H.F. 2241 Section 1. NEW SECTION . 262C.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Borrower” means the same as defined in section 261F.1. 4 2. “Educational loan” means an educational loan, as defined 5 in section 261F.1, for which a loan agreement is entered into 6 on or after July 1, 2026. 7 3. “Institution” means an institution of higher education 8 governed by the state board of regents. 9 Sec. 2. NEW SECTION . 262C.2 Default on educational loan —— 10 liability of institution. 11 If a borrower defaults on an educational loan obtained to 12 pay for or finance the higher education expenses of a student 13 incurred during the student’s enrollment at an institution, the 14 institution shall be liable for ten percent of the amount owed 15 by the borrower as a result of the default. The institution’s 16 liability shall offset ten percent of the borrower’s liability 17 for the default. The institution’s liability shall be governed 18 by the same terms as the borrower unless otherwise negotiated 19 by the institution. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill relates to borrowers of educational loans, as 24 those terms as defined under current law. 25 The bill provides that if a borrower defaults on an 26 educational loan obtained to pay for or finance the higher 27 education expenses of a student incurred during the student’s 28 enrollment at an institution of higher education governed by 29 the state board of regents, the institution shall be liable for 30 10 percent of the amount owed by the borrower as a result of the 31 default. The institution’s liability shall offset 10 percent 32 of the borrower’s liability for the default. The institution’s 33 liability shall be governed by the same terms as the borrower 34 unless otherwise negotiated by the institution. 35 -1- LSB 5406HV (2) 91 je/ns 1/ 1