1. Before the extension of a private education loan that requires a cosigner, a private education lender shall deliver to the cosigner information concerning, without limitation:
(a)How the private education loan obligation will appear on the cosigner’s credit;
(b)How the cosigner will be notified if the private education loan becomes delinquent;
(c)How the cosigner can cure a delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility; and
(d)The eligibility of the cosigner to be released from his or her obligation on the private education loan, including, without limitation, the number of on-time payments and any other criteria required to approve the release of the cosigner from his or her obligation on the private education loan.
2. For any pri
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1. Before the extension of a private education loan that requires a cosigner, a private education lender shall deliver to the cosigner information concerning, without limitation:
(a) How the private education loan obligation will appear on the cosigner’s credit;
(b) How the cosigner will be notified if the private education loan becomes delinquent;
(c) How the cosigner can cure a delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility; and
(d) The eligibility of the cosigner to be released from his or her obligation on the private education loan, including, without limitation, the number of on-time payments and any other criteria required to approve the release of the cosigner from his or her obligation on the private education loan.
2. For any private education loan that obligates a cosigner, a private education lender shall provide the private education loan borrower and the cosigner an annual written notice containing information about the release of the cosigner from his or her obligation on the private education loan, including, without limitation:
(a) Any administrative, non-judgmental criteria the private education lender requires to approve the release of the cosigner from the private education loan obligation; and
(b) The process for applying for cosigner release.
3. If the private education loan borrower has met the applicable payment requirements to be eligible for cosigner release, the private education lender shall send the private education loan borrower and the cosigner a written notification by mail and by electronic mail, if the private education loan borrower or cosigner has elected to receive electronic communications from the private education lender, informing the private education loan borrower and cosigner that the payment requirement to be eligible for cosigner release has been met. The notification must also include information about any additional criteria to qualify for cosigner release and the procedure to apply for cosigner release.
4. A private education lender shall provide written notice to a private education loan borrower who applies for cosigner release but whose application is incomplete. The written notice must include a description of the information needed to consider the application complete and the date by which the applicant must furnish the missing information.
5. Within 30 days after a private education loan borrower submits a completed application for cosigner release, the private education lender shall send the private education loan borrower and cosigner a written notice that informs the private education loan borrower and cosigner whether the application for cosigner release has been approved or denied. If the private education lender denies a request for cosigner release, the private education loan borrower may request any documents or information used in the determination, including, without limitation, the credit score threshold used by the private education lender, the private education loan borrower’s consumer credit report, the private education loan borrower’s credit score and any other documents specific to the private education loan borrower. The private education lender shall also provide any notices of adverse action required under applicable federal law if the denial is based in whole or in part on any information contained in a consumer credit report.
6. In response to a written or oral request for cosigner release, a private education lender shall provide the information described in subsection 2.
7. A private education lender shall not impose any restriction that permanently bars a private education loan borrower from qualifying for cosigner release, including, without limitation, restricting the number of times a private education loan borrower may apply for cosigner release.
8. A private education lender shall not impose any negative consequences on any private education loan borrower or cosigner during the 60 days following the issuance of the notice provided pursuant to subsection 4 or until the private education lender makes a final determination about a private education loan borrower’s application for cosigner release. For the purposes of this subsection, “negative consequences” includes, without limitation, the imposition of additional eligibility criteria, negative credit reporting, lost eligibility for cosigner release, late fees, interest capitalization or other financial injury.
9. For any private education loan made on or after January 1, 2024, a private education lender shall not require more than 12 consecutive, on-time payments as criteria for cosigner release. Any private education loan borrower who has paid the equivalent of 12 months of principal and interest payments within any 12-month period shall be deemed to have satisfied the consecutive, on-time payment requirement, even if the private education loan borrower has not made payments monthly during the 12-month period.
10. If a private education loan borrower or cosigner requests a change in terms that restarts the count of consecutive, on-time payments required for cosigner release, the private education lender shall notify the private education loan borrower and cosigner in writing of the impact of the change and provide the private education loan borrower or cosigner the right to withdraw or reverse the request to avoid that impact.
11. A private education loan borrower has the right to request an appeal of a private education lender’s determination to deny a request for cosigner release, and the private education lender shall permit the private education loan borrower to submit additional documentation evidencing the private education loan borrower’s ability, willingness and stability to meet the payment obligations. The private education loan borrower may request review of the determination made regarding cosigner release by another employee of the private education lender.
12. A private education lender shall establish and maintain a comprehensive record management system reasonably designed to ensure the accuracy, integrity and completeness of data and other information about cosigner release applications and to ensure compliance with applicable state and federal laws, including, without limitation, the federal Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq., and the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. This system must include the number of cosigner release applications received, the approval and denial rate and the primary reasons for any denial.
13. 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 private education loan borrower.
14. If a private education lender provides electronic access to documents and records for a private education loan borrower, the private education lender shall provide equivalent electronic access to the cosigner.