COUNCIL OF THE DISTRICT OF COLUMBIA
The John A. Wilson Building
1350 Pennsylvania Avenue, nw
Washington, D.C. 20004
Statement of Introduction
The New Student Loan Borrower Bill of Rights Amendment Act of 2023
January 13, 2023
Today, I am proud to introduce the New Student Loan Borrower Bill of Rights Amendment Act
of 2023 along with Councilmembers Robert C. White, Jr., Brooke Pinto, Kenyan McDuffie,
Brianne K. Nadeau, Matthew Frumin, Janeese Lewis George, and Charles Allen. Far too many
District residents are consumed by student loan debt, and the burden of this debt weighs heaviest
on minority communities. The federal government in recognition of this fact, has proposed
student debt relief to alleviate the burdens that so many people are shouldering.
More than 45 million student loan borrowers collectively owe $1.75 trillion of student loan debt,
making student debt the second largest class of consumer debt in the country. In the District,
there are 116,00 student loan borrowers who collectively owe $7.5 billion in student loan debt,
with the average balance exceeding $55,000. Nearly a quarter of our residents over age 24 have
student loan debt. These borrowers owe more than those in any state, carrying typical debt loads
$20,000 higher than the national average.
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The burden of student debt affects District residents’ ability to buy homes, start families, and
save for retirement. The District also faces broader challenges attracting and retaining public
service workers like teachers, public interest attorneys, and other government experts who often
take on high levels of student loan debt, with comparably lower levels of pay.
Within this broader context, racial wealth disparities contribute to higher rates of borrowing for
Black and Latino students. Nationally, Black graduates owe $25,000 more in debt than their
white counterparts. Delinquencies and defaults also disproportionately weigh on Black and
Latino borrowers. Black borrowers with a bachelor’s degree are five times more likely to default
on a student loan than white borrowers with the same degree.
The New Student Loan Borrower Bill of Rights Amendment Act would build upon legislation
introduced in Council Period 23 (B23-697) to address debt issues by:
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2021 statistics provided by the Student Borrower Protection Center
Christina Henderson Committee Member
Councilmember, At-Large Hospital and Health Equity
Chairperson, Committee on Health Judiciary and Public Safety
Transportation and the Environment
COUNCIL OF THE DISTRICT OF COLUMBIA
The John A. Wilson Building
1350 Pennsylvania Avenue, nw
Washington, D.C. 20004
● Adding affirmative protections for student loan borrowers. This bill grants additional
protections to student loan borrowers in the District, ensuring borrowers receive answers
to inquiries submitted to their servicers and notice when loans are transferred or sold to
another servicer, improving avenues for cosigner release, and discharging debt for total
and permanent disability.
● Prohibiting unfair, deceptive, or abusive acts and practices. The District already
prohibits debt collectors, auto lenders, and other consumer finance companies from
misleading, deceiving, or causing harm to consumers. This legislation expands the same
protections to student loan servicers operating in the District.
● Adding a private right of action. This legislation incorporates the private right of action
offered under existing DC consumer protection law, extending the same right to relief for
student loan borrowers.
I was happy that this bill received a hearing during Council Period 24 when I first introduced it
in 2021. The responses spoke to the importance of the protections that would be extended to
borrowers with the passage of this bill.
I look forward to working with my colleagues on the Council and providing student loan
borrowers across the District with these critical consumer protections.
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Councilmember Kenyan McDuffie Councilmember Christina Henderson 2
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Councilmember Robert C. White, Jr. Councilmember Janeese Lewis George 6
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Councilmember Charles Allen Councilmember Matthew Frumin 10
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Councilmember Brooke Pinto Councilmember Brianne K. Nadeau 14
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A BILL 17
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 20
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To amend the Department of Insurance and Securities Regulation Establishment Act of 1996 to 24
prevent abusive acts or practices on the part of student loan servicers, to clarify that 25
student loan servicers under contract with the United States Department of Education 26
shall automatically be issued a limited student loan servicing license upon meeting 27
certain criteria, to clarify denials of applications for approval, to proscribe prohibited 28
conduct on the part of student loan servicers, to assign affirmative duties to student loan 29
servicers, to assign the Attorney General of the District of Columbia the power to enforce 30
the Act, to establish responsibilities of private education lenders regarding disability 31
discharge and cosigner release, to transfer the Student Loan Ombudsperson from the 32
Department of Insurance, Securities and Banking to the Office of the Attorney General 33
for the District of Columbia, and require the creation of a revised Student Loan Borrower 34
Bill of Rights by October 1, 2024. 35
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BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 37
act may be cited as the “New Student Loan Borrower Bill of Rights Amendment Act of 2023”. 38
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Sec. 2. The Department of Insurance and Securities Regulation Establishment Act of 39
