Public Act 102-0571
 
SB1085 EnrolledLRB102 04908 CPF 14927 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title; references to Act.
    (a) Short title. This Act may be cited as the Educational
Planning Services Consumer Protection Act.
    (b) References to Act. This Act may be referred to as the
Segura Law.
 
    Section 5. Findings. The General Assembly finds and
declares all of the following:
        (1) It is in the interest of this State to protect
    Illinois residents and their families from the predatory
    and deceptive practices of certain educational planning
    service providers. It is in the public interest to protect
    all Illinois families, but particularly the most
    vulnerable families, those who are of lower income, and
    those without prior college-going experience, from costly,
    deceptive, and predatory practices that have proliferated
    as the cost of postsecondary education has risen and
    anxiety about student loan debt has grown.
        (2) By charging an upfront premium, these entities can
    leave these most vulnerable families little or no recourse
    if they receive no services or if the services that they
    receive are inadequate. Additionally, many of the services
    offered by for-profit entities at a premium are readily
    available at no charge to all students through programs
    offered by public and not-for-profit organizations, such
    as the Illinois Student Assistance Commission, a local
    library, or an institution of higher learning.
        (3) Families with little knowledge of the college
    planning process, few financial resources, limited English
    proficiency, or a combination of these factors are
    particularly vulnerable to high pressure tactics that may
    be used to induce them to sign lengthy, highly technical,
    and costly contracts. Currently, there is no adequate
    recourse available to help families who have been
    victimized by opportunistic bad actors.
        (4) Some educational planning service providers have
    also provided legally questionable guidance to families
    who would like to reduce their higher education costs but
    would not typically qualify for grants based on financial
    need. Families have been counseled by disreputable
    educational planning service providers to take extreme and
    deceptive measures, such as relinquishing their parental
    responsibilities through a court-ordered legal
    guardianship so that the child qualifies as an independent
    student, thereby basing a need calculation on only the
    student's financial information, allowing the student to
    qualify for need-based aid.
        (5) Unrestrained, these types of deceptive practices
    are a barrier to higher education access and to the ideals
    of diversity, equity, and inclusion in higher education in
    this State, and it is in the public interest to regulate
    them. The Segura Law would be the first step in providing
    recourse and thereby security to aspiring Illinois college
    students and their families.
 
    Section 10. Purpose and construction. The purpose of this
Act is to protect consumers who enter into agreements with
educational planning service providers and to regulate
educational planning service providers. This Act shall be
construed as a consumer protection law for all purposes. This
Act shall be liberally construed to effectuate its purpose.
 
    Section 15. Definitions. As used in this Act:
    "Consumer" means any person who purchases or contracts for
the purchase of educational planning services.
    "Educational planning services" means college and career
preparatory planning services, including, but not limited to,
advice regarding and assistance with college and career
searches; college application preparation or submission;
financial aid application planning, preparation, or
submission; and scholarship searches and applications.
    "Educational planning service provider" means any person
or entity engaging in or holding itself out as engaging in the
business of providing educational planning services in
exchange for any fee or compensation or any person who
solicits or acts on behalf of any person or entity engaging in
or holding itself out as engaging in the business of providing
educational planning services in exchange for any fee or
compensation. "Educational planning service provider" does not
include any of the following:
        (1) A not-for-profit or public institution of higher
    learning, as defined in the Higher Education Student
    Assistance Act, and the individuals employed by that
    institution where educational planning services are
    provided as part of the financial aid or career counseling
    services offered by the institution.
        (2) Public entities and their officers while acting in
    their official capacities.
        (3) Persons acting on behalf of a consumer under court
    order or as a legal representative.
    "Enrollment fee" or "set up fee" means any fee,
obligation, or compensation paid or to be paid by the consumer
to an educational planning service provider in consideration
of or in connection with establishing a contract or other
agreement with a consumer related to the provision of
educational planning services.
    "Maintenance fee" means any fee, obligation, or
compensation paid or to be paid by the consumer on a periodic
basis to an educational planning service provider in
consideration for maintaining the relationship and services to
be provided by the educational planning service provider in
accordance with a contract with a consumer related to the
provision of educational planning services.
 
