Senate
File
539
-
Introduced
SENATE
FILE
539
BY
COMMITTEE
ON
EDUCATION
(SUCCESSOR
TO
SF
318)
A
BILL
FOR
An
Act
establishing
the
office
of
student
loan
ombudsman
within
1
the
college
student
aid
commission.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
261.2,
Code
2019,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
13.
Support,
maintain,
and
designate
a
3
student
loan
ombudsman
to
administer
the
office
of
student
loan
4
ombudsman
in
accordance
with
section
261.8.
5
Sec.
2.
NEW
SECTION
.
261.8
Office
of
student
loan
ombudsman
6
——
duties.
7
1.
Office
established.
The
office
of
student
loan
ombudsman
8
is
established
within
the
commission.
9
2.
Appointment.
The
commission
shall
appoint
the
student
10
loan
ombudsman.
11
3.
Duties.
The
student
loan
ombudsman,
in
consultation
with
12
the
commission,
shall
do
all
of
the
following:
13
a.
Receive,
review,
and
attempt
to
resolve,
in
collaboration
14
with
postsecondary
institutions,
complaints
from
student
15
loan
borrowers
involving
entities
that
include
but
are
not
16
limited
to
student
loan
servicers,
covered
institutions
and
17
lenders
providing
private
educational
loans,
as
those
terms
18
are
defined
in
section
261F.1,
and
any
other
participants
in
19
student
loan
lending,
including
but
not
limited
to
originators
20
servicing
their
own
student
education
loans.
If,
in
meeting
21
the
requirements
of
this
paragraph,
the
student
loan
ombudsman
22
has
reason
to
believe
that
a
person
or
entity
has
knowingly
23
engaged
in
an
act
or
practice
that
constitutes
a
violation
of
24
chapter
261F
or
section
714.16,
the
student
loan
ombudsman
25
shall
submit
the
ombudsman’s
information
and
findings
to
the
26
commission
and
to
the
attorney
general
for
further
review
and
27
appropriate
action.
28
b.
Compile
and
analyze
data
on
student
loan
borrower
29
complaints
as
described
in
paragraph
“a”
.
30
c.
Assist
student
loan
borrowers
to
understand
their
rights
31
and
responsibilities
under
the
terms
of
student
education
32
loans.
33
d.
Provide
information
to
the
public,
agencies,
members
of
34
the
general
assembly,
and
others
regarding
the
problems
and
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concerns
of
student
loan
borrowers
and
make
recommendations
for
1
resolving
such
problems
and
concerns.
2
e.
Analyze
and
monitor
the
development
and
implementation
of
3
federal,
state,
and
local
laws,
ordinances,
regulations,
rules
4
and
policies
relating
to
student
loan
borrowers
and
recommend
5
any
necessary
changes.
6
f.
Review
the
complete
student
education
loan
history
for
a
7
student
loan
borrower
who
provides
written
consent
for
such
a
8
review.
9
g.
Disseminate
information
concerning
the
availability
of
10
the
student
loan
ombudsman
to
assist
student
loan
borrowers
and
11
potential
student
loan
borrowers,
public
institutions
of
higher
12
education,
student
loan
servicers,
and
any
other
participants
13
in
student
education
loan
lending
with
any
student
education
14
loan
servicing
concerns.
15
h.
Establish
and
maintain
a
student
loan
borrower
education
16
course
within
existing
resources
that
includes
educational
17
presentations
and
materials
regarding
student
education
18
loans.
The
course
must
include,
but
is
not
limited
to,
19
key
loan
terms,
documentation
requirements,
monthly
payment
20
obligations,
income-based
repayment
options,
loan
forgiveness,
21
and
disclosure
requirements.
22
i.
Take
any
other
actions
necessary
to
fulfill
any
23
additional
duties
set
forth
by
the
commission
in
accordance
24
with
this
section.
25
j.
Submit
to
the
commission,
by
August
1
annually,
a
report
26
that
includes
but
is
not
limited
to
all
of
the
following:
27
(1)
A
description
of
the
actions
taken
by
the
office
of
28
student
loan
ombudsman
with
respect
to
the
implementation
of
29
this
section
during
the
previous
fiscal
year.
