should be sent including a telephone number and website where the borrower may obtain additional information; (D) a description of alternative repayment options, including Federal Direct Consolidation Loans under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq.), as applicable, 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 (16)(K) 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 (16)(K). (6) Disclosures when borrower is at risk (A) In general Not more than 5 days after a postsecondary educational lender or servicer determines that a borrower meets the criteria established in paragraph (16)(J)(i), the postsecondary educational lender or servicer shall disclose to the borrower, in writing, clearly and conspicuously that a repayment specialist office or unit is available to discuss alternative repayment options and answer borrower inquiries related to their postsecondary educational loan, including the toll-free number to contact the office or unit pursuant to paragraph (16)(J)(iii). (B) Outreach to at-risk borrowers The Director, in accordance with paragraph (17)(A), shall promulgate rules to establish a timeline for additional live outreach by the repayment specialist office or unit to at-risk borrowers. (7) Actions when borrower is 30 days delinquent (A) In general Not more than 5 days after a borrower becomes 30 days delinquent on a postsecondary education loan, the repayment specialist office or unit designated under paragraph (16)(J) shall— (i) make a good faith effort to establish live contact with the borrower to discuss alternative repayment options and other options available to avoid default; and (ii) disclose to the borrower, in writing, clearly and conspicuously— (I) the minimum payment that the borrower must make to bring the loan current; (II) a statement, related to potential charge off (as defined in paragraph (16)(A)) or assignment to collections as appropriate, to include— (aa) the date on which the loan will be charged off or assigned to collections if no payment or the minimum payment required to be disclosed pursuant to item (bb) is not made; (bb) the minimum payment that must be made to avoid the loan being charged off or assigned to collection; and (cc) the consequences to the borrower of charge off or assignment to collections; (III) a statement that a Servicemember and Veterans Liaison designated under paragraph (16)(K) is available to answer inquiries about servicemember and veteran benefits related to postsecondary education loans, including the toll-free telephone number to contact the Liaison pursuant to paragraph (16)(K); and (IV) a statement that a repayment specialist office or unit designated under paragraph (16)(J) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number to contact the specialist pursuant to paragraph (16)(J)(iii). (B) Modifications The disclosures described in subparagraph (A)(ii) may be modified subject to regulations promulgated by the Director, based on consumer testing and in accordance with paragraph (17)(A). (8) Actions when borrower is having difficulty making payment or is 60 days delinquent (A) In general Not more than 5 days after a borrower notifies a postsecondary educational lender or servicer that the borrower is having difficulty making payment or a borrower becomes 60 days delinquent on a postsecondary education loan, the repayment specialist office or unit designated under paragraph (16)(J) shall— (i) complete a full review of the borrower’s postsecondary education loan and make a reasonable effort to obtain the information necessary to determine— (I) if the borrower is eligible for an alternative repayment option, including Federal Direct Consolidation Loans under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq.), as applicable; (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; and (III) if the postsecondary education loan is eligible for discharge by the Secretary; (ii) make a good faith effort to establish live contact with the borrower to provide the borrower information about alternative repayment options and benefits for which the borrower is eligible, including all terms, conditions, and fees or costs associated with such repayment plan, pursuant to paragraph (9)(D); (iii) provide to the borrower in writing, in simple and understandable terms, such information required by clause (ii); (iv) allow the borrower not less than 30 days to apply for an alternative repayment option or benefits, if eligible; (v) notify the borrower that a Servicemember and Veterans Liaison designated under paragraph (16)(K) is available to answer inquiries about servicemember and veteran benefits related to postsecondary education loans, including the toll-free telephone number to contact the Liaison pursuant to paragraph (16)(K); and (vi) notify the borrower that a repayment specialist office or unit designated under paragraph (16)(J) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number to contact the specialist pursuant to paragraph (16)(J)(iii). (B) Forbearance or deferment If, after receiving information about alternative repayment options from the repayment specialist, a borrower notifies the postsecondary educational lender or servicer that a long-term alternative repayment option is not appropriate, the postsecondary educational lender or servicer may comply with this paragraph by providing the borrower, in writing, in simple and understandable terms, information about short-term options to address an anticipated short-term difficulty in making payments, such as forbearance or deferment options, including all terms, conditions, and fees or costs associated with such options pursuant to paragraph (9)(D). (C) Notification process (i) In general Each postsecondary educational lender or servicer shall establish a process, in accordance with subparagraph (A), for a borrower to notify the lender that— (I) the borrower is having difficulty making payments on a postsecondary education loan; and (II) a long-term alternative repayment option is not appropriate. (ii) Consumer financial protection bureau requirements The Director shall, based on consumer testing, and in accordance with paragraph (17)(A), promulgate rules establishing minimum standards for postsecondary educational lenders or servicers in carrying out the requirements of this paragraph and a model form for borrowers to notify postsecondary educational lenders or servicers of the information under this paragraph. ; (vii) in paragraph (9), as redesignated by clause (v), by adding at the end the following: (D) Model disclosure form for alternative repayment options, forbearance, and deferment options Not later than 2 years after the date of enactment of the Student Loan Borrower Bill of Rights , the Director shall, based on consumer testing and through regulations promulgated in accordance with paragraph (17)(A), develop and issue model forms to allow borrowers to compare alternative repayment options, forbearance, and deferment options with the borrower’s existing repayment plan with respect to a postsecondary education loan. In developing such forms, the Director shall consider and evaluate the following for inclusion: (i) The total amount to be paid over the life of the loan. (ii) The total amount in interest to be paid over the life of the loan. (iii) The monthly payment amount. (iv) The expected pay-off date. (v) Other related fees and costs, as applicable. (vi) Eligibility requirements, and how the borrower can apply for an alternative repayment option, forbearance, or deferment option. (vii) Any relevant consequences due to action or inaction, such as default, including any actions that would result in the loss of eligibility for alternative repayment options, forbearance, or deferment options. ; (viii) in paragraph (12), as redesignated by clause (v), by striking paragraph (7) and inserting paragraph (11) ; (ix) by striking paragraph (14), as