    Section 20. Prohibitions and requirements.
    (a) It shall be unlawful for any person or entity to act as
an educational planning service provider except as authorized
by this Act.
    (b) An educational planning service provider may not
provide educational planning services to a consumer for a fee
without a written contract signed and dated by both the
consumer and the educational planning service provider. A
contract between an educational planning service provider and
a consumer for the provision of educational planning services
shall disclose clearly and conspicuously all of the following:
        (1) The name and address of the consumer.
        (2) The date of execution of the contract.
        (3) The legal name of the educational planning service
    provider, including any other business names used by the
    educational planning service provider.
        (4) The corporate address and regular business
    address, including a street address, of the educational
    planning service provider.
        (5) The telephone number at which the consumer may
    speak with a representative of the educational planning
    service provider during normal business hours.
        (6) A description of the services and an itemized list
    of all fees to be paid by the consumer for each service and
    the date, approximate date, or circumstances under which
    each fee will become due.
        (7) The contents of the Consumer Notice and Rights
    Form provided in Section 25 of this Act.
        (8) A written notice to the consumer that the consumer
    may cancel the contract at any time until after the
    educational planning service provider has fully performed
    each service the educational planning service provider
    contracted to perform or represented he or she would
    perform and that the consumer may not be required to pay
    for services the consumer did not receive and shall be
    entitled to a full refund of any fees paid for educational
    planning services not provided.
        (9) A form the consumer may use to cancel the contract
    pursuant to this Act. The form shall include the name and
    mailing address of the educational planning service
    provider and shall disclose clearly and conspicuously how
    the consumer can cancel the contract, including applicable
    addresses, telephone numbers, facsimile numbers, and
    electronic mail addresses the consumer can use to cancel
    the contract. Notwithstanding any other provision of this
    paragraph (9) to the contrary, a consumer's lack of strict
    adherence to an educational planning service provider's
    cancellation form or processes does not invalidate a
    consumer's good faith and reasonable method or form of
    cancellation.
    (c) If an educational planning service provider
communicates with a consumer primarily in a language other
than English, then the educational planning service provider
shall furnish to the consumer a translation of all the
disclosures and documents required by this Act, including, but
not limited to, the contract, in that other language.
    (d) An educational planning service provider may not
charge or receive from a consumer any enrollment fee, set up
fee, up-front fee of any kind, or maintenance fee, and a
consumer shall pay only for the educational planning services
provided.
    (e) An educational planning service provider may not do
any of the following:
        (1) Represent, expressly or by implication, any
    results or outcomes of its educational planning services
    in any advertising, marketing, or other communication to
    consumers unless the educational planning service provider
    possesses substantiation for such representation at the
    time such representation is made.
        (2) Expressly or by implication, make any unfair or
    deceptive representations or any omissions of material
    facts in any of its advertising or marketing
    communications concerning educational planning services.
        (3) Advertise or market educational planning services,
    enter into a contract for educational planning services,
    or provide educational planning services without making
    the disclosures required in this Act at the times and in
    the form and manner as described in this Act.
        (4) Advise about or represent, expressly or by
    implication, any unlawful services to be provided or fees
    to be collected by the educational planning service
    provider.
        (5) Advise or represent, expressly or by implication,
    that consumers pay any fees that are unearned by the
    educational planning service provider.
        (6) Advise, encourage, or represent, expressly or by
    implication, that a consumer provide false or misleading
    information about financial or other circumstances to gain
    admission into a higher education institution or to be
    eligible for student financial aid, including, but not
    limited to, advising a consumer to petition for the
    appointment of a guardian for a minor for the primary
    purpose of reducing the financial resources available to
    the minor in order to cause the minor to qualify for public
    or private financial aid.
 
    Section 25. Required disclosures.
    (a) In any marketing or advertising communications, an
education planning service provider must provide the following
disclosure verbatim, both orally and in writing, with the
caption:
 
    
CONSUMER NOTICE OF AVAILABILITY
    
OF THESE SERVICES FOR FREE
        Educational planning services of this type are
    provided free of charge at no cost to you by the Illinois
    Student Assistance Commission and may also be offered by
    other public or not-for-profit entities, such as a public
    library or an institution of higher learning.
 
    (b) An educational planning service provider must provide
the following warning verbatim, both orally and in writing,
with the caption "CONSUMER NOTICE AND RIGHTS FORM" in at least
28-point font and the remaining portion in at least 14-point
font, to a consumer before the consumer signs a contract for
the educational planning service provider's services:
 
    
CONSUMER NOTICE AND RIGHTS FORM

 
    
AVAILABILITY OF THESE SERVICES FOR FREE
        Educational planning services of this type are
    provided free of charge at no cost to you by the Illinois
    Student Assistance Commission and may be offered by other
    public or not-for-profit entities, such as a public
    library or an institution of higher learning.
 
    
YOUR RIGHT TO CANCEL
        If you sign a contract with an educational planning
    service provider, you have the right to cancel at any time
    and receive a full refund of all unearned fees you have
    paid to the provider. You will not be responsible for
    payment of services that are not fully performed.
 
    
IF YOU ARE DISSATISFIED OR YOU HAVE QUESTIONS
        If you are dissatisfied with an educational planning
    service provider or have any questions, please bring it to
    the attention of the Illinois Attorney General's Office.
 
