Senate File 318 - Introduced SENATE FILE 318 BY QUIRMBACH , R. TAYLOR , DOTZLER , WAHLS , J. SMITH , CELSI , JOCHUM , MATHIS , PETERSEN , BOLKCOM , and BOULTON 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 TLSB 1254XS (4) 88 kh/jh
S.F. 318 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 35 -1- LSB 1254XS (4) 88 kh/jh 1/ 4
S.F. 318 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 35 -2- LSB 1254XS (4) 88 kh/jh 2/ 4
S.F. 318 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, 35 -3- LSB 1254XS (4) 88 kh/jh 3/ 4
S.F. 318 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”. 29 -4- LSB 1254XS (4) 88 kh/jh 4/ 4