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


Sen. Celina Villanueva

Filed: 4/14/2021





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2    AMENDMENT NO. ______. Amend Senate Bill 1085 by replacing
3everything after the enacting clause with the following:
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



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1    those without prior college-going experience, from costly,
2    deceptive, and predatory practices that have proliferated
3    as the cost of postsecondary education has risen and
4    anxiety about student loan debt has grown.
5        (2) By charging an upfront premium, these entities can
6    leave these most vulnerable families little or no recourse
7    if they receive no services or if the services that they
8    receive are inadequate. Additionally, many of the services
9    offered by for-profit entities at a premium are readily
10    available at no charge to all students through programs
11    offered by public and not-for-profit organizations, such
12    as the Illinois Student Assistance Commission, a local
13    library, or an institution of higher learning.
14        (3) Families with little knowledge of the college
15    planning process, few financial resources, limited English
16    proficiency, or a combination of these factors are
17    particularly vulnerable to high pressure tactics that may
18    be used to induce them to sign lengthy, highly technical,
19    and costly contracts. Currently, there is no adequate
20    recourse available to help families who have been
21    victimized by opportunistic bad actors.
22        (4) Some educational planning service providers have
23    also provided legally questionable guidance to families
24    who would like to reduce their higher education costs but
25    would not typically qualify for grants based on financial
26    need. Families have been counseled by disreputable



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1    educational planning service providers to take extreme and
2    deceptive measures, such as relinquishing their parental
3    responsibilities through a court-ordered legal
4    guardianship so that the child qualifies as an independent
5    student, thereby basing a need calculation on only the
6    student's financial information, allowing the student to
7    qualify for need-based aid.
8        (5) Unrestrained, these types of deceptive practices
9    are a barrier to higher education access and to the ideals
10    of diversity, equity, and inclusion in higher education in
11    this State, and it is in the public interest to regulate
12    them. The Segura Law would be the first step in providing
13    recourse and thereby security to aspiring Illinois college
14    students and their families.
15    Section 10. Purpose and construction. The purpose of this
16Act is to protect consumers who enter into agreements with
17educational planning service providers and to regulate
18educational planning service providers. This Act shall be
19construed as a consumer protection law for all purposes. This
20Act shall be liberally construed to effectuate its purpose.
21    Section 15. Definitions. As used in this Act:
22    "Consumer" means any person who purchases or contracts for
23the purchase of educational planning services.
24    "Educational planning services" means college and career



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



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1to an educational planning service provider in consideration
2of or in connection with establishing a contract or other
3agreement with a consumer related to the provision of
4educational planning services.
5    "Maintenance fee" means any fee, obligation, or
6compensation paid or to be paid by the consumer on a periodic
7basis to an educational planning service provider in
8consideration for maintaining the relationship and services to
9be provided by the educational planning service provider in
10accordance with a contract with a consumer related to the
11provision of educational planning services.
12    Section 20. Prohibitions and requirements.
13    (a) It shall be unlawful for any person or entity to act as
14an educational planning service provider except as authorized
15by this Act.
16    (b) An educational planning service provider may not
17provide educational planning services to a consumer for a fee
18without a written contract signed and dated by both the
19consumer and the educational planning service provider. A
20contract between an educational planning service provider and
21a consumer for the provision of educational planning services
22shall disclose clearly and conspicuously all of the following:
23        (1) The name and address of the consumer.
24        (2) The date of execution of the contract.
25        (3) The legal name of the educational planning service



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



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1    provider and shall disclose clearly and conspicuously how
2    the consumer can cancel the contract, including applicable
3    addresses, telephone numbers, facsimile numbers, and
4    electronic mail addresses the consumer can use to cancel
5    the contract. Notwithstanding any other provision of this
6    paragraph (9) to the contrary, a consumer's lack of strict
7    adherence to an educational planning service provider's
8    cancellation form or processes does not invalidate a
9    consumer's good faith and reasonable method or form of
10    cancellation.
11    (c) If an educational planning service provider
12communicates with a consumer primarily in a language other
13than English, then the educational planning service provider
14shall furnish to the consumer a translation of all the
15disclosures and documents required by this Act, including, but
16not limited to, the contract, in that other language.
17    (d) An educational planning service provider may not
18charge or receive from a consumer any enrollment fee, set up
19fee, up-front fee of any kind, or maintenance fee, and a
20consumer shall pay only for the educational planning services
22    (e) An educational planning service provider may not do
23any of the following:
24        (1) Represent, expressly or by implication, any
25    results or outcomes of its educational planning services
26    in any advertising, marketing, or other communication to



