- (a) For any private education loan issued on or after the effective date of this amendatory Act of the 103rd General Assembly, a servicer, when notified of the total and permanent disability of a borrower or cosigner, shall release the cosigner from the obligations of a cosigner under the private education loan. The servicer may not attempt to collect a payment from a cosigner following a notification of total and permanent disability of the borrower or cosigner.
- (b) A servicer shall be notified of the total and permanent disability of a borrower and discharge the liability of the borrower and cosigner on the loan.
(c) After receiving a notification described in subsection (b) of this Section, the servicer may not:
- (1) attempt to collect on the outstanding liability of the borrower or cosigner; or
- (2) monitor the disability status of the borrower at any point after the date of discharge.
- (d) A servicer shall, within 30 days after the release of either a cosigner or borrower from the obligation of a private education loan pursuant to subsection (a) or (b) of this Section, notify both the borrower and cosigner of the release.
- (e) A servicer shall, within 30 days after receiving notice of the total and permanent disability of a borrower pursuant to subsection (a) of this Section, provide the borrower with an option to designate an individual to have the legal authority to act on behalf of the borrower.
- (f) If a cosigner is released from the obligations of a private education loan pursuant to subsection (a) of this Section, the servicer may not require the borrower to obtain another cosigner on the loan obligation.
- (g) A servicer may not declare a default or accelerate the debt against a borrower on the sole bases of the release of the cosigner from the loan obligation due to total and permanent disability pursuant to subsection (a) of this Section.
(Source: P.A. 103-748, eff. 8-2-24.)