redesignated by clause (v), and inserting the following: (14) Definitions In this subsection— (A) the terms covered educational institution , private educational lender , and private education loan have the same meanings as in section 140; (B) the term postsecondary education loan means— (i) a private education loan; 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.); (C) the term postsecondary educational lender or servicer means— (i) an eligible lender of a loan made, insured, or guaranteed under part B of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq.); (ii) any entity with which the Secretary enters into a contract under section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f ) for origination, servicing, or collection described in subsection (b) of such section 456 and is engaged in the provision of, or offering, servicing, as defined in paragraph (16)(A)(iv), or collections regardless of whether the Secretary identifies the entity as a servicer in such contract; (iii) a private educational lender; (iv) any other person or entity engaged in the business of securing, making, or extending postsecondary education loans on behalf of a person or entity described in clause (i) or (iii); or (v) any other holder of a postsecondary education loan other than the Secretary; (D) the term Director means the Director of the Bureau; and (E) the term Secretary means the Secretary of Education. ; (x) in paragraph (15), as redesignated by clause (v), by striking paragraph (5) and inserting paragraph (9) ; and (xi) by adding at the end the following: (16) Student loan borrower bill of rights (A) Definitions In this paragraph: (i) Borrower The term borrower means the person to whom a postsecondary education loan is extended. (ii) Charge off The term charge off means charge to profit and loss, or subject to any similar action. (iii) Qualified written request (I) In general The term qualified written request means a written correspondence of a borrower (other than notice on a payment medium supplied by the postsecondary educational lender or servicer) transmitted by mail, facsimile, or electronically through an email address or website designated by the postsecondary educational lender or servicer to receive communications from borrowers that— (aa) includes, or otherwise enables the postsecondary educational lender or servicer to identify, the name and account of the borrower; and (bb) includes, to the extent applicable— (AA) sufficient detail regarding the information sought by the borrower; or (BB) a statement of the reasons for the belief of the borrower that there is an error regarding the account of the borrower. (II) Correspondence delivered to other addresses (aa) In general A written correspondence of a borrower is a qualified written request if the written correspondence is transmitted to and received by a postsecondary educational lender or servicer at a mailing address, facsimile number, email address, or website address other than the address or number designated by that postsecondary educational lender or servicer to receive communications from borrowers but the written correspondence meets the requirements under items (aa) and (bb) of subclause (I). (bb) Duty to transfer A postsecondary educational lender or servicer shall, within a reasonable period of time, transfer a written correspondence of a borrower received by the postsecondary educational lender or servicer at a mailing address, facsimile number, email address, or website address other than the address or number designated by that postsecondary educational lender or servicer to receive communications from borrowers to the correct address or appropriate office or other unit of the postsecondary educational lender or servicer. (cc) Date of receipt A written correspondence of a borrower transferred in accordance with item (bb) shall be deemed to be received by the postsecondary educational lender or servicer on the date on which the written correspondence is transferred to the correct address or appropriate office or other unit of the postsecondary educational lender or servicer. (iv) Servicing The term servicing means 1 or more of the following: (I) Receiving any scheduled periodic payments from a borrower or notification of such payments pursuant to the terms of a postsecondary education loan or contract governing the servicing. (II) Applying payments to the borrower’s account pursuant to the terms of the postsecondary education loan or the contract governing the servicing. (III) Maintaining account records for a postsecondary education loan. (IV) Communicating with a borrower regarding a postsecondary education loan on behalf of the postsecondary educational lender or servicer. (V) Interactions with a borrower, including activities to help prevent default on obligations arising from postsecondary education loans, conducted to facilitate the activities described in subclause (I) or (II). (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; (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; (III) provide to the transferee all borrower information and complete payment history information for any such postsecondary education loans; 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 90-day period beginning on the date on which the transferor stops accepting payment, if the transferor receives such payment on or before the applicable due date, including any grace period; (III) provide borrowers a simple, online process for transferring existing electronic fund transfer authority; and (IV) honor any promotion or benefit available or granted to the borrower or advertised by the previous owner or transferor of such postsecondary education loan. (C) Material change in mailing address or procedure for handling payments (i) In general If a postsecondary educational lender or servicer makes a change in the mailing address, office, or procedures for handling payments with respect to any postsecondary education loan, the postsecondary educational lender or servicer shall notify the borrower in writing and through the borrower’s preferred or designated method of communication not less than 45 calendar days in advance of such change. (ii) Borrower protection window If a change described in clause (i) causes a delay in the crediting of the account of the borrower made during the 90-day period following the date on which such change took effect, the postsecondary educational lender or servicer may not impose on the borrower any negative consequences, including negative credit reporting, lost eligibility in borrower benefits, late fees, interest capitalization, or other financial injury. (D) Interest rate and term changes for certain postsecondary education loans (i) Notification requirements (I) In general Except as provided in clause (iii), a postsecondary educational lender or servicer shall provide written notice to a borrower of any material change in the terms of the postsecondary education loan, including an increase in the interest rate, not later than 45 days before the effective date of the change or increase. (II) Material changes in terms The Director shall, by regulation, establish guidelines for determining which changes in terms are material under subclause (I). (ii) Limits on interest rate and fee increases applicable to outstanding balance Except as provided in clause (iii), a postsecondary educational lender or servicer may not increase the interest rate or other fee applicable to an outstanding balance on a postsecondary education loan. (iii) Exceptions The requirements under clauses (i) and (ii) shall not apply to— (I) an increase based on an applicable variable interest rate incorporated in the terms of a postsecondary education loan that provides for changes in the interest rate according to operation of an index that is not under the control of the postsecondary educational lender or servicer and is published for