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1    consumers unless the educational planning service provider
2    possesses substantiation for such representation at the
3    time such representation is made.
4        (2) Expressly or by implication, make any unfair or
5    deceptive representations or any omissions of material
6    facts in any of its advertising or marketing
7    communications concerning educational planning services.
8        (3) Advertise or market educational planning services,
9    enter into a contract for educational planning services,
10    or provide educational planning services without making
11    the disclosures required in this Act at the times and in
12    the form and manner as described in this Act.
13        (4) Advise about or represent, expressly or by
14    implication, any unlawful services to be provided or fees
15    to be collected by the educational planning service
16    provider.
17        (5) Advise or represent, expressly or by implication,
18    that consumers pay any fees that are unearned by the
19    educational planning service provider.
20        (6) Advise, encourage, or represent, expressly or by
21    implication, that a consumer provide false or misleading
22    information about financial or other circumstances to gain
23    admission into a higher education institution or to be
24    eligible for student financial aid, including, but not
25    limited to, advising a consumer to petition for the
26    appointment of a guardian for a minor for the primary



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1    purpose of reducing the financial resources available to
2    the minor in order to cause the minor to qualify for public
3    or private financial aid.
4    Section 25. Required disclosures.
5    (a) In any marketing or advertising communications, an
6education planning service provider must provide the following
7disclosure verbatim, both orally and in writing, with the
11        Educational planning services of this type are
12    provided free of charge at no cost to you by the Illinois
13    Student Assistance Commission and may also be offered by
14    other public or not-for-profit entities, such as a public
15    library or an institution of higher learning.
16    (b) An educational planning service provider must provide
17the following warning verbatim, both orally and in writing,
18with the caption "CONSUMER NOTICE AND RIGHTS FORM" in at least
1928-point font and the remaining portion in at least 14-point
20font, to a consumer before the consumer signs a contract for
21the educational planning service provider's services:




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2        Educational planning services of this type are
3    provided free of charge at no cost to you by the Illinois
4    Student Assistance Commission and may be offered by other
5    public or not-for-profit entities, such as a public
6    library or an institution of higher learning.
8        If you sign a contract with an educational planning
9    service provider, you have the right to cancel at any time
10    and receive a full refund of all unearned fees you have
11    paid to the provider. You will not be responsible for
12    payment of services that are not fully performed.
14        If you are dissatisfied with an educational planning
15    service provider or have any questions, please bring it to
16    the attention of the Illinois Attorney General's Office.
17    (c) The educational planning service provider must
18maintain proof that it has provided to the consumer the
19Consumer Notice and Rights Form in accordance with subsection
20(b) of this Section.
21    (d) The consumer shall sign and date an acknowledgment
22form titled "Consumer Notice and Rights Form" that states: "I,



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1the consumer, have received from the educational planning
2service provider a copy of the form titled "Consumer Notice
3and Rights Form," and I have been provided the Illinois
4Student Assistance Commission's Internet website address where
5educational planning services are provided free of charge.".
6The educational planning service provider or its
7representative shall also sign and date the acknowledgment
8form, which shall include the name and address of the
9educational planning service provider. The acknowledgment form
10shall be in duplicate and shall be incorporated into the
11Consumer Notice and Rights Form under subsection (b) of this
12Section. The original acknowledgment form shall be retained by
13the educational planning service provider, and the duplicate
14copy shall be retained by the consumer.
15    (e) If the acknowledgment form under subsection (d) of
16this Section is in an electronic format, then, in addition to
17the other requirements of this Act, the acknowledgment form
19        (1) contain a live link to the Illinois Student
20    Assistance Commission's Internet website where educational
21    planning services are offered free of charge; and
22        (2) be digitally signed by the consumer in compliance
23    with the provisions of the federal Electronic Signatures
24    in Global and National Commerce Act concerning consumer
25    disclosures, including subsection (c) of Section 101 of
26    that Act.



