< Back to H.R. 5458 (111th Congress, 2009–2010)

Text of the Christopher Bryski Student Loan Protection Act

This bill was introduced in a previous session of Congress and was passed by the House on September 28, 2010 but was never passed by the Senate. The text of the bill below is as of May 28, 2010 (Introduced).

This is not the latest text of this bill.

Source: GPO

I

111th CONGRESS

2d Session

H. R. 5458

IN THE HOUSE OF REPRESENTATIVES

May 28, 2010

(for himself, Mr. Pascrell, Mr. Cummings, and Mr. Rothman of New Jersey) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Truth in Lending Act and the Higher Education Act of 1965 to require additional disclosures and protections for students and cosigners with respect to student loans, and for other purposes.

1.

Short title; findings

(a)

Short title

This Act may be cited as the Christopher Bryski Student Loan Protection Act and Christopher’s Law .

(b)

Findings

The Congress finds the following:

(1)

There is no requirement for Federal or private education lenders to provide information with respect to, and discuss the benefit of, creating an advance directive (such as durable power of attorney, living will, etc.) for financial, legal, and medical decisionmaking in accordance with State law to be used in the event of the death, incapacitation, or disability of the student or such cosigner (if any).

(2)

In harsh contrast to existing comprehensive policies of the Secretary of Education, no requirement exists for private education lenders to provide information with respect to, and discuss the benefit of, credit insurance in connection with private education loans that would protect the signer, and any such cosigner, in the event of their death, incapacitation, or disability.

(3)

No requirement exists for private education lenders’ master promissory notes to include the same clear and concise wording in regards to the responsible party in the event the signer or cosigner becomes disabled, incapacitated, or dies. A clear and concise definition would provide standard terms and conditions within private education lenders’ master promissory notes with respect to signer and cosigner obligations. Not requiring clear and concise obligations allows for a very unclear delineation of responsibility on the part of the private education lender, which is a great example of the freedom large private education lenders currently have.

(4)

No standard forms exist for defining disability, incapacity or death of a private education loan signer, or cosigner.

(5)

No requirement exists for eligible lending institutions, as defined with the Higher Education Act of 1965, to disclose to the borrower, information on the conditions required to discharge the loan due to the disability, incapacity or death of the signer or cosigner (if any).

(6)

Congress modeled the definition of disability in the Americans with Disabilities Act of 1990 on the definition in section 504 of the Rehabilitation Act of 1973, which, through the time of the enactment of the Americans with Disabilities Act of 1990, had been construed broadly to encompass both actual and perceived limitations, and limitations imposed by society.

(7)

Of the 1,400,000 people who sustain a traumatic brain injury each year in the United States, 50,000 die; 235,000 are hospitalized; and 1,100,000 are treated and released from an emergency department.

(8)

It is estimated that the annual incidence of spinal cord injury, not including those who die at the scene of the accident, is approximately 40 cases per 1,000,000 people in the United States or approximately 12,000 new cases each year. Since there have not been any overall incidence studies of spinal cord injuries in the United States since the 1970s, it is not known if incidence has changed in recent years.

(9)

The number of disabled veterans has jumped by 25 percent since 2001 to 2,900,000. Today’s veterans, disabled or not, number nearly 24,000,000.

(10)

In the 2007–2008 academic year, 13 percent of students attending a 4-year public school, and 26.2 percent of students attending a 4-year private school, borrowed monies from private loan providers.

(11)

According to Sallie Mae, in 2009, the number of cosigned private educational loans increased from 66 percent to 84 percent of all private educational loans.

2.

Additional student loan protections

(a)

In general

Section 140 of the Truth in Lending Act (15 U.S.C. 1650) is amended by adding at the end the following new subsection:

(f)

Additional protections relating to death or disability of signer or cosigner of a private education loan

(1)

Obligation to discuss advance directives

In conjunction with—

(A)

any student loan counseling provided by a covered educational institution to any new signer and cosigner (if any) at the time of any loan origination, loan reapplication, or loan consolidation, or at the time the cosigner assumes responsibility for repayment, the institution shall provide information with respect to, and discuss the benefit of, creating an advance directive (such as a durable power of attorney, living will, etc.) for financial, legal, and medical decisionmaking, in accordance with State law, in the event of the death, incapacitation, or disability of the signer or cosigner (if any); and

(B)

any negotiation or other discussion with respect to any private education loan, the private educational lender involved in such loan shall discuss with the signer, and cosigner (if any), the benefit of creating an advance directive (such as a durable power of attorney, living will, etc.) for financial, legal, and medical decisionmaking, in accordance with State law, with respect to such loan, in the event of the death, incapacitation, or disability of the student or such cosigner (if any).

(2)

Clear and complete description of cosigner’s obligation

In the case of any private education lender who extends a private education loan for which any cosigner is jointly liable, the lender shall define, clearly and concisely, the terms of such person’s obligations with respect to the loan, including the effect the death, incapacitation, or disability of the signer or cosigner (if any) would have on any such obligation, in language that the Board determines would give a reasonable person a reasonable apprehension of the obligation being assumed by becoming a cosigner for the loan.