viewing by the general public; (II) an increase in interest rate due to the completion of a workout or temporary hardship arrangement by the borrower or the failure of the borrower to comply with the terms of a workout or temporary hardship arrangement if— (aa) the interest rate applicable to a category of transactions following any such increase does not exceed the rate or fee that applied to that category of transactions prior to commencement of the arrangement; and (bb) the postsecondary educational lender or servicer has provided the borrower, prior to the commencement of such arrangement, with clear and conspicuous disclosure of the terms of the arrangement (including any increases due to such completion or failure); and (III) an increase in interest rate due to a provision included within the terms of a postsecondary education loan that provides for a lower interest rate based on the borrower’s agreement to a prearranged plan that authorizes recurring electronic funds transfers if— (aa) the borrower withdraws the borrower’s authorization of the prearranged recurring electronic funds transfer plan; and (bb) after withdrawal of the borrower’s authorization and prior to increasing the interest rate, the postsecondary educational lender or servicer has provided the borrower with clear and conspicuous disclosure of the impending change in borrower’s interest rate and a reasonable opportunity to reauthorize the prearranged electronic funds transfers plan. (E) Payment information (i) Statement required with each billing cycle A postsecondary educational lender or servicer for each borrower’s account that is being serviced by the postsecondary educational lender or servicer and that includes a postsecondary education loan shall transmit to the borrower, for each billing cycle during which there is an outstanding balance in that account, a statement that includes— (I) the interest rate, principal balance, minimum monthly payment, and payment due date for each loan; (II) the outstanding balance in the account and each loan at the beginning of the billing cycle; (III) the total amount credited to the account and each loan during the billing cycle; (IV) the total amount of unpaid interest for the account and each loan; (V) the amount of any fee added to the account during the billing cycle, itemized to show each individual fee amount and reason for each fee; (VI) the address and phone number of the postsecondary educational lender or servicer to which the borrower may direct billing inquiries; (VII) the amount of any payments or other credits during the billing cycle that was applied respectively to the principal and to interest for each loan; (VIII) the manner, pursuant to subparagraph (G), in which payments will be allocated among multiple loans if the borrower does not provide specific payment instructions; (IX) whether each loan is in deferment or forbearance; (X) information on how to file a complaint with the Bureau and with the ombudsman designated pursuant to section 1035 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5535 ) and the Department of Education; (XI) for any borrower considered to be at risk, as described in subparagraph (J)(i), a statement that a repayment specialist office or unit designated under subparagraph (J) is available to answer inquiries related to alternative repayment options, including the toll-free telephone number to contact the specialist pursuant to subparagraph (J)(iii); and (XII) any other information determined appropriate by the Director through regulations promulgated, based on consumer testing and in accordance with paragraph (17)(A). (ii) Disclosure of payment deadlines In the case of a postsecondary education loan account under which a late fee or charge may be imposed due to the failure of the borrower to make payment on or before the due date for such payment, the billing statement required under clause (i) with respect to the account shall include, in a conspicuous location on the billing statement, the date on which the payment is due or, if different, the date on which a late fee will be charged, together with the amount of the late fee to be imposed if payment is made after that date. (F) Application of payments (i) Apply payment on date received Unless otherwise directed by the borrower, a postsecondary educational lender or servicer shall apply payments to a borrower’s account on the date the payment is received. (ii) Promulgation of rules The Director, in accordance with paragraph (17)(A), may promulgate rules for the application of postsecondary education loan payments that— (I) implements the requirements in this section; (II) minimizes the amount of fees and interest incurred by the borrower and the total loan amount paid by the borrower; (III) minimizes delinquencies, assignments to collection, and charge offs; (IV) requires postsecondary educational lenders or servicers to apply payments on the date received; and (V) allows the borrower to instruct the postsecondary educational lender or servicer to apply payments in a manner preferred by the borrower. (iii) Method that best benefits borrower In promulgating the rules under clause (ii), the Director shall choose the allocation method that best benefits the borrower and is compatible with existing repayment options. (G) Allocation of payments among multiple loans (i) Allocation of underpayments Unless otherwise directed by the borrower, upon receipt of a payment that does not satisfy the full amount due for each postsecondary education loan, the postsecondary educational lender or servicer shall allocate amounts in a manner that minimizes negative consequences, including negative credit reporting and late fees, and, where multiple loans share an equal stage of delinquency, the postsecondary educational lender or servicer shall first allocate payment to the postsecondary education loan with the smallest monthly payment, and then, after satisfying that monthly payment, to each successive loan bearing the next highest monthly payment, until the payment is exhausted. A borrower may instruct or expressly authorize a postsecondary educational lender or servicer to allocate payments in a different manner. (ii) Allocation of excess amounts Unless otherwise directed by the borrower, upon receipt of a payment exceeding the total amount due among all the borrower’s postsecondary education loans, the postsecondary educational lender or servicer shall satisfy the amounts due for each loan, and then allocate amounts in excess of the minimum payment amount first to the postsecondary education loan balance bearing the highest annual percentage rate, and then, once that loan is repaid, to each successive postsecondary education loan bearing the next highest annual percentage rate, until the payment is exhausted. A borrower may instruct or expressly authorize a postsecondary educational lender or servicer to allocate such excess payments in a different manner. (iii) Allocation of exact payments Unless otherwise directed by the borrower upon receipt of a payment that exactly satisfies the monthly payments for each loan, the postsecondary educational lender or servicer shall allocate payments to satisfy each monthly payment. (iv) Promulgation of rules The Director, in accordance with paragraph (17)(A), may promulgate rules for the allocation of payments among multiple postsecondary education loans that— (I) implements the requirements in this section; (II) minimizes the amount of fees and interest incurred by the borrower and the total loan amount paid by the borrower; (III) minimizes delinquencies, assignments to collection, and charge offs; (IV) requires postsecondary educational lenders or servicers to apply payments on the date received; and (V) allows the borrower to instruct postsecondary educational lenders or servicers to apply payments in a manner preferred by the borrower, including excess payments. (v) Method