Illinois General Assembly - Full Text of SB1085
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Full Text of SB1085  102nd General Assembly



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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title; references to Act.
5    (a) Short title. This Act may be cited as the Educational
6Planning Services Consumer Protection Act.
7    (b) References to Act. This Act may be referred to as the
8Segura Law.
9    Section 5. Findings. The General Assembly finds and
10declares all of the following:
11        (1) It is in the interest of this State to protect
12    Illinois residents and their families from the predatory
13    and deceptive practices of certain educational planning
14    service providers. It is in the public interest to protect
15    all Illinois families, but particularly the most
16    vulnerable families, those who are of lower income, and
17    those without prior college-going experience, from costly,
18    deceptive, and predatory practices that have proliferated
19    as the cost of postsecondary education has risen and
20    anxiety about student loan debt has grown.
21        (2) By charging an upfront premium, these entities can
22    leave these most vulnerable families little or no recourse
23    if they receive no services or if the services that they



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1    receive are inadequate. Additionally, many of the services
2    offered by for-profit entities at a premium are readily
3    available at no charge to all students through programs
4    offered by public and not-for-profit organizations, such
5    as the Illinois Student Assistance Commission, a local
6    library, or an institution of higher learning.
7        (3) Families with little knowledge of the college
8    planning process, few financial resources, limited English
9    proficiency, or a combination of these factors are
10    particularly vulnerable to high pressure tactics that may
11    be used to induce them to sign lengthy, highly technical,
12    and costly contracts. Currently, there is no adequate
13    recourse available to help families who have been
14    victimized by opportunistic bad actors.
15        (4) Some educational planning service providers have
16    also provided legally questionable guidance to families
17    who would like to reduce their higher education costs but
18    would not typically qualify for grants based on financial
19    need. Families have been counseled by disreputable
20    educational planning service providers to take extreme and
21    deceptive measures, such as relinquishing their parental
22    responsibilities through a court-ordered legal
23    guardianship so that the child qualifies as an independent
24    student, thereby basing a need calculation on only the
25    student's financial information, allowing the student to
26    qualify for need-based aid.



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1        (5) Unrestrained, these types of deceptive practices
2    are a barrier to higher education access and to the ideals
3    of diversity, equity, and inclusion in higher education in
4    this State, and it is in the public interest to regulate
5    them. The Segura Law would be the first step in providing
6    recourse and thereby security to aspiring Illinois college
7    students and their families.
8    Section 10. Purpose and construction. The purpose of this
9Act is to protect consumers who enter into agreements with
10educational planning service providers and to regulate
11educational planning service providers. This Act shall be
12construed as a consumer protection law for all purposes. This
13Act shall be liberally construed to effectuate its purpose.
14    Section 15. Definitions. As used in this Act:
15    "Consumer" means any person who purchases or contracts for
16the purchase of educational planning services.
17    "Educational planning services" means college and career
18preparatory planning services, including, but not limited to,
19advice regarding and assistance with college and career
20searches; college application preparation or submission;
21financial aid application planning, preparation, or
22submission; and scholarship searches and applications.
23    "Educational planning service provider" means any person
24or entity engaging in or holding itself out as engaging in the



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1business of providing educational planning services in
2exchange for any fee or compensation or any person who
3solicits or acts on behalf of any person or entity engaging in
4or holding itself out as engaging in the business of providing
5educational planning services in exchange for any fee or
6compensation. "Educational planning service provider" does not
7include any of the following:
8        (1) A not-for-profit or public institution of higher
9    learning, as defined in the Higher Education Student
10    Assistance Act, and the individuals employed by that
11    institution where educational planning services are
12    provided as part of the financial aid or career counseling
13    services offered by the institution.
14        (2) Public entities and their officers while acting in
15    their official capacities.
16        (3) Persons acting on behalf of a consumer under court
17    order or as a legal representative.
18    "Enrollment fee" or "set up fee" means any fee,
19obligation, or compensation paid or to be paid by the consumer
20to an educational planning service provider in consideration
21of or in connection with establishing a contract or other
22agreement with a consumer related to the provision of
23educational planning services.
24    "Maintenance fee" means any fee, obligation, or
25compensation paid or to be paid by the consumer on a periodic
26basis to an educational planning service provider in



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1consideration for maintaining the relationship and services to
2be provided by the educational planning service provider in
3accordance with a contract with a consumer related to the
4provision of educational planning services.
5    Section 20. Prohibitions and requirements.
6    (a) It shall be unlawful for any person or entity to act as
7an educational planning service provider except as authorized
8by this Act.
9    (b) An educational planning service provider may not
10provide educational planning services to a consumer for a fee
11without a written contract signed and dated by both the
12consumer and the educational planning service provider. A
13contract between an educational planning service provider and
14a consumer for the provision of educational planning services
15shall disclose clearly and conspicuously all of the following:
16        (1) The name and address of the consumer.
17        (2) The date of execution of the contract.
18        (3) The legal name of the educational planning service
19    provider, including any other business names used by the
20    educational planning service provider.
21        (4) The corporate address and regular business
22    address, including a street address, of the educational
23    planning service provider.
24        (5) The telephone number at which the consumer may
25    speak with a representative of the educational planning



