(a) For a private education loan issued on or after the applicability date of this section:
(1) A private education lender or student loan servicer acting on behalf of a private education lender when notified of the total and permanent disability of a student loan borrower or cosigner shall release any cosigner from the obligations under the private education loan. The private education lender shall not attempt to collect a payment from a cosigner after being notified of the total and permanent disability of the cosigner or borrower.
(2) A private education lender shall notify a student loan borrower and cosigner for a private education loan if either a cosigner or the student loan borrower is released from the obligations of the private education loan under this subsection within 30 days of the release.
(3) A private education lender that extends a private education loan to a student loan borrower shall provide the student loan borrower an option to designate an individual to have the legal authority to act on behalf of the student loan borrower with respect to the private education loan in the event of the total and permanent disability of the student loan borrower.
(4) In the event a cosigner is released from the obligations of a private education loan pursuant to paragraph (1) of this subsection, the private education lender shall not require the student loan borrower to obtain another cosigner on the private education loan obligation.
(5) A private education lender shall not declare a default or accelerate the debt against the student loan borrower on the sole basis of the release of the cosigner from the private education loan obligation.
(6) A private education lender shall when notified of the total and permanent disability of a student loan borrower discharge the liability of the student loan borrower and cosigner on the private education loan.
(7) After receiving a notification pursuant to paragraph (1) of this subsection, the private education lender shall not attempt to collect on the outstanding liability of the student loan borrower or cosigner or monitor the disability status of the student loan borrower after the date of discharge.
(b) Availability of alternative repayment plans.
(1) If a private education lender offers a student loan borrower flexible or modified repayment options in connection with a private education loan, those flexible repayment options shall be made available to all borrowers and the private education lender shall:
(A) Provide on its website a description of any alternative repayment options offered by the private education lender for a private education loan; and
(B) Establish policies and procedures to facilitate evaluation of private education loan flexible repayment option requests, including providing accurate information regarding any private education loan alternative repayment options that may be available to the student loan borrower through a promissory note or that may have been marketed to the student loan borrower through marketing materials.
(2) A private education lender or a student loan servicer acting on behalf of a private education lender shall consistently present and offer flexible or modified private education loan repayment options to student loan borrowers with similar financial circumstances, if the private education lender offers such repayment options.
(1) Prior to the extension of a private education loan that requires a cosigner, a private education lender shall deliver the following information to the cosigner:
(A) How the private education loan obligation shall appear on the cosigner's credit;
(B) How the cosigner shall be notified if the private education loan becomes delinquent, including how the cosigner can cure the delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility; and
(C) Eligibility for release of the cosigner's obligation on the private education loan, including the number of on-time payments and any other criteria required to approve the release of the cosigner from the private education loan obligation.
(2) Prior to offering a person a private education loan that is being used to refinance an existing education loan, a private education lender shall provide the person a disclosure that benefits and protections applicable to the existing loan may be lost due to the refinancing.
(3) The information provided pursuant to this section shall be provided on a one-page information sheet in a 12-point font and shall be written in simple, clear, understandable and easily readable language as provided in the Plain Writing Act of 2010 (5 U.S.C. § 301, note).
(1) For any private education loan that obligates a cosigner, a private education lender shall provide the student loan borrower and the cosigner an annual written notice containing information about cosigner release, including the administrative, objective criteria the private education lender requires to approve the release of the cosigner from the private education loan obligation and the process for applying for cosigner release.
(2) If the student loan borrower has met the applicable requirements to be eligible for cosigner release, the private education lender shall send the student loan borrower and the cosigner a written notification by U.S. mail, and by electronic mail when a student loan borrower or cosigner has elected to receive electronic communications from the private education lender, informing the student loan borrower and cosigner that the requirements to be eligible for cosigner release have been met.
(3) A private education lender shall provide written notice to a borrower who applies for cosigner release, but whose application is incomplete. The written notice shall include a description of the information needed to consider the application complete and the date by which the applicant must furnish the missing information.
(A) Within 30 days after a student loan borrower submits a completed application for cosigner release, the private education lender shall send the student loan borrower and the cosigner a written notice that informs the student loan borrower and cosigner whether the cosigner release application has been approved or denied.
(B) If the private education lender denies the request for cosigner release, the student loan borrower may request any documents or information used in the determination, including the credit score threshold used by the private education lender, the student loan borrower's consumer report, the student loan borrower's credit score, and any other documents specific to the student loan borrower. The private education lender shall also provide any adverse action notices required under applicable federal law if the denial is based in whole or in part on any information contained in a consumer report.
(5) In response to a written or oral request for cosigner release, a private education lender shall provide the information described in paragraph (1) of this subsection.
(6) A private education lender shall not impose any restriction that permanently bars a student loan borrower from qualifying for cosigner release, including restricting the number of times a student loan borrower may apply for cosigner release.
(A) A private education lender shall not impose any negative consequences on a student loan borrower or cosigner during the 60 days following the issuance of the notice required pursuant to paragraph (3) of this subsection or until the private education lender makes a final determination about a borrower's cosigner release application.
(B) For the purpose of this paragraph, the term "negative consequences" includes the imposition of additional eligibility criteria, negative credit reporting, lost eligibility for cosigner release, late fees, interest capitalization, or other financial penalty.
(A) For a private education loan executed after the applicable date of this section, a private education lender shall not require more than 12 consecutive, on-time payments as a requirement for cosigner release.
(B) A student loan borrower who has paid the equivalent of 12 months of principal and interest payments within any 12-month period shall be considered to have satisfied a consecutive, on-time payment requirement even if the student loan borrower has not made payments monthly during the 12-month period.
(9) If a student loan borrower or cosigner requests a change in terms that restarts the counting of consecutive, on-time payments required for cosigner release, the private education lender shall notify the student loan borrower and cosigner in writing of the impact of the change and provide the student loan borrower or the cosigner the right to withdraw or reverse the request to avoid that impact.
(A) A student loan borrower shall have the right to request a reconsideration of a private education lender's denial of a request for cosigner release, and the private education lender shall permit the student loan borrower to submit additional documentation evidencing the borrower's ability to meet the payment obligations.
(B) The student loan borrower may request review of the cosigner release determination by a different employee than the employee who made the original determination.
(A) A private education lender shall establish and maintain a comprehensive record-management system ("record-management system") reasonably designed to ensure the accuracy, integrity, and completeness of data and other information about cosigner release applications and compliance with applicable District and federal laws, including the Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq .) and the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq .).
(B) The record-management system shall also include the:
(i) Number of cosigner release applications received;
(ii) Approval and denial rate; and
(iii) primary reasons for any denial.
(1) A private education lender shall provide a cosigner with access to all documents or records related to the cosigned private education loan that are available to the student loan borrower.
(2) If a private education lender provides electronic access to documents and records for a student loan borrower, it shall provide the equivalent electronic access to the cosigner.
(3) Upon written notice from the student loan borrower or cosigner, the private education lender may redact or withhold contact information for the student loan borrower and cosigner.