that best benefits borrower In promulgating the rules under clause (iv), the Director shall choose the allocation method that best benefits the borrower and is compatible with existing repayment options. (H) Late fees (i) In general A late fee may not be charged to a borrower for a postsecondary education loan under any of the following circumstances, either individually or in combination: (I) On a per-loan basis when a borrower has multiple postsecondary education loans. (II) In an amount greater than 4 percent of the amount of the payment past due. (III) Before the end of the 15-day period beginning on the date the payment is due. (IV) More than once with respect to a single late payment. (V) The borrower fails to make a singular, non-successive regularly scheduled payment on the postsecondary education loan. (ii) Coordination with subsequent late fees No late fee may be charged to a borrower for a postsecondary education loan relating to an insufficient payment if the payment is made on or before the due date of the payment, or within any applicable grace period for the payment, if the insufficiency is attributable only to a late fee relating to an earlier payment, and the payment is otherwise a full payment for the applicable period. (iii) Payments at local branches If the loan holder, in the case of a postsecondary education loan account referred to in subparagraph (A), is a financial institution that maintains a branch or office at which payments on any such account are accepted from the borrower in person, the date on which the borrower makes a payment on the account at such branch or office shall be considered to be the date on which the payment is made for purposes of determining whether a late fee may be imposed due to the failure of the borrower to make payment on or before the due date for such payment. (I) Borrower inquiries (i) Duty of postsecondary educational lenders or servicers to respond to borrower inquiries (I) Notice of receipt of request If a borrower submits a qualified written request to the postsecondary educational lender or servicer for information relating to the servicing of the postsecondary education loan, the postsecondary educational lender or servicer shall provide a written response acknowledging receipt of the qualified written request within 5 business days unless any action requested by the borrower is taken within such period. (II) Action with respect to inquiry Not later than 30 business days after the receipt from a borrower of a qualified written request under subclause (I) and, if applicable, before taking any action with respect to the qualified written request of the borrower, the postsecondary educational lender or servicer shall— (aa) make appropriate corrections in the account of the borrower, including the crediting of any late fees, and transmit to the borrower a written notification of such correction (which shall include the name and toll-free or collect-call telephone number of a representative of the postsecondary educational lender or servicer who can provide assistance to the borrower); (bb) after conducting an investigation, provide the borrower with a written explanation or clarification that includes— (AA) to the extent applicable, a statement of the reasons for which the postsecondary educational lender or servicer believes the account of the borrower is correct as determined by the postsecondary educational lender or servicer; and (BB) the name and toll-free or collect-call telephone number of an individual employed by, or the office or department of, the postsecondary educational lender or servicer who can provide assistance to the borrower; or (cc) after conducting an investigation, provide the borrower with a written explanation or clarification that includes— (AA) information requested by the borrower or explanation of why the information requested is unavailable or cannot be obtained by the postsecondary educational lender or servicer; and (BB) the name and toll-free or collect-call telephone number of an individual employed by, or the office or department of, the postsecondary educational lender or servicer who can provide assistance to the borrower. (III) Limited extension of response time (aa) In general There may be 1 extension of the 30-day period described in subclause (II) of not more than 15 days if, before the end of such 30-day period, the postsecondary educational lender or servicer notifies the borrower of the extension and the reasons for the delay in responding. (bb) Reports to bureau Each postsecondary educational lender or servicer shall, on an annual basis, report to the Bureau the aggregate number of extensions sought by the such postsecondary educational lender or servicer under item (aa). (ii) Protection against negative consequences During the 60-day period beginning on the date on which a postsecondary educational lender or servicer receives a qualified written request from a borrower relating to a dispute regarding payments by the borrower, a postsecondary educational lender or servicer may not impose any negative consequences on the borrower relating to the subject of the qualified written request or to such period including— (I) providing negative credit information to any consumer reporting agency (as defined in section 603 of the Fair Credit Reporting Act ( 15 U.S.C. 1681a )); (II) lost eligibility for a borrower benefit; (III) late fees; (IV) interest capitalization; or (V) other financial injury. (J) Repayment specialists for at-risk borrowers (i) At-risk borrowers A postsecondary educational lender or servicer shall designate an office or other unit to act as a repayment specialist regarding postsecondary education loans for— (I) any borrower who— (aa) becomes 30 calendar days or more delinquent under the postsecondary education loan; or (bb) notifies the postsecondary educational lender or servicer pursuant to paragraph (8)(C) that the borrower is having difficulty making payment; (II) any borrower who requests information related to options to reduce or suspend the borrower's monthly payment, or otherwise indicates that the borrower is experiencing or is about to experience financial hardship or distress; (III) any borrower who has not completed the program of study for which the borrower received the loans; (IV) any borrower who is enrolled in discretionary forbearance for more than 9 of the previous 12 months; (V) any borrower who has rehabilitated or consolidated 1 or more postsecondary education loans out of default within the prior 24 months; (VI) a borrower who seeks information regarding, seeks to enter an agreement for, or seeks to resolve an issue under a repayment option that requires subsequent submission of supporting documentation; (VII) a borrower who seeks to modify the terms of the repayment of the postsecondary education loan because of hardship; and (VIII) any borrower or segment of borrowers determined by the Director or the Secretary to be at risk. (ii) Training Staff of the repayment specialist office or unit designated under clause (i) shall— (I) receive rigorous, ongoing training related to available repayment plans, loan forgiveness, and cancellation and discharge options; and (II) be trained to— (aa) assess the borrower’s long-term and short-term financial situation in discussing alternative repayment options with borrowers; (bb) inform borrowers, when there is sufficient information to determine that a borrower may be eligible, about closed-school discharge, discharge under defense to repayment, or total and permanent disability discharge prior to informing the borrower about any other options for repayment; and (cc) inform borrowers about alternative repayment options, prior to discussing forbearance and deferment. (iii) Toll-free telephone number Each postsecondary educational lender or servicer shall maintain a toll-free telephone number that shall— (I) connect