Updates to the Truth in Lending Act (TILA) and Fair Credit Reporting Act

A new bill was signed into law on May 24, 2018, that impacts student lending and will have some impact on the way that schools manage institutional loans as well.

Bill S.2155 affects some aspects of TILA (the Truth in Lending Act), and the Fair Credit Reporting Act. You can read the text of the bill here (the section relevant to schools is at the very end under TITLE VI-protections for student borrowers).

Any student accounts that are serviced by TFC Tuition Financing are already covered – we have been prepared to address the changes required by this new law, and TILA & Fair Credit Reporting Act compliance will remain stress-free. If you are not already a TFC client, are managing any student accounts in-house, or are using any other companies to service student accounts, you should make sure that those accounts will be in compliance with the new rules.

So, what do the changes mean for you? Here are the three sections of the legislation you need to understand, and how we’re handling it so that you don’t have to.

Change: (Sec. 601) The bill amends TILA to prospectively revise provisions relating to co-signers of private student loans. Specifically, the bill: (1) prohibits a creditor from declaring a default or accelerating the debt of a private student loan on the sole basis of the death or bankruptcy of a co-signer to such a loan, and (2) directs loan holders to release co-signers from any obligation upon the death of the student borrower.
What we’re doing: What it boils down to is this: our clients are covered. We would never (and we mean never) accelerate debt based on those factors. Specifically for part (2), we will handle this for our clients as well, similar to the way we handle bankruptcy judgments. Once we receive notification, we will handle as appropriate and notify the school, partnering every step of the way.

Change: (Sec. 602) The bill amends the Fair Credit Reporting Act to allow a person to request the removal of a previously reported default regarding a private education loan from a consumer report if: (1) the lender chooses to offer a loan-rehabilitation program that requires a number of consecutive on-time monthly payments demonstrating renewed ability and willingness to repay the loan, and (2) the consumer meets those requirements. A consumer may obtain such rehabilitation benefits only once per loan. The GAO shall report on the implementation of these provisions.
What we’re doing: We report to the credit bureaus monthly for most of our clients and we will handle the assessment of those student requests and removal from consumer reports as well.

Change: (Sec. 603) The bill amends the Financial Literacy and Education Improvement Act to direct the Financial Literacy and Education Commission to establish best practices for teaching financial literacy skills at institutions of higher education.
What we’re doing: Technically this is not super relevant as it doesn’t change anything we offer to our clients or change anything you need to do with us. But we do always highly encourage schools to have students undergo financial literacy programs, so we are pleased to see this best practice included.

That’s it! Pretty simple when it comes down to it, and there is no action required by our clients in regards to changing compliance standards. We’re already in line with all of the amendments and nothing will change in the way we serve you going forward. If you do have any questions you can contact us here.


To make payments or to inquire about your account, please call 1 (800) 872-9832, or visit TFCStudentinfo.com

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