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1    service provider during normal business hours.
2        (6) A description of the services and an itemized list
3    of all fees to be paid by the consumer for each service and
4    the date, approximate date, or circumstances under which
5    each fee will become due.
6        (7) The contents of the Consumer Notice and Rights
7    Form provided in Section 25 of this Act.
8        (8) A written notice to the consumer that the consumer
9    may cancel the contract at any time until after the
10    educational planning service provider has fully performed
11    each service the educational planning service provider
12    contracted to perform or represented he or she would
13    perform and that the consumer may not be required to pay
14    for services the consumer did not receive and shall be
15    entitled to a full refund of any fees paid for educational
16    planning services not provided.
17        (9) A form the consumer may use to cancel the contract
18    pursuant to this Act. The form shall include the name and
19    mailing address of the educational planning service
20    provider and shall disclose clearly and conspicuously how
21    the consumer can cancel the contract, including applicable
22    addresses, telephone numbers, facsimile numbers, and
23    electronic mail addresses the consumer can use to cancel
24    the contract. Notwithstanding any other provision of this
25    paragraph (9) to the contrary, a consumer's lack of strict
26    adherence to an educational planning service provider's



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1    cancellation form or processes does not invalidate a
2    consumer's good faith and reasonable method or form of
3    cancellation.
4    (c) If an educational planning service provider
5communicates with a consumer primarily in a language other
6than English, then the educational planning service provider
7shall furnish to the consumer a translation of all the
8disclosures and documents required by this Act, including, but
9not limited to, the contract, in that other language.
10    (d) An educational planning service provider may not
11charge or receive from a consumer any enrollment fee, set up
12fee, up-front fee of any kind, or maintenance fee, and a
13consumer shall pay only for the educational planning services
15    (e) An educational planning service provider may not do
16any of the following:
17        (1) Represent, expressly or by implication, any
18    results or outcomes of its educational planning services
19    in any advertising, marketing, or other communication to
20    consumers unless the educational planning service provider
21    possesses substantiation for such representation at the
22    time such representation is made.
23        (2) Expressly or by implication, make any unfair or
24    deceptive representations or any omissions of material
25    facts in any of its advertising or marketing
26    communications concerning educational planning services.



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1        (3) Advertise or market educational planning services,
2    enter into a contract for educational planning services,
3    or provide educational planning services without making
4    the disclosures required in this Act at the times and in
5    the form and manner as described in this Act.
6        (4) Advise about or represent, expressly or by
7    implication, any unlawful services to be provided or fees
8    to be collected by the educational planning service
9    provider.
10        (5) Advise or represent, expressly or by implication,
11    that consumers pay any fees that are unearned by the
12    educational planning service provider.
13        (6) Advise, encourage, or represent, expressly or by
14    implication, that a consumer provide false or misleading
15    information about financial or other circumstances to gain
16    admission into a higher education institution or to be
17    eligible for student financial aid, including, but not
18    limited to, advising a consumer to petition for the
19    appointment of a guardian for a minor for the primary
20    purpose of reducing the financial resources available to
21    the minor in order to cause the minor to qualify for public
22    or private financial aid.
23    Section 25. Required disclosures.
24    (a) In any marketing or advertising communications, an
25education planning service provider must provide the following



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1disclosure verbatim, both orally and in writing, with the
5        Educational planning services of this type are
6    provided free of charge at no cost to you by the Illinois
7    Student Assistance Commission and may also be offered by
8    other public or not-for-profit entities, such as a public
9    library or an institution of higher learning.
10    (b) An educational planning service provider must provide
11the following warning verbatim, both orally and in writing,
12with the caption "CONSUMER NOTICE AND RIGHTS FORM" in at least
1328-point font and the remaining portion in at least 14-point
14font, to a consumer before the consumer signs a contract for
15the educational planning service provider's services:

18        Educational planning services of this type are
19    provided free of charge at no cost to you by the Illinois
20    Student Assistance Commission and may be offered by other
21    public or not-for-profit entities, such as a public
22    library or an institution of higher learning.



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2        If you sign a contract with an educational planning
3    service provider, you have the right to cancel at any time
4    and receive a full refund of all unearned fees you have
5    paid to the provider. You will not be responsible for
6    payment of services that are not fully performed.
8        If you are dissatisfied with an educational planning
9    service provider or have any questions, please bring it to
10    the attention of the Illinois Attorney General's Office.
11    (c) The educational planning service provider must
12maintain proof that it has provided to the consumer the
13Consumer Notice and Rights Form in accordance with subsection
14(b) of this Section.
15    (d) The consumer shall sign and date an acknowledgment
16form titled "Consumer Notice and Rights Form" that states: "I,
17the consumer, have received from the educational planning
18service provider a copy of the form titled "Consumer Notice
19and Rights Form," and I have been provided the Illinois
20Student Assistance Commission's Internet website address where
21educational planning services are provided free of charge.".
22The educational planning service provider or its
23representative shall also sign and date the acknowledgment