directly to the repayment specialist office or unit designated under clause (i); (II) be made available on the primary internet website of the postsecondary educational lender or servicer, on monthly billing statements, and any disclosures required by paragraph (6); and (III) not subject borrowers to unreasonable call wait times. (iv) Compensation Staff of the repayment specialist office or unit designated under clause (i) shall not be compensated on the basis of the volume of calls or accounts handled, dollar amounts collected, brevity of calls, or in any other manner that may encourage undue haste and lack of diligence or quality customer service. (K) Servicemembers, veterans, and postsecondary education loans (i) Servicemember and veterans liaison Each postsecondary educational lender or servicer shall designate an employee to act as the servicemember and veterans liaison who is responsible for answering inquiries from servicemembers 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 postsecondary educational lender or servicer shall maintain a toll-free telephone number that shall— (I) connect directly to the servicemember and veterans liaison designated under clause (i); (II) be made available on the primary internet website of postsecondary educational lender or servicer and on monthly billing statements; and (III) not subject borrowers to unreasonable call wait times. (iii) Prohibition on charge offs and default A postsecondary educational lender or servicer may not charge off or report a postsecondary education loan as delinquent, assigned to collection (internally or by referral to a third party), in default, or charged off to a credit reporting agency if the borrower is on active duty in the Armed Forces (as defined in section 101(d)(1) of title 10, United States Code) serving in a combat zone (as designated by the President under section 112(c) of the Internal Revenue Code of 1986). (iv) Additional liaisons The Director, in consultation with the Secretary, shall determine additional entities with whom borrowers interact, including guaranty agencies, that shall designate an employee to act as the servicemember and veterans liaison who is responsible for answering inquiries from servicemembers 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.). (L) Borrower's loan history (i) In general A postsecondary educational lender or servicer shall make available in a secure electronic form usable by borrowers, or in writing upon request, the loan history of each borrower for each postsecondary education loan, separately designating— (I) payment history, including repayment plan and payments— (aa) made on such loan to previous postsecondary educational lenders or servicers; and (bb) qualifying toward a loan forgiveness program and designating such program; (II) loan history, including any forbearances, deferrals, delinquencies, assignment to collection, and charge offs; (III) annual percentage rate history; (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; (V) amount due to pay off the outstanding balance; and (VI) any other items determined by the Director through regulations promulgated in accordance with paragraph (17)(A). (ii) Original documentation A postsecondary educational lender or servicer shall make available to the borrower, if requested, at no charge, copies of the original loan documents and the promissory note for each postsecondary education loan. (M) Error resolution The Director, in consultation with the Secretary, shall promulgate rules requiring postsecondary educational lenders or servicers to establish error resolution procedures to allow borrowers to inquire about errors related to their postsecondary education loans and obtain timely resolution of such errors. (N) Additional servicing standards (i) Prohibitions A postsecondary educational lender or servicer may not— (I) charge a fee for responding to a qualified written request under this paragraph; (II) fail to take timely action to respond to a qualified written request from a borrower to correct an error relating to an allocation of payment or the payoff amount of the postsecondary education loan; (III) fail to take reasonable steps to avail the borrower of all possible alternative repayment arrangements to avoid default; (IV) fail to perform the obligations required under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.); (V) fail to respond within 10 business days to a request from a borrower to provide the name, address, and other relevant contact information of the loan holder of the borrower’s postsecondary education loan or, for a Federal Direct Loan or a Federal Perkins Loan, the Secretary of Education, or the institution of higher education who made the loan, respectively; (VI) fail to comply with any applicable requirement of the Servicemembers Civil Relief Act ( 50 U.S.C. App. 501 et seq.); (VII) charge a convenience, processing, or any other fee for payments made electronically or by telephone; (VIII) fail to comply with any other obligation that the Bureau, by regulation, has determined to be appropriate to carry out the consumer protection purposes of this paragraph; or (IX) fail to perform other standard servicing duties and functions. (ii) Business hours Postsecondary educational lenders or servicers shall be open for borrower inquiries and outreach during and after normal business hours, including availability after 5:00 p.m. in all continental United States time zones and some weekend hours. (iii) Additional standards The Director may promulgate regulations, in accordance with paragraph (17)(A), establishing additional servicing standards to reduce delinquencies, assignment to collections, defaults, and charge offs, and to ensure borrowers understand their rights and obligations related to their postsecondary education loans. (O) Prohibition on limiting borrower legal action by postsecondary educational lenders and servicers (i) Waiver of rights and remedies Any rights and remedies available to borrowers against postsecondary educational lenders or servicers may not be waived by any agreement, policy, or form, including by a mandatory predispute arbitration agreement or class action waiver. (ii) Predispute arbitration agreements No limitation or restriction on the ability of a borrower to pursue a claim in court with respect to a postsecondary education loan, including mandatory predispute arbitration agreements and class action waivers, shall be valid or enforceable by a postsecondary educational lender or servicer, including as a third-party beneficiary or by estoppel. (P) Preemption Nothing in this paragraph may be construed to preempt any provision of State law regarding postsecondary education loans where the State law provides stronger consumer protections. (Q) Civil liability A postsecondary educational lender or servicer that fails to comply with any requirement imposed under this paragraph shall be deemed a creditor that has failed to comply with a requirement under this chapter for purposes of liability under section 130 and such postsecondary educational lender or servicer shall be subject to the liability provisions under such section, including the provisions under paragraphs (1), (2)(A)(i), (2)(B), and (3) of section 130(a). (R) Eligibility for discharge The Director, in accordance with paragraph (17)(A), shall promulgate rules requiring postsecondary educational lenders and servicers to— (i) identify and contact borrowers who may be eligible for student loan discharge by the Secretary, including under section 437 of the Higher Education Act of 1965 ( 20 U.S.C. 1087 ); and (ii) provide the borrower, in writing, in simple and understandable terms, information about obtaining such discharge. (17) Consumer financial protection bureau requirements (A) Rulemaking The Director shall, based on consumer testing (as appropriate) and upon consideration of any final recommendations published