1996, effective May 21, 1997 (D.C. Law 11-268; D.C. Official Code § 31-101 et seq.), is 40
amended as follows: 41
(a) Section 2 (D.C. Official Code § 31-101) is amended as follows: 42
(1) A new paragraph (1A) is added to read as follows: 43
“(1A) “Abusive act or practice” means an act or practice that: 44
“(A) Materially interferes with the ability of a student loan borrower to 45
understand a term or condition of a student education loan; 46
“(B) Takes unreasonable advantage of: 47
“(i) A lack of understanding on the part of a student loan borrower 48
of the material risks, costs, or conditions of a student loan; 49
“(ii) The inability of a student loan borrower to protect the interests 50
of the borrower when selecting or using either of the following: 51
“(I) A student education loan; or 52
“(II) A feature, term, or condition of a student education 53
loan; or 54
“(iii) The reasonable reliance by the student loan borrower on a 55
person engaged in servicing a student education loan to act in the interests of the borrower; or 56
“(C) Misrepresents the amount, nature, or terms of any fee or payment due 57
or claimed to be due on a student education loan, the terms and conditions of the student 58
education loan agreement or the borrower's obligations under the student education loan.” 59
(2) A new paragraph (2A) is added to read as follows: 60
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“(2A) “Cosigner” means an individual who is liable for the obligation of a student 61
loan borrower without compensation, regardless of how the individual is designated in the 62
contract or instrument with respect to that obligation, including an obligation under a private 63
education loan extended to consolidate a student loan borrower’s pre-existing student loans and 64
shall include an individual whose signature is requested as a condition to grant credit or to 65
forbear on collection, but shall not include a spouse of a student loan borrower, the signature of 66
whom is needed to perfect the security interest in a loan.”. 67
(3) Paragraph (6B) is amended to read as follows: 68
“(6B) “Ombudsperson” means the position of Student Loan Ombudsperson 69
established within the Office of the Attorney General by section 108g of the Attorney General 70
for the District of Columbia Certification and Elected Term Amendment Act of 2010, as 71
introduced on January X, 2023 (B25-_____).”. 72
(4) New paragraphs (6C), (6D), (6E), (6F), and (6G) are added to read as follows: 73
“(6C) “Overpayment” means a payment on a student education loan in excess of 74
the monthly amount due from the student loan borrower on a student education loan. 75
“(6D) “Partial payment” or “underpayment” means a payment on a student 76
education loan account that contains multiple individual loans in an amount less than the amount 77
necessary to satisfy the outstanding payment due on all loans in the student education loan 78
account. 79
“(6E) “Private education loan” means an extension of credit that: 80
“(A) Is not made, insured, or guaranteed under Title IV of the Higher 81
Education Act of 1965 (20 U.S.C. § 1070 et seq.); 82
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“(B) Is extended to a consumer expressly, in whole or in part, for 83
postsecondary education expenses, regardless of whether the loan is provided by the educational 84
institution that the student attends; 85
“(C) Shall not include open-end credit or any loan that is secured by real 86
property or a dwelling; and 87
“(D) Shall not include an extension of credit in which the covered 88
educational institution is the creditor if: 89
“(i) The term is 90 days or less; or 90
“(ii) An interest rate shall not be applied to the credit balance and 91
the term of the extension of credit is one year or less, even if the credit is payable in more than 4 92
installments. 93
“(6F) “Postsecondary education expense” means an expense related to enrollment 94
in or attendance at a postsecondary education institution, as defined in section 201 of the 95
Education Licensure Commission Act of 1976, effective April 6, 1977 (D.C. Law 1-104; D.C. 96
Official Code § 38-1302(12)), regardless of whether the debt incurred by a student to pay those 97
expenses is owed to the provider of postsecondary education whose school, program, or facility 98
the student attends. 99
“(6G) “Private education lender” means a person engaged in the business of 100
securing, making, or extending private education loans, or a holder of a private education loan, 101
but shall not include the following persons to the extent preempted by federal law: 102
“(A) A bank of credit union; 103
“(B) A wholly owned subsidiary of a bank or credit union; and 104
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“(C) An operating subsidiary of a bank or credit union where each owner 105
of the operating subsidiary is wholly owned by the same bank or credit union.”. 106
(5) Paragraph (9) is amended to read as follows: 107
“(9) “Student loan borrower” means a resident of the District of Columbia who 108
has received or agreed to pay a student education loan used to fund his or her own postsecondary 109
education.”. 110
(6) A new paragraph (13) is added to read as follows: 111
“(13) “Total and permanent disability” is the condition of an individual who: 112
“(A) Has been determined by the United State Secretary of Veterans 113
Affairs to be unemployable due to a service-connected disability; or 114
“(B) Is unable to engage in any substantial gainful activity by reason of 115
any medically determinable physical or mental impairment that can be expected to result in 116
death, has lasted for a continuous period of not less than 12 months, or can be expected to last for 117
a continuous period of not less than 12 months.”. 118
(b) Section 7a (D.C. Official Code § 31-106.01) is repealed. 119
(c) Section 7b (D.C. Official Code § 31-106.02) is amended as follows: 120
(1) Subsection (c) is amended as follows: 121
(A) Paragraph (1)(B) is amended by striking the phrase “Application fees 122