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1    Section 30. Cancellation of contract; refund.
2    (a) A consumer may cancel a contract with an educational
3planning service provider at any time before the educational
4planning service provider has fully performed each service the
5educational planning service provider contracted to perform or
6represented it would perform.
7    (b) If a consumer cancels a contract with an educational
8planning service provider, then the educational planning
9service provider shall refund all fees and compensation, with
10the exception of any earned fees for services provided.
11    (c) At any time upon a material violation of this Act on
12the part of the educational planning service provider, the
13educational planning service provider shall refund all fees
14and compensation to the consumer.
15    (d) An educational planning service provider shall make
16any refund required under this Act within 5 business days
17after the notice of cancellation or voiding of the contract
18due to a violation of this Act and shall include with the
19refund a full statement of account showing fees received and
20fees refunded.
21    (e) Upon cancellation or voiding of the contract, all
22direct debit authorizations granted to the educational
23planning service provider by the consumer shall be considered
24revoked and voided.
25    (f) Upon the termination of the contract for any reason,



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1the educational planning service provider shall provide timely
2notice that it no longer represents the consumer to any entity
3or agency with whom the educational planning service provider
4has had any prior communication on behalf of the consumer in
5connection with the provision of any educational planning
7    Section 35. Noncompliance.
8    (a) Any waiver by a consumer of any protection provided by
9or any right of the consumer under this Act:
10        (1) shall be treated as void; and
11        (2) may not be enforced by any federal or State court
12    or any other person.
13    (b) Any attempt by a person to obtain a waiver from a
14consumer of any protection provided by or any right or
15protection of the consumer or any obligation or requirement of
16the educational planning service provider under this Act is a
17violation of this Act.
18    (c) Any contract for educational planning services that
19does not comply with the applicable provisions of this Act:
20        (1) shall be treated as void; and
21        (2) may not be enforced by any federal or State court
22    or any other person.
23Upon notice of a void contract, a refund by the educational
24planning service provider to the consumer shall be made as
25provided under subsections (c), (d), (e), and (f) of Section



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130 of this Act.
2    Section 40. Civil remedies; injunction.
3    (a) A violation of this Act constitutes an unlawful
4practice under the Consumer Fraud and Deceptive Business
5Practices Act. All remedies, penalties, and authority granted
6to the Attorney General or State's Attorney by the Consumer
7Fraud and Deceptive Business Practices Act shall be available
8to him or her for the enforcement of this Act.
9    (b) A consumer who suffers loss by reason of a violation of
10this Act may bring a civil action in accordance with the
11Consumer Fraud and Deceptive Business Practices Act to enforce
12a provision of this Act. All remedies and rights granted to a
13consumer by the Consumer Fraud and Deceptive Business
14Practices Act shall be available to the consumer bringing such
15an action. The remedies and rights provided for in this Act are
16not exclusive, but cumulative, and all other applicable claims
17are specifically preserved.
18    (c) Any contract for educational planning services made in
19violation of this Act shall be null and void and of no legal
21    (d) To engage in educational planning services in
22violation of this Act is declared to be inimical to the public
23welfare and to constitute a public nuisance. The Illinois
24Student Assistance Commission may, in the name of the people
25of the State of Illinois, through the Attorney General, file a



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1complaint for an injunction in the circuit court to enjoin
2such person from engaging in that unlawful business. An
3injunction proceeding shall be in addition to and not in lieu
4of penalties and remedies otherwise provided in this Act.
5    Section 45. Notice. The Illinois Student Assistance
6Commission must make available on its Internet website the
7most current disclosure of free support, and the educational
8planning service provider is responsible for providing to the
9consumer the most current disclosure of free support available
10on the Commission's Internet website.
11    Section 90. Rules. The Illinois Student Assistance
12Commission shall adopt and enforce all reasonable rules
13necessary or appropriate for the administration of this Act.
14    Section 900. The Consumer Fraud and Deceptive Business
15Practices Act is amended by adding Section 2WWW as follows:
16    (815 ILCS 505/2WWW new)
17    Sec. 2WWW. Violations of the Educational Planning Services
18Consumer Protection Act. Any person who violates the
19Educational Planning Services Consumer Protection Act commits
20an unlawful practice within the meaning of this Act.".