§ 1650. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest
(a)
Definitions
As used in this section—
(1)
the term “covered educational institution”—
(2)
the term “gift”—
(A)
(i)
means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having more than a de minimis monetary value, including services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred; and
(ii)
includes an item described in clause (i) provided to a family member of an officer, employee, or agent of a covered educational institution, or to any other individual based on that individual’s relationship with the officer, employee, or agent, if—
(B)
does not include—
(i)
standard informational material related to a loan, default aversion, default prevention, or financial literacy;
(ii)
food, refreshments, training, or informational material furnished to an officer, employee, or agent of a covered educational institution, as an integral part of a training session or through participation in an advisory council that is designed to improve the service of the private educational lender to the covered educational institution, if such training or participation contributes to the professional development of the officer, employee, or agent of the covered educational institution;
(iii)
favorable terms, conditions, and borrower benefits on a private education loan provided to a student employed by the covered educational institution, if such terms, conditions, or benefits are not provided because of the student’s employment with the covered educational institution;
(iv)
the provision of financial literacy counseling or services, including counseling or services provided in coordination with a covered educational institution, to the extent that such counseling or services are not undertaken to secure—
(3)
the term “institution of higher education” has the same meaning as in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);
(4)
the term “postsecondary educational expenses” means any of the expenses that are included as part of the cost of attendance of a student, as defined under section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll);
(5)
the term “preferred lender arrangement” has the same meaning as in section 151 of the Higher Education Act of 1965 [20 U.S.C. 1019];
(6)
the term “private educational lender” means—
(A)
a financial institution, as defined in section
1813 of title
12 that solicits, makes, or extends private education loans;
(7)
the term “private education loan”—
(8)
the term “revenue sharing” means an arrangement between a covered educational institution and a private educational lender under which—
(A)
a private educational lender provides or issues private education loans with respect to students attending the covered educational institution;
(B)
the covered educational institution recommends to students or others the private educational lender or the private education loans of the private educational lender; and
(C)
the private educational lender pays a fee or provides other material benefits, including profit sharing, to the covered educational institution in connection with the private education loans provided to students attending the covered educational institution or a borrower acting on behalf of a student.
(b)
Prohibition on certain gifts and arrangements
A private educational lender may not, directly or indirectly—
(c)
Prohibition on co-branding
A private educational lender may not use the name, emblem, mascot, or logo of the covered educational institution, or other words, pictures, or symbols readily identified with the covered educational institution, in the marketing of private education loans in any way that implies that the covered educational institution endorses the private education loans offered by the private educational lender.
(d)
Advisory Board compensation
Any person who is employed in the financial aid office of a covered educational institution, or who otherwise has responsibilities with respect to private education loans or other financial aid of the institution, and who serves on an advisory board, commission, or group established by a private educational lender or group of such lenders shall be prohibited from receiving anything of value from the private educational lender or group of lenders. Nothing in this subsection prohibits the reimbursement of reasonable expenses incurred by an employee of a covered educational institution as part of their service on an advisory board, commission, or group described in this subsection.
(e)
Prohibition on prepayment or repayment fees or penalty
It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan.
(f)
Credit card protections for college students
(1)
Disclosure required
An institution of higher education shall publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card.
(2)
Inducements prohibited
No card issuer or creditor may offer to a student at an institution of higher education any tangible item to induce such student to apply for or participate in an open end consumer credit plan offered by such card issuer or creditor, if such offer is made—
(3)
Sense of the Congress
It is the sense of the Congress that each institution of higher education should consider adopting the following policies relating to credit cards:
(A)
That any card issuer that markets a credit card on the campus of such institution notify the institution of the location at which such marketing will take place.
[1] So in original. The word “of” probably should not appear.