- Published: Wednesday, March 15, 2017 12:47 PM
Senate Bill 1351 establishes the Student Loan Bill of Rights in Illinois to provide as much protection as possible for student borrowers, a population that frequently is targeted by bad actors in the student loan industry.
“At a time when a quarter of student loan borrowers are behind in their payments, we need to make sure borrowers understand their rights and have access to resources that will prevent them from defaulting on their loans,” Biss said. “I am pleased to work with Attorney General Lisa Madigan on behalf of student borrowers, and I encourage each of my colleagues to support this measure.”
The Student Loan Bill of Rights would help to ensure students and their families receive clear information about the money they borrow for higher education and how their student loans are serviced. Among the protections offered in the legislation:
- Requires student loan services to provide specialized employees to assist borrowers with questions about loan payments, explain repayment options and evaluate a borrower’s financial situation to determine which payment plan is appropriate.
- Requires loan servicers to give borrowers accurate information on billing statements and properly process borrowers’ payments, and bars servicers from charging unreasonable fees.
- Requires loan servicers to tell borrowers when and how their federal loans may be discharged due to a borrower’s disability or a problem with the school the borrower attended.
- Requires loan servicers to provide information so cosigners know the conditions of being released from their obligations.
- Requires servicers to follow procedures when a loan is transferred to a new servicer to ensure continuity and ensure borrowers’ payments are properly handled.
- Ensures borrowers have the right to request information and file account disputes with their servicer and appeal any servicer determination.
- Creates a student loan ombudsman in the office of the attorney general to assist borrowers with student loans.
- Establishes a student loan servicing license with the Illinois Department of Financial and Professional Regulation to qualify, oversee and discipline services for violating the Student Loan Bill of Rights.