and other fees” and inserting the phrase “Application fees, investigation fees, and other fees” in 123
its place. 124
(B) A new paragraph (3) is added to read as as follows: 125
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“(3) The Commissioner shall automatically issue a limited, irrevocable license to 126
any person servicing a student education loan under contract with the United States Department 127
of Education as follows: 128
“(A) Any person seeking to act within the District of Columbia as a 129
student loan servicer is exempt from the application procedures established pursuant to this 130
subsection, other than the requirements of paragraphs (1)(B) and (1)(D) of this subsection, to the 131
extent that the student loan servicing performed is conducted pursuant to a contract awarded by 132
the United States Secretary of Education under 20 U.S.C. § 1087f. The procedure to document 133
eligibility for the exemption shall be prescribed by the Commissioner. 134
“(B) Any person meeting the criteria set forth in subparagraph (A) of this 135
paragraph shall be issued a license by the Commissioner for the student loan servicing of student 136
education loans under contract with the United States Department of Education and shall be 137
considered by the Commissioner to have met all requirements established by subparagraphs 138
(1)(A) and (C) of this subsection. 139
“(C) The provisions of subsection (h) of this section shall not apply to a 140
person issued a limited license pursuant to this section to the extent that the person is servicing 141
federal student education loans. 142
“(D) Any person issued a license pursuant to this section shall provide the 143
Commissioner with written notice within 7 days following the notification of the expiration, 144
revocation, or termination of any contract awarded by the United States Secretary of Education 145
under 20 U.S.C § 1087f. Thereafter, the person shall have 30 days to satisfy all requirements 146
established under this act in order to continue to act within the District of Columbia as a student 147
loan servicer for federal student education loans. At the expiration of the 30-day period, if the 148
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person has not satisfied the requirements established pursuant to this act, the Commissioner shall 149
immediately suspend any license granted under this section. 150
“(E) In the case of student loan servicing that is not conducted pursuant to 151
a contract awarded by the United States Secretary of Education under 20 U.S.C. § 1087f, nothing 152
in this section shall prevent the Commissioner from issuing an order to temporarily or 153
permanently prohibit any person from acting as a student loan servicer. 154
“(F) In the case of student loan servicing conducted pursuant to a contract 155
awarded by the United States Secretary of Education under 20 U.S.C § 1087f, nothing in this 156
section shall prevent the commissioner from issuing a cease-and-desist order or injunction 157
against any student loan servicer to cease activities in violation of this act or D.C. Official Code 158
§ 28-3901 et seq.”. 159
(2) Subsection (g)(1)(C) is amended by striking “The Commissioner may deny an 160
application for renewal” and inserting “Except as provided for under subsection (c)(3) of this 161
section, the Commissioner may deny an application for renewal” in its place. 162
(d) New sections 7b-1, 7b-2, 7b-3, 7b-4, and 7b-5 are added to read as follows: 163
“Sec. 7b-1. Prohibited Conduct – Student Loan Servicers. 164
“(a) No student loan servicer shall: 165
“(1) Directly or indirectly employ any scheme, device, or artifice to defraud or 166
mislead student loan borrowers; 167
“(2) Engage in any unfair or deceptive practice toward any person or misrepresent 168
or omit any material information in connection with the servicing of a student education loan, 169
including abusive acts and practices; 170
“(3) Obtain property by fraud or misrepresentation; 171
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“(4) Misapply student education loan payments to the outstanding balance of a 172
student education loan; 173
“(5) Provide inaccurate information to a credit bureau, thereby harming a student 174
loan borrower's creditworthiness; 175
“(6) Fail to report both the favorable and unfavorable payment history of the 176
student loan borrower to a nationally recognized consumer credit bureau at least annually if the 177
student loan servicer regularly reports information to a credit bureau; 178
“(7) Refuse to communicate with an authorized representative of the student loan 179
borrower who provides a written authorization signed by the student loan borrower, provided the 180
student loan servicer may adopt procedures reasonably related to verifying that the representative 181
is in fact authorized to act on behalf of the student loan borrower; 182
“(8) Make any false statement or make any omission of a material fact in 183
connection with any information or reports filed with a governmental agency or in connection 184
with any investigation conducted by the Commissioner or another governmental agency; 185
“(9) Fail to respond within 15 business days to communications from the 186
Department of Insurance, Securities and Banking, or within such shorter, reasonable period of 187
time as may be requested by the Department; or 188
“(10) Fail to respond within 15 business days to a consumer complaint submitted 189
to the student loan servicer by the Department or Office of the Attorney General. If necessary, 190
the student loan servicer may request additional time to respond to the complaint, up to a 191
maximum of 45 business days, provided that the request is accompanied by an explanation on 192
why additional time is reasonable and necessary. 193
“Sec. 7b-2. Affirmative Duties – Student Loan Servicers. 194
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“(a) Except as otherwise provided pursuant to federal law, a student loan servicer shall: 195
“(1) Respond to any written inquiry from a student loan borrower or the 196