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1form, which shall include the name and address of the
2educational planning service provider. The acknowledgment form
3shall be in duplicate and shall be incorporated into the
4Consumer Notice and Rights Form under subsection (b) of this
5Section. The original acknowledgment form shall be retained by
6the educational planning service provider, and the duplicate
7copy shall be retained by the consumer.
8    (e) If the acknowledgment form under subsection (d) of
9this Section is in an electronic format, then, in addition to
10the other requirements of this Act, the acknowledgment form
12        (1) contain a live link to the Illinois Student
13    Assistance Commission's Internet website where educational
14    planning services are offered free of charge; and
15        (2) be digitally signed by the consumer in compliance
16    with the provisions of the federal Electronic Signatures
17    in Global and National Commerce Act concerning consumer
18    disclosures, including subsection (c) of Section 101 of
19    that Act.
20    Section 30. Cancellation of contract; refund.
21    (a) A consumer may cancel a contract with an educational
22planning service provider at any time before the educational
23planning service provider has fully performed each service the
24educational planning service provider contracted to perform or
25represented it would perform.



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1    (b) If a consumer cancels a contract with an educational
2planning service provider, then the educational planning
3service provider shall refund all fees and compensation, with
4the exception of any earned fees for services provided.
5    (c) At any time upon a material violation of this Act on
6the part of the educational planning service provider, the
7educational planning service provider shall refund all fees
8and compensation to the consumer.
9    (d) An educational planning service provider shall make
10any refund required under this Act within 5 business days
11after the notice of cancellation or voiding of the contract
12due to a violation of this Act and shall include with the
13refund a full statement of account showing fees received and
14fees refunded.
15    (e) Upon cancellation or voiding of the contract, all
16direct debit authorizations granted to the educational
17planning service provider by the consumer shall be considered
18revoked and voided.
19    (f) Upon the termination of the contract for any reason,
20the educational planning service provider shall provide timely
21notice that it no longer represents the consumer to any entity
22or agency with whom the educational planning service provider
23has had any prior communication on behalf of the consumer in
24connection with the provision of any educational planning



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1    Section 35. Noncompliance.
2    (a) Any waiver by a consumer of any protection provided by
3or any right of the consumer under this Act:
4        (1) shall be treated as void; and
5        (2) may not be enforced by any federal or State court
6    or any other person.
7    (b) Any attempt by a person to obtain a waiver from a
8consumer of any protection provided by or any right or
9protection of the consumer or any obligation or requirement of
10the educational planning service provider under this Act is a
11violation of this Act.
12    (c) Any contract for educational planning services that
13does not comply with the applicable provisions of this Act:
14        (1) shall be treated as void; and
15        (2) may not be enforced by any federal or State court
16    or any other person.
17Upon notice of a void contract, a refund by the educational
18planning service provider to the consumer shall be made as
19provided under subsections (c), (d), (e), and (f) of Section
2030 of this Act.
21    Section 40. Civil remedies; injunction.
22    (a) A violation of this Act constitutes an unlawful
23practice under the Consumer Fraud and Deceptive Business
24Practices Act. All remedies, penalties, and authority granted
25to the Attorney General or State's Attorney by the Consumer



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1Fraud and Deceptive Business Practices Act shall be available
2to him or her for the enforcement of this Act.
3    (b) A consumer who suffers loss by reason of a violation of
4this Act may bring a civil action in accordance with the
5Consumer Fraud and Deceptive Business Practices Act to enforce
6a provision of this Act. All remedies and rights granted to a
7consumer by the Consumer Fraud and Deceptive Business
8Practices Act shall be available to the consumer bringing such
9an action. The remedies and rights provided for in this Act are
10not exclusive, but cumulative, and all other applicable claims
11are specifically preserved.
12    (c) Any contract for educational planning services made in
13violation of this Act shall be null and void and of no legal
15    (d) To engage in educational planning services in
16violation of this Act is declared to be inimical to the public
17welfare and to constitute a public nuisance. The Illinois
18Student Assistance Commission may, in the name of the people
19of the State of Illinois, through the Attorney General, file a
20complaint for an injunction in the circuit court to enjoin
21such person from engaging in that unlawful business. An
22injunction proceeding shall be in addition to and not in lieu
23of penalties and remedies otherwise provided in this Act.
24    Section 45. Notice. The Illinois Student Assistance
25Commission must make available on its Internet website the



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1most current disclosure of free support, and the educational
2planning service provider is responsible for providing to the
3consumer the most current disclosure of free support available
4on the Commission's Internet website.
5    Section 90. Rules. The Illinois Student Assistance
6Commission shall adopt and enforce all reasonable rules
7necessary or appropriate for the administration of this Act.
8    Section 900. The Consumer Fraud and Deceptive Business
9Practices Act is amended by adding Section 2WWW as follows:
10    (815 ILCS 505/2WWW new)
11    Sec. 2WWW. Violations of the Educational Planning Services
12Consumer Protection Act. Any person who violates the
13Educational Planning Services Consumer Protection Act commits
14an unlawful practice within the meaning of this Act.