Bill > SB1537

This bill establishes comprehensive consumer protections for Educational Income Share Agreements (EISAs), a type of alternative student financing where payments are based on a student's future income. The bill creates a new Article in the Student Loan Servicing Rights Act that sets detailed requirements for these agreements, including limiting monthly payments to 8% of a consumer's income, capping the total payments at a maximum effective annual percentage rate of 9%, and restricting the duration of agreements to a maximum of 180 monthly payments or 240 months total. The legislation mandates extensive disclosure requirements, prohibits cosigners, prevents assignment of wages, limits fees, and ensures that consumers are not obligated to make payments when their income is below a specified threshold (initially set at $47,000 and adjusted for inflation). The bill also provides consumer-friendly provisions such as mandatory payment relief pauses, early completion options, and automatic discharge of obligations in cases of total and permanent disability or death. Additionally, the bill amends related acts to ensure consistency and gives the Attorney General enforcement powers under the Consumer Fraud and Deceptive Business Practices Act. The primary goal is to protect students by creating a transparent, fair framework for income-based educational financing that prevents predatory practices.

Budget and Finance, Government Affairs

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=1537&GAID=18&DocTypeID=SB&SessionID=114&GA=104