representative of a student loan borrower by: 197
“(A) Acknowledging receipt of the inquiry within 10 business days; and 198
“(B) Providing information relating to the inquiry, and, if applicable, the 199
action the student loan servicer will take to correct the account, or an explanation of the student 200
loan servicer's position that the borrower's account is correct, within 30 business days, including 201
copies of all information and account information used by the student loan servicer in reaching 202
the determination. 203
“(2) Inquire of a student loan borrower on how to apply an overpayment to a 204
student education loan. A borrower's instruction on how to apply an overpayment to a student 205
education loan shall stay in effect for any future overpayments during the term of the student 206
education loan until the borrower provides different instructions. 207
“(3) In the absence of direction provided by a borrower pursuant to paragraph (2) 208
of this subsection, allocate an overpayment on a student loan account in a manner that reduces 209
the total cost of the student loan, including principal and balance, interest, and fees. A student 210
loan servicer shall be considered to meet the requirements of this paragraph if the servicer 211
allocates the overpayment to the loan with the highest interest rate on the borrower’s student loan 212
account, unless the borrower specifies otherwise. 213
“(4) In the absence of a direction provided by a borrower pursuant to paragraph 214
(2) of this subsection, apply partial payments in a manner that minimizes late fees and negative 215
credit reporting. If there are multiple loans on a student loan borrower’s account with an equal 216
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stage of delinquency, a student loan servicer shall apply the partial payment in a way that 217
satisfies as many individual loan payments as possible on a borrower's account. 218
“(b) The following requirements shall be applicable to a student loan servicer in the event 219
of the sale, assignment, or other transfer of the servicing of a student education loan that results 220
in a change in the identity of the student loan servicer to whom a student loan borrower is 221
required to send payments or direct any communication concerning the student education loan: 222
“(1) As a condition of a sale, an assignment, or any other transfer of the servicing 223
of a student education loan, a student loan servicer shall require the new student loan servicer to 224
honor all benefits originally represented as available to a student loan borrower during the 225
repayment of the student education loan and preserve the availability of those benefits, including 226
any benefits for which the student loan borrower has not yet qualified. If a student loan servicer 227
is not also the loan holder or is not acting on behalf of the loan holder, the student loan 228
servicer satisfies the requirement established by this paragraph by providing the new student 229
loan servicer with information necessary for the new student loan servicer to honor all 230
benefits originally represented as available to a student loan borrower during the repayment 231
of the student education loan and preserve the availability of the benefits, including any 232
benefits for which the student loan borrower has not yet qualified; 233
“(2) A student loan servicer shall transfer to the new student loan servicer for the 234
student education loan all information regarding the student loan borrower, the account of the 235
borrower, and the student education loan of the borrower. The information shall include the 236
repayment status of the student loan borrower and any benefits associated with the student 237
education loan of the borrower; and 238
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“(3) The student loan servicer shall complete the transfer of information required 239
pursuant to section 7b-2(b)(2) within 45 calendar days after the sale, assignment, or other 240
transfer of the servicing of the student education loan. 241
“(4) The transferring student loan servicer shall notify affected student loan 242
borrowers of the sale, assignment, or other transfer of the servicing of the student loan at least 7 243
days before the next payment on the loan is due. The notice must include: 244
“(A) The identity of the new student loan servicer; 245
“(B) The effective date of the transfer of the student loan borrower’s 246
student loan to the new student loan servicer; 247
“(C) The date on which the existing student loan servicer will no longer 248
accept payments; and 249
“(D) The contact information for the new student loan servicer. 250
“(c) A student loan servicer who obtains the right to service a student education loan shall 251
adopt policies and procedures to verify that the student loan servicer has received all information 252
regarding the student loan borrower, the account of the student loan borrower, and the student 253
education loan of the student loan borrower including, but not limited to, the repayment status of 254
the student loan borrower and any benefits associated with the student education loan of the 255
student loan borrower. 256
“(d) A student loan servicer shall evaluate a student loan borrower for eligibility for an 257
income-driven repayment program prior to placing the borrower in forbearance or default, if an 258
income-driven repayment program is available to the borrower. 259
“Sec. 7b-3. Prohibited Acts – Private Education Lenders. 260
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“(a)(1) A private education loan executed after the effective date of this act shall not 261
include a provision that permits the private education lender to accelerate, in whole or in part, 262
payments on the private education loan, except in cases of payment default, or place any loan or 263
account into default or accelerate a loan for any reason, other than for payment default. 264
“(2) A private education loan executed prior to the effective date of this act shall 265