30
(2)
An
assessment
of
the
overall
effectiveness
of
the
office
31
of
the
student
loan
ombudsman.
32
(3)
Recommendations
for
legislative
or
administrative
33
action
for
changes
to
the
duties
and
responsibilities
34
established
under
this
section
and
for
measures
to
improve
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the
efficacy
and
responsiveness
of
the
office
of
student
loan
1
ombudsman.
2
4.
Definitions.
As
used
in
this
section,
unless
the
context
3
otherwise
requires:
4
a.
“Commission”
means
the
college
student
aid
commission.
5
b.
“Postsecondary
institution”
means
an
institution
of
6
higher
learning
under
the
control
of
the
state
board
of
7
regents,
a
community
college
established
under
chapter
260C,
or
8
an
accredited
private
institution
or
eligible
institution
as
9
defined
in
section
261.9.
10
c.
“Servicing”
means
receiving
scheduled
periodic
payments
11
from
a
student
loan
borrower
pursuant
to
the
terms
of
a
student
12
education
loan,
applying
the
payments
of
principal
and
interest
13
and
such
other
payments
with
respect
to
the
amounts
received
14
from
a
student
loan
borrower
as
may
be
required
pursuant
to
15
the
terms
of
a
student
education
loan,
and
performing
other
16
administrative
services
with
respect
to
a
student
education
17
loan.
18
d.
“Student
education
loan”
means
a
loan
that
is
extended
to
19
a
student
loan
borrower
expressly
for
postsecondary
education
20
expenses
or
other
school-related
expenses
and
does
not
include
21
open-end
credit
or
any
loan
that
is
secured
by
real
property.
22
e.
“Student
loan
borrower”
means
any
of
the
following:
23
(1)
A
resident
of
this
state
who
has
received
or
agreed
to
24
pay
a
student
education
loan.
25
(2)
A
person
who
shares
legal
responsibility
with
a
resident
26
under
subparagraph
(1)
for
repaying
the
student
education
loan.
27
f.
“Student
loan
servicer”
means
a
person,
wherever
located,
28
responsible
for
the
servicing
of
a
student
education
loan
to
a
29
student
loan
borrower.
30
EXPLANATION
31
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
32
the
explanation’s
substance
by
the
members
of
the
general
assembly.
33
This
bill
establishes
an
office
of
student
loan
ombudsman
34
within
the
college
student
aid
commission,
which
shall
support,
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maintain,
and
designate
a
student
loan
ombudsman
to
administer
1
the
office.
2
The
duties
of
the
student
loan
ombudsman
include
receiving
3
and
attempting
to
resolve
student
loan
borrowers’
complaints;
4
compiling
and
analyzing
data
on
such
complaints;
assisting
5
student
loan
borrowers
to
understand
their
rights
and
6
responsibilities;
providing
information
to
various
entities
7
regarding
the
problems
and
concerns
of
student
loan
borrowers;
8
analyzing
and
monitoring
the
development
and
implementation
9
of
federal,
state,
and
local
requirements
relating
to
student
10
loan
borrowers;
disseminating
information
about
the
services
11
offered
by
the
office;
establishing
and
maintaining
a
student
12
loan
borrower
education
course;
and
making
recommendations
as
13
appropriate
and
taking
other
actions
that
fulfill
the
duties
14
of
the
office.
15
If
the
ombudsman
has
reason
to
believe
that
a
person
or
16
entity
has
knowingly
engaged
in
an
act
or
practice
that
17
constitutes
a
violation
of
Code
chapter
261F
relating
to
18
educational
loans,
or
Code
section
714.16
relating
to
consumer
19
fraud,
the
ombudsman
shall
submit
information
and
findings
to
20
the
commission
and
to
the
attorney
general
for
further
review
21
and
appropriate
action.
22
The
ombudsman
must
also
submit
to
the
commission,
by
August
23
1
annually,
a
report
that
describes
the
actions
taken
during
24
the
previous
fiscal
year,
includes
an
assessment
of
office
25
effectiveness,
and
provides
recommendations
for
changes.
26
The
bill
establishes
definitions,
including
definitions
for
27
“postsecondary
institution”,
“servicing”,
“student
education
28
loan”,
and
“student
loan
borrower”.
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