by the Secretary under section 456(g)(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1087f(g)(3) ), promulgate regulations in consultation with the Secretary, to carry out the requirements of this subsection. (B) Compliance for certain entities (i) In general The Director may promulgate regulations under subparagraph (A) to require an entity or class of entities with which the Secretary has entered into a contract under section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f ) to comply with an alternative requirement or standard promulgated by the Director in lieu of compliance with any requirement or standard under this subsection if the Director determines that— (I) such entity or class of entities are not required by the Secretary pursuant to the contract to perform a servicing function governed by the requirement or standard, and where such function is required by the Secretary, to be performed by another entity or class of entities; or (II) the Secretary, in consultation with the Chief Operating Officer of Federal Student Aid, has promulgated regulations to establish an alternative requirement or standard with respect to such entity or class of entities that better benefits or protects borrowers and the Director incorporates such requirement or standard that better benefits or protects borrowers into regulations promulgated under subparagraph (A). (ii) Reports The Director shall report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Financial Services of the House of Representatives, and the Committee on Education and Labor of the House of Representatives on any regulations promulgated under clause (i). (18) Postsecondary educational lenders or servicers and contracts or subcontracts (A) In general Any person or entity that enters into a contract or subcontract with a postsecondary educational lender or servicer to perform the servicing of a postsecondary educational loan may fulfill the obligations of the postsecondary educational lender or servicer under this subsection. (B) Joint and several liability for service providers Any entity or person described in subparagraph (A) shall be jointly and severally liable for the actions of the entity or person in fulfilling the obligations of the postsecondary educational lender or servicer under this subsection. ; and (B) by adding at the end the following: (g) Information To be available at no charge The information required to be disclosed under this section shall be made available at no charge to the borrower. ; and (2) in section 130(a)— (A) in paragraph (3), by striking 128(e)(7) and inserting 128(e)(11) ; and (B) in the flush matter at the end, by striking or paragraph (4)(C), (6), (7), or (8) of section 128(e), and inserting or paragraph (4)(C), (10), (11), or (12) of section 128(e), . (b) Effective date (1) In general The amendments made under subsection (a) shall be effective 180 days after the date of enactment of this Act. (2) Delay The Director of the Bureau of Consumer Financial Protection shall delay the effective date of the amendments made under subsection (a) for not more than 1 additional year with respect to entities engaged in servicing pursuant to a contract awarded under section 456 of the Higher Education Act of 1965 ( 20 U.S.C. 1087f ) pending the Secretary of Education’s final recommendations required under section 456(g) of such Act related to the promulgation of regulations by the Director under section 128(e)(17) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(17) ). 4. Rehabilitation of private education loans Section 623(a)(1)(E) of the Fair Credit Reporting Act ( 15 U.S.C. 1681s–2(a)(1)(E) ) is amended to read as follows: (E) Rehabilitation of private education loans (i) In general If a borrower of a private education loan rehabilitates such loan in accordance with section 128(e)(23) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(23) ), the private educational lender or entity engaged in servicing such loan shall request that any consumer reporting agency to which the charge-off was reported remove the delinquency that led to the charge-off and the charge-off from the borrower’s credit history. (ii) Banking agencies (I) In general If a private educational lender is supervised by a Federal banking agency, the private educational lender shall seek written approval from the Federal banking agency that the terms and conditions of the loan rehabilitation program of the lender meet the requirements of section 128(e)(23) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(23) ). (II) Feedback An appropriate Federal banking agency shall provide feedback to a private educational lender within 120 days of a request for approval under subclause (I). (iii) Definitions For purposes of this subparagraph— (I) the term appropriate Federal banking agency has the meaning given the term in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (II) the term private education loan has the meaning given the term in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) ). . 5. Improved consumer protections for private education loans Section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by section 3, is further amended— (1) by adding at the end the following: (19) Discharge of private education loans in the event of death or disability of the borrower Each private education loan shall include terms that provide that the liability to repay the loan shall be canceled— (A) upon the death of the borrower; (B) if the borrower becomes permanently and totally disabled, as determined under section 437(a)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(a)(1) ) and the regulations promulgated by the Secretary under that section; or (C) if the Secretary of Veterans Affairs or the Secretary of Defense determines that the borrower is unemployable due to a service-connected condition or disability, in accordance with the requirements of section 437(a)(2) of such Act and the regulations promulgated by the Secretary under that section. (20) Terms for co-borrowers Each private education loan shall include terms that clearly define the requirements to release a co-borrower from the obligation. (21) Prohibition of acceleration of payments on private education loans (A) In general Except as provided in subparagraph (B), a private education loan executed after the date of enactment of this paragraph may not include a provision that permits the private educational lender, loan holder, or entity engaged in servicing such loan to accelerate, in whole or in part, payments on the private education loan. (B) Acceleration caused by a payment default A private education loan may include a provision that permits acceleration of the loan in cases of payment default. (22) Prohibition on denial of credit due to eligibility for protection under Servicemembers Civil Relief Act A private educational lender may not deny or refuse credit to an individual who is entitled to any right or protection provided under the Servicemembers Civil Relief Act ( 50 U.S.C. App. 501 et seq.) or subject, solely by reason of such entitlement, such individual to any other action described in paragraphs (1) through (6) of section 108 of such Act. (23) Rehabilitation of private education loans (A) In general If a borrower of a private education loan successfully and voluntarily makes 9 payments within 20 days of the due date during 10 consecutive months of amounts owed on the private education loan, or otherwise brings the private education loan current after the loan is charged off, the loan shall be considered rehabilitated, and the lender or entity engaged in servicing such loan shall request that any consumer reporting agency to which the charge off was reported remove the delinquency that led to the charge off and the charge off from the borrower’s credit history. (B) Terms No private educational lender shall offer a borrower rehabilitation of loans where the payment required to rehabilitate a defaulted private education loan is less than the monthly payment amount required upon completion of rehabilitation. ; (2) in paragraph (1)— (A) by striking subparagraph (D) and inserting the following: (D) requirements for a co-borrower, including— (i) any changes in the applicable interest rates without a co-borrower; and (ii) any conditions the borrower is required meet in order to release a co-borrower from the private education loan obligation; ; (B) by redesignating subparagraphs (O), (P), (Q), and (R) as subparagraphs (P), (Q), (R), and (S), respectively; and (C) by inserting after subparagraph (N) the following: (O) in the case of a refinancing of education loans that include a Federal student loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.)