permit the private education lender to accelerate payments only if the promissory note or loan 266
agreement explicitly authorizes an acceleration and only for the reasons stated in the note or 267
agreement. 268
“(3) In the event of the death of a cosigner, the lender shall not attempt to collect 269
against the cosigner’s estate, other than for payment default. 270
“(4) Upon receiving notification of the death or bankruptcy of a cosigner, when 271
the loan is not more than 60 days delinquent at the time of the notification, the private education 272
lender shall not change any terms or benefits under the promissory note, repayment schedule, 273
repayment terms, or monthly payment amount or any other provision associated with the loan. 274
“(5) A private education lender shall not place any loan or account into default or 275
accelerate a loan while a borrower is seeking a loan modification or enrollment in a flexible 276
repayment plan, except that a private education lender may place a loan or account into default 277
or accelerate a loan for payment default 90 days after the borrower’s default. 278
“(b) A private education lender shall not: 279
“(1) Directly or indirectly employ any scheme, device, or artifice to defraud or 280
mislead a student loan borrower; 281
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“(2) Engage in any unfair or deceptive practice toward any person or misrepresent 282
or omit any material information in connection with the servicing of a private education loan, 283
including, abusive acts and practices; 284
“(3) Obtain property by fraud or misrepresentation; 285
“(4) Misapply private education loan payments to the outstanding balance of a 286
private education loan; 287
“(5) Provide inaccurate information to a credit bureau, thereby harming a student 288
loan borrower’s creditworthiness; 289
“(6) Fail to report both the favorable and unfavorable payment history of the 290
student loan borrower to a nationally recognized consumer credit bureau at least annually if the 291
private education lender regularly reports information to a credit bureau; 292
“(7) Refuse to communicate with an authorized representative of the student loan 293
borrower who provides a written authorization signed by the student loan borrower, provided the 294
private education lender may adopt procedures reasonably related to verifying that the 295
representative is in fact authorized to act on behalf of the student loan borrower; 296
“(8) Make any false statement or make any omission of a material fact in 297
connection with any information or reports filed with a governmental agency or in connection 298
with any investigation conducted by the Commissioner or another governmental agency; 299
“(9) Fail to respond within 15 business days to communications from the Office 300
of the Attorney General, or within such shorter, reasonable period of time as may be requested 301
by the Attorney General; or 302
“(10) Fail to respond within 15 business days to a consumer complaint transmitted 303
to the private education lender by the Office of the Attorney General. If necessary, the private 304
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education lender may be granted additional time to respond to the complaint, up to a maximum 305
of 45 business days, if the request is determined to be reasonable and necessary by the Office of 306
the Attorney General. 307
“Sec. 7b-4. Affirmative Duties – Private Education Lenders. 308
“(a) For private education loans issued on or after the effective date of this act: 309
“(1) A private education lender or student loan servicer acting on behalf of a 310
private education lender, when notified of the total and permanent disability of a borrower or 311
cosigner, shall release any cosigner from the obligations under a private education loan. The 312
private education lender shall not attempt to collect a payment from a cosigner after being 313
notified of the total and permanent disability of the cosigner or borrower. 314
“(2) A private education lender shall notify a borrower and cosigner for a private 315
education loan if either a cosigner or borrower is released from the obligations of the private 316
education loan under this subsection, within 30 days of the release. 317
“(3) Any private education lender that extends a private education loan shall 318
provide the borrower an option to designate an individual to have the legal authority to act on 319
behalf of the borrower with respect to the private education loan in the event of the total and 320
permanent disability of the borrower. 321
“(4) In the event a cosigner is released from the obligations of a private education 322
loan pursuant to paragraph (1) of this subsection, the lender shall not require the borrower to 323
obtain another cosigner on the loan obligation. 324
“(5) A lender shall not declare a default or accelerate the debt against the 325
borrower on the sole basis of the release of the cosigner from the loan obligation. 326
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“(6) A lender shall, when notified of the total and permanent disability of a 327
borrower, discharge the liability of the borrower and cosigner on the loan. 328
“(7) After receiving a notification described in paragraph (1) of this subsection, 329
the lender shall not attempt to collect on the outstanding liability of the borrower or cosigner or 330
monitor the disability status of the borrower at any point after the date of discharge. 331
“(b) Availability of alternative repayment plans. 332
“(1) If a private education lender offers a student loan borrower flexible or 333
modified repayment options in connection with a private education loan, those flexible 334
repayment options shall be made available to all borrowers and the private education lender 335
shall: 336
“(A) Provide on its website a description of any alternative repayment 337
options offered by the lender for private education loans; and 338
“(B) Establish policies and procedures to facilitate evaluation of private 339