    (c) The educational planning service provider must
maintain proof that it has provided to the consumer the
Consumer Notice and Rights Form in accordance with subsection
(b) of this Section.
    (d) The consumer shall sign and date an acknowledgment
form titled "Consumer Notice and Rights Form" that states: "I,
the consumer, have received from the educational planning
service provider a copy of the form titled "Consumer Notice
and Rights Form," and I have been provided the Illinois
Student Assistance Commission's Internet website address where
educational planning services are provided free of charge.".
The educational planning service provider or its
representative shall also sign and date the acknowledgment
form, which shall include the name and address of the
educational planning service provider. The acknowledgment form
shall be in duplicate and shall be incorporated into the
Consumer Notice and Rights Form under subsection (b) of this
Section. The original acknowledgment form shall be retained by
the educational planning service provider, and the duplicate
copy shall be retained by the consumer.
    (e) If the acknowledgment form under subsection (d) of
this Section is in an electronic format, then, in addition to
the other requirements of this Act, the acknowledgment form
shall:
        (1) contain a live link to the Illinois Student
    Assistance Commission's Internet website where educational
    planning services are offered free of charge; and
        (2) be digitally signed by the consumer in compliance
    with the provisions of the federal Electronic Signatures
    in Global and National Commerce Act concerning consumer
    disclosures, including subsection (c) of Section 101 of
    that Act.
 
    Section 30. Cancellation of contract; refund.
    (a) A consumer may cancel a contract with an educational
planning service provider at any time before the educational
planning service provider has fully performed each service the
educational planning service provider contracted to perform or
represented it would perform.
    (b) If a consumer cancels a contract with an educational
planning service provider, then the educational planning
service provider shall refund all fees and compensation, with
the exception of any earned fees for services provided.
    (c) At any time upon a material violation of this Act on
the part of the educational planning service provider, the
educational planning service provider shall refund all fees
and compensation to the consumer.
    (d) An educational planning service provider shall make
any refund required under this Act within 5 business days
after the notice of cancellation or voiding of the contract
due to a violation of this Act and shall include with the
refund a full statement of account showing fees received and
fees refunded.
    (e) Upon cancellation or voiding of the contract, all
direct debit authorizations granted to the educational
planning service provider by the consumer shall be considered
revoked and voided.
    (f) Upon the termination of the contract for any reason,
the educational planning service provider shall provide timely
notice that it no longer represents the consumer to any entity
or agency with whom the educational planning service provider
has had any prior communication on behalf of the consumer in
connection with the provision of any educational planning
services.
 
    Section 35. Noncompliance.
    (a) Any waiver by a consumer of any protection provided by
or any right of the consumer under this Act:
        (1) shall be treated as void; and
        (2) may not be enforced by any federal or State court
    or any other person.
    (b) Any attempt by a person to obtain a waiver from a
consumer of any protection provided by or any right or
protection of the consumer or any obligation or requirement of
the educational planning service provider under this Act is a
violation of this Act.
    (c) Any contract for educational planning services that
does not comply with the applicable provisions of this Act:
        (1) shall be treated as void; and
        (2) may not be enforced by any federal or State court
    or any other person.
Upon notice of a void contract, a refund by the educational
planning service provider to the consumer shall be made as
provided under subsections (c), (d), (e), and (f) of Section
30 of this Act.
 
    Section 40. Civil remedies; injunction.
    (a) A violation of this Act constitutes an unlawful
practice under the Consumer Fraud and Deceptive Business
Practices Act. All remedies, penalties, and authority granted
to the Attorney General or State's Attorney by the Consumer
Fraud and Deceptive Business Practices Act shall be available
to him or her for the enforcement of this Act.
    (b) A consumer who suffers loss by reason of a violation of
this Act may bring a civil action in accordance with the
Consumer Fraud and Deceptive Business Practices Act to enforce
a provision of this Act. All remedies and rights granted to a
consumer by the Consumer Fraud and Deceptive Business
Practices Act shall be available to the consumer bringing such
an action. The remedies and rights provided for in this Act are
not exclusive, but cumulative, and all other applicable claims
are specifically preserved.
    (c) Any contract for educational planning services made in
violation of this Act shall be null and void and of no legal
effect.
    (d) To engage in educational planning services in
violation of this Act is declared to be inimical to the public
welfare and to constitute a public nuisance. The Illinois
Student Assistance Commission may, in the name of the people
of the State of Illinois, through the Attorney General, file a
complaint for an injunction in the circuit court to enjoin
such person from engaging in that unlawful business. An
injunction proceeding shall be in addition to and not in lieu
of penalties and remedies otherwise provided in this Act.
 
    Section 45. Notice. The Illinois Student Assistance
Commission must make available on its Internet website the
most current disclosure of free support, and the educational
planning service provider is responsible for providing to the
consumer the most current disclosure of free support available
on the Commission's Internet website.
 
    Section 90. Rules. The Illinois Student Assistance
Commission shall adopt and enforce all reasonable rules
necessary or appropriate for the administration of this Act.
 
    Section 900. The Consumer Fraud and Deceptive Business
Practices Act is amended by adding Section 2WWW as follows:
 
    (815 ILCS 505/2WWW new)
    Sec. 2WWW. Violations of the Educational Planning Services
Consumer Protection Act. Any person who violates the
Educational Planning Services Consumer Protection Act commits
an unlawful practice within the meaning of this Act.