(3)

Credit insurance

In the case of any private education loan for which there is a cosigner, the private educational lender involved in such loan—

(A)

shall provide information with respect to, and discuss the benefit of credit insurance with the signer, and the cosigner, in connection with such loan that would protect the signer and any cosigner in the event of the death, incapacitation, or disability of the signer or any such cosigner;

(B)

shall discuss with the student and the cosigner the benefit of credit insurance in connection with such loan that would protect the student and any cosigner in the event of the death or disability of the student or any such cosigner;

(C)

may provide or make arrangements for the provision of any credit insurance referred to in subparagraph (A) in conjunction with the loan; and

(D)

may not—

(i)

establish any condition or requirement that the signer and cosigner (if any) has or has not obtained any such consumer credit insurance from the private educational lender, and affiliate of the private education lender or any other consumer credit insurance provider; or

(ii)

extend or deny a loan, or fix or vary the terms of the loan, on the basis that the signer and cosigner (if any) has or has not obtained any such consumer credit insurance from the private educational lender, and affiliate of the private education lender, or any other consumer credit insurance provider.

(4)

Model forms

The Board shall publish model forms under section 105 for describing a cosigner’s obligation for purposes of paragraph (2).

(5)

Regulations defining death or disability

(A)

In general

The Board shall—

(i)

prescribe regulations defining the manner and standards for establishing that a private education loan signer, or consigner (if any), has died or become incapacitated or disabled; and

(ii)

implement and enforce such regulations in connection with any private education loan.

(B)

Coordination with Secretary of Education

In prescribing regulations under subparagraph (A), the Board shall—

(i)

consult with the Secretary of Education; and

(ii)

conform such regulations with the regulations prescribed by such Secretary under section 437(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)(1)) to the fullest extent practicable, including safeguards to prevent fraud and abuse.

(C)

Determination by the Secretary of Veterans Affairs

The regulations prescribed under subparagraph (A) shall provide that a determination described in section 437(a)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)(2)) by the Secretary of Veterans Affairs with respect to any person shall be dispositive for such person for purposes of this subsection and any agreement covered by this subsection.

.

(b)

Definitions

Subsection (a) of section 140 of the Truth in Lending Act (15 U.S.C. 1650(a)) is amended by adding at the end the following new paragraphs:

(9)

Advance directive

The term advance directive means a written instruction, such as a living will or durable power of attorney for health care, recognized under State law (whether statutory or as recognized by the courts of the State), relating to the provision of health care when the individual is incapacitated.

(10)

Cosigner

The term cosigner

(A)

means any individual who is liable for the obligation of another without compensation, regardless of how designated in the contract or instrument;

(B)

includes any person whose signature is requested as condition to grant credit or to forebear on collection; and

(C)

does not include a spouse of an individual referred to in subparagraph (A) whose signature is needed to perfect security interest individual.

(11)

Credit insurance

The term credit insurance has the meaning given to such term by the Board in regulations for purposes of this section.

(12)

Disability

The term disability has the meaning given to such term in section 3 of the Americans with Disabilities Act of 1990.

(13)

Durable power of attorney

The term durable power of attorney meaning given to such term in the Uniform Durable Power of Attorney Act of 1979 and sections 5-501 through 5-505 of the Uniform Probate Code, as in effect in any State.

(14)

Incapacity

The terms incapacity, incapacitated, or incapacitation have the meanings given to such terms in the Family and Medical Leave Act of 1968, and regulations prescribed under such Act.

.

3.

Federal student loans

(a)

Federal PLUS loans

Section 428B of the Higher Education Act of 1965 (20 U.S.C. 1078–2) is amended by adding at the end the following:

(g)

Disclosure

An eligible lender shall disclose to a prospective borrower, in simple and understandable terms, at the time the lender provides an application for a PLUS loan, information with respect to creating a durable power of attorney to be used in the event of the death or disability of the borrower (or the student on whose behalf the loan is borrowed by the parent borrower) including the uses and benefits of creating such a power of attorney with respect to student loans and other financial obligations of the borrower.

.

(b)

Federal Consolidation Loans

Section 428C(b)(1)(F) of the Higher Education Act of 1965 (20 U.S.C. 1078–3(b)(1)(F)) is amended—

(1)

by redesignating clauses (vi) and (vii) as clauses (vii) and (viii), respectively; and

(2)

by inserting after clause (v) the following new clause:

(vi)

information with respect to creating an advanced directive (such as a durable power of attorney, living will, etc.) for financial legal and medical decisionmaking in accordance with State law in the event of the death, incapacitation, or disability of the borrower, including the uses and benefits of such an advanced directive with respect to student loans and other financial obligations of the borrower;

.

(c)

Entrance counseling for Federal loans

Section 485(l)(2) of the Higher Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at the end the following:

(L)

Information on the conditions required to discharge the loan due to the death, incapacitation, or disability of the borrower, in accordance with section 437(a), and an explanation that, in the case of a private education loan made through a private lender, the borrower, the borrower’s estate, and any consigner of a such a private education loan may be obligated to repay the full amount of the loan, regardless of the death, incapacitation, or disability of the borrower.

(M)

Information with respect to creating an advanced directive (such as a durable power of attorney, living will, etc.) for financial legal and medical decisionmaking in accordance with State law a durable power of attorney to be used in the event of the death, incapacitation, or disability of the borrower, including an explanation of the uses and benefits of such an advanced directive with respect to student loans and other financial obligations of the borrower.

.