education loan flexible repayment option requests, including providing accurate information 340
regarding any private education loan alternative repayment options that may be available to the 341
borrower through the promissory note or that may have been marketed to the borrower through 342
marketing materials. 343
“(2) A private education lender or a student loan servicer acting on behalf of a 344
private education lender shall consistently present and offer flexible or modified private 345
education loan repayment options to borrowers with similar financial circumstances, if the lender 346
offers such repayment options. 347
“(c)(1) Prior to the extension of a private education loan that requires a cosigner, a private 348
education lender shall deliver the following information to the cosigner: 349
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“(A) How the private education loan obligation shall appear on the 350
cosigner’s credit; 351
“(B) How the cosigner shall be notified if the private education loan 352
becomes delinquent, including how the cosigner can cure the delinquency in order to avoid 353
negative credit furnishing and loss of cosigner release eligibility; and 354
“(C) Eligibility for release of the cosigner’s obligation on the private 355
education loan, including the number of on-time payments and any other criteria required to 356
approve the release of cosigner from the loan obligation. 357
“(2) Prior to offering a person a private education loan that is being used to 358
refinance an existing education loan, a private education lender shall provide the person a 359
disclosure that benefits and protections applicable to the existing loan may be lost due to the 360
refinancing. 361
“(3) The information provided pursuant to this section shall be provided on a one-362
page information sheet in a 12-point font and shall be written in simple, clear, understandable 363
and easily readable language as provided in the Plain Writing Act of 2010 (5 U.S.C. § 301 note; 364
P.L. 111-274). 365
“(d) Cosigner Release. 366
“(1) For any private education loan that obligates a cosigner, a private education 367
lender shall provide the borrower and the cosigner an annual written notice containing 368
information about cosigner release, including the administrative, objective criteria the private 369
education lender requires to approve the release of the cosigner from the loan obligation and the 370
process for applying for cosigner release. 371
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“(2) If the borrower has met the applicable requirements to be eligible for 372
cosigner release, the private education lender shall send the borrower and the cosigner a written 373
notification by mail and by electronic mail, where a borrower or cosigner has elected to receive 374
electronic communications from the private education lender, informing the borrower and 375
cosigner that the requirements to be eligible for cosigner release have been met. The notification 376
shall also include information about any additional criteria to qualify for cosigner release, and 377
the procedure to apply for cosigner release. 378
“(3) A private education lender shall provide written notice to a borrower who 379
applies for cosigner release, but whose application is incomplete. The written notice shall include 380
a description of the information needed to consider the application complete and the date by 381
which the applicant shall furnish the missing information. 382
“(4) Within 30 days after a borrower submits a completed application for cosigner 383
release, the private education lender shall send the borrower and cosigner a written notice that 384
informs the borrower and cosigner whether the cosigner release application has been approved or 385
denied. If the private education lender denies a request for cosigner release, the borrower may 386
request any documents or information used in the determination, including, but not limited to, 387
the credit score threshold used by the private education lender, the borrower’s consumer report, 388
the borrower’s credit score, and any other documents specific to the borrower. The private 389
education lender shall also provide any adverse action notices required under applicable federal 390
law if the denial is based in whole or in part on any information contained in a consumer report. 391
“(5) In response to a written or oral request for cosigner release, a private 392
education lender shall provide the information described in paragraph (1) of this subsection. 393
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“(6) A private education lender shall not impose any restriction that permanently 394
bars a borrower from qualifying for cosigner release, including restricting the number of times a 395
borrower may apply for cosigner release. 396
“(7) A private education lender shall not impose any negative consequences on 397
any borrower or cosigner during the 60 days following the issuance of the notice required 398
pursuant to paragraph (3) of this subsection, or until the private education lender makes a final 399
determination about a borrower’s cosigner release application. For the purpose of this subsection, 400
“negative consequences” includes the imposition of additional eligibility criteria, negative credit 401
reporting, lost eligibility for cosigner release, late fees, interest capitalization, or other financial 402
penalty. 403
“(8) A private education lender shall not require greater than 12 consecutive, on-404
time payments as a requirement for cosigner release. Any borrower who has paid the equivalent 405
of 12 months of principal and interest payments within any 12-month period shall be considered 406
to have satisfied a consecutive, on-time payment requirement, even if the borrower has not made 407
payments monthly during the 12-month period. 408
“(9) If a borrower or cosigner requests a change in terms that restarts the counting 409
of consecutive, on-time payments required for cosigner release, the private education lender shall 410
