12 U.S.C. § 5535: Private Education Loan…

Summary

The Secretary must set up a Private Education Loan Ombudsman inside the Bureau, working with the Director, to help people with private student loans. The Secretary and the Director must tell borrowers, colleges, lenders, loan servicers, guaranty agencies, and others that the Ombudsman exists and explain what it does. The Ombudsman must take and try to fix borrower complaints under the Director’s rules. It must work with the Department of Education and other loan groups to resolve problems. Within 90 days after the designated transfer date, the Ombudsman must make a written agreement with the student loan ombudsman at the Department of Education (under 20 U.S.C. 1018(f)). The Ombudsman must collect and study complaint data and give recommendations to the Director, the Secretaries (Treasury and Education), and the named Senate and House committees. Each year the Ombudsman must write a report about its work and effectiveness and send it on the same date to the Secretaries and those congressional committees. The terms “private education loan” and “institution of higher education” mean what they do in 15 U.S.C. 1650.

Title 12, §5535

Banks and Banking, Source: USLM XML via OLRC

(a)Establishment

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)Public information

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)Functions of Ombudsman

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)Annual reports

(1)In general

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

(2)Submission

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)Definitions

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