§5535 — Title 12 Banks and Banking | U.S. Code

Summary

The Secretary, working with the Director, must name a Private Education Loan Ombudsman who will work inside the Bureau to help people with private student loans. The Secretary and Director must tell borrowers, schools, lenders, loan servicers, guaranty agencies, and others that the Ombudsman is available. The Ombudsman must take and try to solve borrower complaints informally, work with the Department of Education and other loan participants when needed, set up a written agreement with the federal student loan ombudsman within 90 days after the designated transfer date, collect and study complaint data, and send recommendations to the Director, the Secretary, the Secretary of Education, the Senate Committees on Banking, Housing, and Urban Affairs and on Health, Education, Labor, and Pensions, and the House Committees on Financial Services and on Education and Labor. The Ombudsman must also write an annual report about activities and how well the office worked, and send that report each year to the Secretary, the Secretary of Education, and the same four Congressional committees. The terms “private education loan” and “institution of higher education” have the legal meanings given in 15 U.S.C. 1650.

Title 12, §5535

Banks and Banking — Source: USLM XML via OLRC

(a)The Secretary, in consultation with the Director, shall designate a Private Education Loan Ombudsman (in this section referred to as the “Ombudsman”) within the Bureau, to provide timely assistance to borrowers of private education loans.

(b)The Secretary and the Director shall disseminate information about the availability and functions of the Ombudsman to borrowers and potential borrowers, as well as institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in private education student loan programs.

(c)The Ombudsman designated under this subsection shall—

(1)in accordance with regulations of the Director, receive, review, and attempt to resolve informally complaints from borrowers of loans described in subsection (a), including, as appropriate, attempts to resolve such complaints in collaboration with the Department of Education and with institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in private education loan programs;

(2)not later than 90 days after the designated transfer date, establish a memorandum of understanding with the student loan ombudsman established under section 1018(f) of title 20, to ensure coordination in providing assistance to and serving borrowers seeking to resolve complaints related to their private education or Federal student loans;

(3)compile and analyze data on borrower complaints regarding private education loans; and

(4)make appropriate recommendations to the Director, the Secretary, the Secretary of Education, the Committee on Banking, Housing, and Urban Affairs and the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Financial Services and the Committee on Education and Labor of the House of Representatives.

(d)(1)The Ombudsman shall prepare an annual report that describes the activities, and evaluates the effectiveness of the Ombudsman during the preceding year.

(2)The report required by paragraph (1) shall be submitted on the same date annually to the Secretary, the Secretary of Education, the Committee on Banking, Housing, and Urban Affairs and the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Financial Services and the Committee on Education and Labor of the House of Representatives.

(e)For purposes of this section, the terms “private education loan” and “institution of higher education” have the same meanings as in section 1650 of title 15.

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Education and Labor of House of Representatives changed to Committee on Education and the Workforce of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Effective Date

Section effective on the designated transfer date, see section 1037 of Pub. L. 111–203, set out as a note under section 5531 of this title.

§5535 Private Education Loan Ombudsman