notify the borrower and cosigner in writing of the impact of the change and provide the borrower 411
or cosigner the right to withdraw or reverse the request to avoid that impact. 412
“(10) A borrower shall have the right to request a reconsideration of a private 413
education lender’s denial of a request for cosigner release, and the private education lender shall 414
permit the borrower to submit additional documentation evidencing the borrower’s ability to 415
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meet the payment obligations. The borrower may request review of the cosigner release 416
determination by a different employee than the employee making the original determination. 417
“(11) A private education lender shall establish and maintain a comprehensive 418
record management system reasonably designed to ensure the accuracy, integrity, and 419
completeness of data and other information about cosigner release applications and compliance 420
with applicable District and federal laws, including but not limited to the Equal Credit 421
Opportunity Act (15 U.S.C. § 1691 et seq.) and the Fair Credit Reporting Act (15 U.S.C. § 1681 422
et seq.). This system shall include the number of cosigner release applications received, the 423
approval and denial rate, and the primary reasons for any denial. 424
“(e) Information Available to Cosigner. 425
“(A) A private education lender shall provide a cosigner with access to all 426
documents or records related to the cosigned private education loan that are available to the 427
borrower. 428
“(B) If a private education lender provides electronic access to documents and 429
records for a borrower, it shall provide equivalent electronic access to the cosigner. 430
“(C) Upon written notice from the borrower or cosigner, the private education 431
lender may redact or withhold contact information for the borrower and cosigner. 432
“Sec. 7b-5. Enforcement. 433
“(a) In addition to complying with the requirements of this act, a student loan servicer 434
shall comply with all applicable federal laws relating to student loan servicing, as from time to 435
time amended, and the regulations promulgated thereunder. 436
“(b)(1) A violation of section 7b-1 or 7b-3 is an unfair or deceptive trade practice 437
pursuant to D.C. Official Code § 28-3901 et seq. 438
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“(c) Any person who suffers damage as a result of the failure of a student loan servicer or 439
private education lender to comply with sections 7b, 7b-1, 7b-2, 7b-3, 7b-4, or 7b-5(a) may bring 440
an action on their own behalf and on behalf of a similarly situated class of consumers against that 441
student loan servicer or private education lender to recover or obtain any of the following: 442
“(1) Actual damages, but in no case, shall the total award of damages be less than 443
five hundred dollars ($500) per plaintiff, per violation; 444
“(2) An order enjoining the methods, acts, or practices; 445
“(3) Restitution of property; 446
“(4) Punitive damages; 447
“(5) Attorney’s fees; or 448
“(6) Any other relief that the court deems proper. 449
“(d) In addition to any other remedies provided by this section or otherwise provided by 450
law, whenever it is proven by a preponderance of the evidence that a student loan servicer or 451
private education lender has engaged in conduct that substantially interferes with a borrower’s 452
right to an alternative payment arrangement; loan forgiveness, cancellation, or discharge; or any 453
other financial benefit as established under the terms of a borrower’s promissory note or under 454
the Higher Education Act of 1965 (20 U.S.C. § 1070a et seq.), as from time to time amended, 455
and the regulations promulgated thereunder, the court shall award treble actual damages to the 456
plaintiff, but in no case shall the award of damages be less than $1,500 per violation. 457
“(e) The remedies provided in this section are not the exclusive remedies available to a 458
student loan borrower or cosigner, nor must the student loan borrower exhaust any administrative 459
remedies provided in this section or any other applicable law before proceeding pursuant to this 460
section. 461
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“(f) The Attorney General may bring an action to restrain any violation of sections 7b, 462
7b-1, 7b-2, 7b-3, 7b-4 or 7b-5(a) or any continuance of any such violation. 463
“(g) The Department shall share information on a quarterly basis related to the 464
implementation, execution, and enforcement of sections 7b, 7b-1, 7b-2, 7b-3, 7b-4 and 7b-5(a) 465
with the Office of the Attorney General, and the Student Loan Ombudsperson established 466
pursuant to section 108g of the Attorney General for the District of Columbia Certification and 467
Elected Term Amendment Act of 2010, as introduced on January, X 2023 (B25-_____).”. 468
(e) Section 7c is amended by striking the phrase “sections 7a and 7b.” and inserting 469
“sections 7b, 7b-1, 7b-2, 7b-3, 7b-4 and 7b-5(a).” in its place. 470
Sec. 3. The Attorney General for the District of Columbia Certification and Elected Term 471
Amendment Act of 2010, effective May 27, 2010 (D.C. Law 18-160; D.C. Official Code § 1-472
301.81 et seq.) is amended by inserting a new section 108g as follows: 473
“Student Loan Ombudsperson. 474
“(a) There is established within the Office of the Attorney General for the District of 475
Columbia the position of the Student Loan Ombudsperson (“Ombudsperson”). 476
“(b)(l) The Ombudsperson shall be: 477
“(A) Appointed by the Attorney General; 478
“(B) A District resident within 180 days of appointment; and 479
“(C) Experienced in consumer finance, including student loan servicing 480
and debt collection. 481
“(2) If a vacancy in the position of Ombudsperson occurs as a consequence of 482
removal, resignation, disability, death, or other reason, the Attorney General shall appoint an 483
Ombudsperson to fill the vacancy within 90 days of the occurrence of the vacancy. 484
