Higher Education Committee
Filed: 5/6/2009
 
 

 




 

 		












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AMENDMENT TO SENATE BILL 1698 




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    AMENDMENT NO. ______. Amend Senate Bill 1698 by replacing 
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everything after the enacting clause with the following:




 
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    "Section 1. Short title. This Act may be cited as the Task 
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Force on Higher Education Private Student Loans.
 
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    Section 5. Legislative findings. The General Assembly 
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makes all of the following findings:
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        (1)  Today, private loans constitute 20% of total 
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    education loan money, whereas 10 years ago private loans 
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    constituted 5% of student loans.
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        (2)  Tuition at public universities has risen 57% in the 
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    past 5 years.
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        (3)  Between 2000-2001 and 2005-2006, private student 
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    loan volume grew at an average rate of 27% to a total of 
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    $17.3 billion.
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        (4)  Borrowers who do not complete their degrees are 10 
 


 






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    times as likely to default on their loan and twice as 
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    likely to be unemployed.
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        (5)  Predatory and subprime lending practices have 
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    caused a crisis in the housing and real estate industry, 
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    and it is the interest of all parties involved to avoid a 
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    similar crisis involving private student loans.

 
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    Section 10. Creation of Task Force. There is created the 
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Task Force on Higher Education Private Student Loans consisting 
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of all of the following members: 
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        (1)  One member each appointed by the President of the 
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    Senate, the Minority Leader of the Senate, the Speaker of 
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    the House of Representatives, and the Minority Leader of 
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    the House of Representatives.
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        (2)  One member appointed by the executive director of 
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    the Illinois Student Assistance Commission to serve as 
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    chairperson of the Task Force.
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        (3) One member appointed by the Attorney General.
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        (4)  Members appointed by the Governor as follows:

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            (A)  One member representing a banking 
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        organization.
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            (B)  One member representing private schools and 
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        universities.
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            (C)  One member representing a student loan 
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        corporation.

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        (5)  The executive director of the Board of Higher 
 


 






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    Education or his or her designee.
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        (6)  The State Treasurer or his or her designee to serve 
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    as the co-chairperson of the Task Force.
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        (7)  The Director of the Division of Financial 
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    Institutions of the Department of Financial and 
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    Professional Regulation or his or her designee.
 
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    Section 15. Duties.   The duties of the Task Force on Higher 
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Education Private Student Loans shall include without 
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limitation all of the following:
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        (1)  To investigate the rates, fees, and terms 
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    associated with private student loans made to students in 
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    this State.
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        (2)  To investigate how rates, fees, and terms impact 
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    the accessibility of private student loans, affordability 
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    of student loans, and choice of institution students have.
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        (3)  To investigate the impact rates, fees, and terms 
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    have on students after graduation, specifically the 
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    following:

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            (A)  The amount of debt they carry.
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            (B)  The impact on pursuing post-graduate degrees.
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            (C)  The ability to repay their loans.
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        (4)  To investigate the relationship between rising 
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    tuition and the availability of private loans.
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        (5)  To assess the impact of capping private student 
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    loan fees charged by lenders.
 


 






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        (6)  To investigate how many private student loans are 
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    in default or are not able to be repaid.
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        (7)  To investigate what rates, fees, and terms are 
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    common to those private student loans in default.
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        (8)  To assess what impact loan defaults have on lending 
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    institutions.
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        (9)  To assess the impact a  loan default has on the 
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    borrower.
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        (10)  To study what additional disclosures can be made 
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    to students regarding high risk loans, financial 
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    information, financial choices, and financial aid 
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    available.
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        (11)  To investigate what higher education institutions 
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    can do to advise students on their financial aid and loan 
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    resources.
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        (12)  To investigate if race and ethnicity are a factor 
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    in the rates, fees, and terms associated with private 
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    student loans.
 
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    Section 20. Task Force assistance.  The Office of the 
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Illinois Student Assistance Commission shall be responsible 
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for administrative and logistical support of the Task Force on 
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Higher Education Private Student Loans, including coordination 
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of Task Force member appointments, distribution of meeting 
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notices and minutes, coordination of meeting logistics, 
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facilitation of public meetings, and the drafting and filing of 
 


 






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the report under Section 25 of this Act.  Task Force members or 
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staff liaisons or both may confer and collaborate with relevant 
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State and national organizations with expertise.
 
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    Section 25. Report; dissolution of Task Force.   The Task 
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Force on Higher Education Private Student Loans shall report 
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its findings and recommendations to the General Assembly by 
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filing copies of its report by December 31, 2010 as provided in 
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Section 3.1 of the General Assembly Organization Act.  Upon 
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filing this report the Task Force is dissolved.
 
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    Section 90. Expiration of Act.   This Act is repealed on 
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January 1, 2011.".