— (i) a list containing each loan to be refinanced, which shall identify whether the loan is a private education loan or a Federal student loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.); and (ii) benefits that the borrower may be forfeiting, including income-driven repayment options, opportunities for loan forgiveness, forbearance or deferment options, interest subsidies, and tax benefits; ; and (3) in paragraph (2)— (A) by redesignating subparagraphs (O) and (P) as subparagraphs (P) and (Q), respectively; and (B) by inserting after subparagraph (N) the following: (O) in the case of a refinancing of education loans that include a Federal student loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.)— (i) a list containing each loan to be refinanced, which shall identify whether the loan is a private education loan or a Federal student loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.); and (ii) benefits that the borrower may be forfeiting, including income-driven repayment options, opportunities for loan forgiveness, forbearance or deferment options, interest subsidies, and tax benefits; . 6. Know before you owe (a) Amendments to the Truth in Lending Act (1) In general Section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by sections 3 and 5, is further amended— (A) by striking paragraph (3) and inserting the following: (3) Institutional certification required (A) In General Except as provided in subparagraph (B), before a creditor may issue any funds with respect to an extension of credit described in this subsection, the creditor shall obtain from the relevant 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 ( 20 U.S.C. 1087kk et seq.); and (iii) the difference between— (I) such cost of attendance; and (II) the student's estimated financial assistance, including such assistance received under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.) (except for Federal Direct PLUS Loans made on behalf of the student) and other financial assistance known to the institution, as applicable (except for loans made under the Public Health Service Act ( 42 U.S.C. 201 et seq.)). (B) Exception Notwithstanding subparagraph (A), a creditor may issue funds, not to exceed the amount described in subparagraph (A)(iii), with respect to an extension of credit described in this subsection without obtaining from the relevant 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. ; and (B) by adding at the end the following: (24) Provision of information (A) Provision of Information to Students (i) Loan Statement A creditor that issues any funds with respect to an extension of credit described in this subsection shall send loan statements, where such loan is to be used for a student, to borrowers of such funds not less than once every 3 months during the time that such student is enrolled at 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. . (2) Definition of Private Education Loan Section 140(a)(8)(A) of the Truth in Lending Act ( 15 U.S.C. 1650(a)(8)(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 (23) of section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by paragraph (1). Such regulations shall become effective not later than 6 months after their date of issuance. (b) Amendments to the Higher Education Act of 1965 (1) Program participation agreements Section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ) is amended by striking paragraph (28) and inserting the following: (28) (A) Upon the request of a private educational lender, acting in connection with an application initiated by a borrower for a private education loan in accordance with section 128(e)(3) of the Truth in Lending Act ( 15 U.S.C. 1638(e)(3) ), the institution shall within 15 days of receipt of a certification request— (i) provide such certification to such private educational lender— (I) that the student who initiated the application for the private education loan, or on whose behalf the application was initiated, is enrolled or is scheduled to enroll at the institution; (II) of such student's cost of attendance at the institution as determined under part F of this title; and (III) of the difference between— (aa) the cost of attendance at the institution; and (bb) the student's estimated financial assistance received under this title (except for Federal Direct PLUS Loans made on behalf of the student) and other assistance known to the institution, as applicable (except for loans made under the Public Health Service Act ( 42 U.S.C. 201 et seq.)); (ii) notify the creditor that the institution has received the request for certification and will need additional time to comply with the certification request; or (iii) provide notice to the private educational lender of the institution’s refusal to certify the private education loan under subparagraph (D). (B) With respect to a certification request described in subparagraph (A), and prior to providing such certification under subparagraph (A)(i) or providing notice of the refusal to provide certification under subparagraph (A)(iii), the institution shall— (i) determine whether the student who initiated the application for the private education loan, or on whose behalf the application was initiated, has applied for and exhausted the Federal financial assistance available to such student under this title and inform the student accordingly; and (ii) provide the borrower whose loan application has prompted the certification request by a private educational lender, as described in subparagraph (A)(i), with the following information and disclosures: (I) The availability of, and the borrower’s potential eligibility for, Federal financial assistance under this title, including disclosing the terms, conditions, interest rates, and repayment options and programs of Federal student loans. (II) The borrower's ability to select a private educational lender of the borrower's choice. (III) The impact of a proposed private education loan on the borrower's potential eligibility for other financial assistance, including Federal financial assistance under this title. (IV) The borrower’s right to accept or reject a private education loan within the 30-day period following a private educational lender’s approval of a borrower’s application and about a borrower’s 3-day right to cancel period. (C) For purposes of this paragraph, the terms private educational lender and ‘private education loan’ have the meanings given such terms in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ). (D) (i) An institution shall not provide a certification with respect to a private education loan under this paragraph unless the private education loan includes terms that provide— (I) the borrower alternative repayment options, including loan consolidation or refinancing; and (II) for the discharge of the borrower and co-borrower's, if applicable, liability to repay the loan pursuant to paragraphs (19) and (20) of section 128(e) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ). (ii) In this paragraph, the term disability means a permanent and total disability, as determined in accordance