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“(c) The Ombudsperson, in consultation with the Attorney General and Commissioner of 485
the Deparment of Insurance, Securities, and Banking, shall: 486
“(1) Assist in the enforcement of the provisions of section 7b, 7b-1, 7b-2, 7b-3, 487
7b-4 and 7b-5(a) of the Department of Insurance and Securites Regulation Establishment Act of 488
1996, effective May 21, 1997 (D.C. Law 11-268; D.C. Official Code § 31-101 et seq.), including 489
the referral of actions to the Attorney General for the enforcement of an order of the 490
Commissioner of the Deparment of Insurance, Securities, and Banking pursuant to section 7b, 491
7b-1, 7b-2, 7b-3, 7b-4 and 7b-5(a) of the Department of Insurance and Securites Regulation 492
Establishment Act of 1996, effective May 21, 1997 (D.C. Law 11-268; D.C. Official Code § 31-493
101 et seq.) or other authority of the Commissioner of the Deparment of Insurance, Securities, 494
and Banking related to a licensee or a person required to have a license under the act; 495
“(2) Receive, review, and attempt to resolve any complaints from a student loan 496
borrower as defined by section 2(9) of the Department of Insurance and Securities Regulation 497
Establishment Act of 1996, including attempts to resolve such complaints in collaboration with 498
student loan servicers, and any other participants in student-loan lending , including those 499
entities engaging student loan borrowers about existing student debt; 500
“(3) Compile and analyze data on student loan borrower and cosigner complaints; 501
“(4) Develop and provide information to assist student loan borrowers in 502
understanding their rights and responsibilities under the terms of the student loan borrower's 503
student education loan; 504
“(5) Monitor the actions that student loan servicers take to ensure that student 505
loan borrowers are informed of their rights and responsibilities under the terms of the student 506
loan borrower's student education loan in a transparent, accessible, and timely manner; 507
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“(6) Make recommendations to the Attorney General and Commissioner of the 508
Department of Insurance, Securities, and Banking for resolving problems and concerns of 509
student loan borrowers; 510
“(7) Analyze and monitor the development and implementation of federal and 511
local laws, regulations, and policies relating to student loan borrowers; 512
“(8) Upon the request and written consent of a student loan borrower, review the 513
student education loan history of the student loan borrower; provided, that the student loan 514
borrower has provided documentation of the student loan borrower's student education loan 515
history; 516
“(9) By October 1, 2023, establish, publicize, and maintain an education course to 517
assist student loan borrowers in understanding their student education loans, which shall include: 518
“(A) Educational presentations; 519
“(B) Explanations of key loan terms; 520
“(C) Documentation requirements; 521
“(D) Monthly payment obligations, including: 522
“(i) Income-based repayment options; 523
“(ii) Loan forgiveness; and 524
“(iii) Disclosure requirements; and 525
“(E) Other educational materials that the Attorney General or 526
Commissioner of the Deparment of Insurance, Securities, and Banking considers necessary or 527
appropriate; 528
“(10) By October 1, 2023, develop a consumer-facing student loan borrower bill 529
of rights, to be made available on the website of the Office of the Attorney General; 530
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“(11) Take any other action required by the Attorney General or Commissioner. 531
“(d) Beginning March 1, 2025, and by March 1 of each year thereafter, the Attorney 532
General shall submit an annual report to the Mayor and the Council on the Ombudsperson's 533
activities, as required or authorized by this section, of the previous year, which shall include the 534
number of educational presentations held across the city, the number of residents in attendance 535
for the educational presentations, and the number of complaints received and the action taken to 536
resolve the complaints. 537
“(e) The Ombudsperson shall not: 538
“(1) Disclose personally identifiable information regarding a student loan 539
borrower without the written consent of the student loan borrower; 540
“(2) Disclose the identity of a person who brings a complaint or provides 541
information to the Ombudsperson without the person's consent, unless the Attorney General 542
determines that disclosure is necessary to further the resolution of a complaint or an 543
investigation; 544
“(3) Provide legal advice or legal representation; or 545
“(4) Be held personally liable for the good-faith performance of his or her 546
responsibilities or duties under this section or rules issued pursuant to this section; except, that no 547
immunity shall extend to criminal acts, or other acts that violate District or federal law.” 548
“(f) The Attorney General for the District of Columbia, pursuant to section 2-501 et seq. 549
may issue rules to implement section 108g of the Attorney General for the District of Columbia 550
Certification and Elected Term Amendment Act of 2010, as introduced on March 29, 2021 (B24-551
_____).”. 552
Sec. 4. Fiscal impact statement. 553
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The Council adopts the fiscal impact statement in the committee report as the fiscal 554
Impact statement required by section 602(c)(3) of the District of Columbia Home Rule 555
Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)). 556
Sec. 5. Effective date. 557
This act shall take effect following approval by the Mayor (or in the event of veto by the 558
Mayor, action by the Council to override the veto), a 30-day period of congressional review as 559
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 560
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 561
Columbia Register. 562
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