(1) If a cosigner dies, the creditor shall not attempt to collect against the cosigner's estate other than for payment default.
(2) With regard to the death or bankruptcy of a cosigner, if a private education creditor is not more than sixty days delinquent at the time the creditor is notified of the cosigner's death or bankruptcy, the creditor shall not change any terms or benefits under the promissory note, repayment schedule, repayment terms, or monthly payment amount or any other provision associated with the credit obligation.
Source: L. 2021: Entire part added, (SB 21-057), ch. 378, p. 2523, � 5, effective June 29. L. 2023: Entire section amended, (SB 23-248), ch. 360, p. 2161, � 22, effective August 7.
5-20-208. Total and permanent disability of the private education credit borrower or cosigner. (1) For any private education credit obligation issued on or after June 29, 2021, a private education creditor, when notified of the total and permanent disability of a private education credit borrower or cosigner, shall release any cosigner from the obligations of the cosigner under a private education credit obligation. The creditor shall not attempt to collect a payment from a cosigner following a notification of total and permanent disability of the private education credit borrower or cosigner.
(2) A creditor shall, when notified of the total and permanent disability of a private education credit borrower, discharge the liability of the private education credit borrower and cosigner on the credit obligation.
(3) After receiving a notification described in subsection (2) of this section, the creditor shall not:
(a) Attempt to collect on the outstanding liability of the private education credit borrower or cosigner; or
(b) Monitor the disability status of the private education credit borrower at any point after the date of discharge.
(4) A creditor shall, within thirty days after the release of either a cosigner or private education credit borrower from the obligations of a private education credit obligation pursuant to subsection (1) or (2) of this section, notify both the private education credit borrower and cosigner of the release.
(5) A creditor shall, within thirty days after receiving notice of the total and permanent disability of a private education credit borrower pursuant to subsection (1) of this section, provide the private education credit borrower an option to designate an individual to have the legal authority to act on behalf of the private education credit borrower.
(6) If a cosigner is released from the obligations of a private education credit obligation pursuant to subsection (1) of this section, the creditor shall not require the private education credit borrower to obtain another cosigner on the credit obligation.
(7) A creditor shall not declare a default or accelerate the debt against the private education credit borrower on the sole basis of the release of the cosigner from the credit obligation due to total and permanent disability pursuant to subsection (1) of this section.
Source: L. 2021: Entire part added, (SB 21-057), ch. 378, p. 2523, � 5, effective June 29. L. 2023: Entire section amended, (SB 23-248), ch. 360, p. 2161, � 23, effective August 7.
5-20-209. Refinancing - additional disclosures - limitations on default pending approval. (1) Before offering a person a private education credit obligation that is being used to refinance an existing education credit obligation, a private education creditor shall provide the person a disclosure explaining that benefits and protections applicable to the existing credit obligation may be lost due to the refinancing. The disclosure must be provided on a one-page information sheet in at least twelve-point type and must be written in simple, clear, understandable, and easily readable language.
(2) If a private education creditor offers any private education credit borrower modified or flexible repayment options in connection with a private education credit obligation, the creditor shall offer those modified or flexible repayment options to all of the creditor's private education credit borrowers. In addition, the creditor shall:
(a) Provide on its website a description of any modified or flexible repayment options offered by the creditor for private education credit obligations;
(b) Establish policies and procedures and implement modified or flexible repayment options consistently in order to facilitate the evaluation of private education credit obligation modified or flexible repayment option requests, including providing accurate information regarding any such options that may be available to the private education credit borrower through the promissory note or that may have been marketed to the private education credit borrower through marketing materials; and
(c) Consistently present and offer private education credit obligation modified or flexible repayment options to private education credit borrowers with similar financial circumstances, if the creditor offers such repayment options.
(3) A private education creditor shall not place a credit obligation or account into default or accelerate a credit obligation while a private education credit borrower is seeking a credit obligation modification or enrollment in a modified or flexible repayment plan; except that a creditor may place a credit obligation or account into default or accelerate a credit obligation for payment default ninety days after the private education credit borrower's default.
Source: L. 2021: Entire part added, (SB 21-057), ch. 378, p. 2524, � 5, effective June 29. L. 2023: Entire section amended, (SB 23-248), ch. 360, p. 2162, � 24, effective August 7.