with the regulations of the Secretary of Education, or a determination by the Secretary of Veterans Affairs that the borrower is unemployable due to a service connected-disability. . (2) Effective date The amendment made by paragraph (1) shall take effect on the effective date of the regulations described in subsection (a)(3). (3) Preferred lender arrangement Section 151(8)(A)(ii) of the Higher Education Act of 1965 ( 20 U.S.C. 1019(8)(A)(ii) ) is amended by inserting certifying, after promoting, . (c) Report (1) In general Not later than 24 months after the issuance of regulations under subsection (a)(3), the Director of the Bureau of Consumer Financial Protection and the Secretary of Education shall jointly submit to Congress a report on the compliance of— (A) private educational lenders with section 128(e)(3) of the Truth in Lending Act ( 15 U.S.C. 1638(e) ), as amended by subsection (a); and (B) institutions of higher education with section 487(a)(28) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ), as amended by subsection (b). (2) Contents The report under paragraph (1) shall include information about the degree to which specific institutions utilize certifications in effectively— (A) encouraging the exhaustion of Federal student loan eligibility by borrowers prior to taking on private education loan debt; and (B) lowering student private education loan debt by borrowers. 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: 493E. Centralized point of access Not later than 2 years after the date of enactment of the Student Loan Borrower Bill of Rights , the Secretary shall establish a centralized point of access for all borrowers of loans that are made, insured, or guaranteed under this title that are in repayment, including a central location for account information and payment processing for such loan servicing, regardless of the specific entity engaged in servicing. . 8. Education loan ombudsman Section 1035 of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5535 ) is amended— (1) in the section heading, by striking private ; (2) in subsection (a)— (A) by striking a Private and inserting an ; and (B) by striking private ; (3) in subsection (b), by striking private education student loan and inserting postsecondary education loan ; (4) in subsection (c)— (A) in the matter preceding paragraph (1), by striking subsection and inserting section ; (B) in paragraph (1), by striking private ; (C) by striking paragraph (2) and inserting the following: (2) coordinate with the unit of the Bureau established under section 1013(b)(3), in order to monitor complaints by borrowers and responses to those complaints by the Bureau or other appropriate Federal or State agency; ; and (D) in paragraph (3), by striking private ; (5) in subsection (d)— (A) in paragraph (2)— (i) by striking on the same day annually ; and (ii) by inserting and be made available to the public after Representatives ; and (B) by adding at the end the following: (3) Contents The report required under paragraph (1) shall include information on the number, nature, and resolution of complaints received, disaggregated by postsecondary educational lender or servicer, region, State, and institution of higher education. ; and (6) by striking subsection (e) and inserting the following: (e) Definitions In this section: (1) Borrower The term borrower means a borrower of a postsecondary education loan. (2) Institution of higher education The term institution of higher education has the meaning given the term in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ). (3) Postsecondary education loan The term postsecondary education loan means— (A) a private education loan, as defined in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ); or (B) a loan made, insured, or guaranteed under part B, D, or E of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1071 et seq., 1087a et seq., and 1087aa et seq.). . 9. Report on private education loans and private educational lenders (a) In general Not later than 2 years after the date of enactment of this Act, the Director of the Bureau of Consumer Financial Protection and the Secretary of Education, in consultation with the Commissioners of the Federal Trade Commission and the Attorney General of the United States, shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Financial Services of the House of Representatives, and the Committee on Education and Labor of the House of Representatives on private education loans (as that term is defined in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 )) and private educational lenders (as that term is defined in such section). (b) Contents The report required by this section shall examine, at a minimum— (1) the growth and changes of the private education loan market in the United States; (2) factors influencing such growth and changes; (3) the extent to which students and parents of students rely on private education loans to finance postsecondary education and the private education loan indebtedness of borrowers; (4) the characteristics of private education loan borrowers, including— (A) the types of institutions of higher education that they attend; (B) socioeconomic characteristics (including income and education levels, racial characteristics, geographical background, age, and gender); (C) what other forms of financing borrowers use to pay for education; (D) whether they exhaust their Federal loan options before taking out a private education loan; (E) whether such borrowers are dependent or independent students (as determined under part F of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087kk et seq.)) or parents of such students; (F) whether such borrowers are students enrolled in a program leading to a certificate, license, or credential other than a degree, an associates degree, a baccalaureate degree, or a graduate or professional degree; and (G) if practicable, employment and repayment behaviors; (5) the characteristics of private educational lenders, including whether such creditors are for-profit, nonprofit, or institutions of higher education; (6) the underwriting criteria used by private educational lenders, including the use of cohort default rate (as such term is defined in section 435(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m) )); (7) the terms, conditions, and pricing of private education loans; (8) the consumer protections available to private education loan borrowers, including the effectiveness of existing disclosures and requirements and borrowers’ awareness and understanding about terms and conditions of various financial products; (9) whether Federal regulators and the public have access to information sufficient to provide them with assurances that private education loans are provided in accord with the Nation’s fair lending laws and that allows public officials to determine lender compliance with fair lending laws; and (10) any statutory or legislative recommendations necessary to improve consumer protections for private education loan borrowers and to better enable Federal regulators and the public to ascertain private educational lender compliance with fair lending laws. 10. Report on postsecondary education loan servicing Not later than 1 year after the date of enactment of this Act, the Director of the Bureau of Consumer Financial Protection and the Secretary of Education shall submit a joint report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Financial Services of the House of Representatives, and the Committee on Education and Labor of the House of Representatives on servicing of postsecondary education loans, including— (1) any legislative recommendations to improve servicing standards; and (2) information on proactive early intervention methods by postsecondary educational lenders or servicers to help distressed postsecondary education loan borrowers enroll in any eligible repayment plans.