Colorado private education lender registration due September 1st, the Colorado Department of Law has just announced its intention to integrate a new group within its jurisdiction: private post-secondary schools that use revenue sharing agreements (ISAs) to help fund students’ education. Schools regulated by the Private Vocational Schools Division received notice of this interpretation on Friday.
The law department did not specify its rationale, although it was undoubtedly influenced by the recent California decision. consent order bringing ISA educational services under the California Student Loans Act. It is not clear whether the Ministry will now seek to regulate (i) other ISA funders, holders and assignees under the Student Loans Equity Act, (which promulgated the registration of private education lenders) and (ii) ISA agents under the Colorado Student Loans Service Act.
The private education lender registration nominally applies (1) to persons engaged in the business of granting or granting private education loans, (2) to holders of such loans, and ( 3) “creditors”, broadly defined as the person who makes or arranges a loan to private education and to whom the loan is initially payable, or the assignee of a creditor’s right to payment. The law defines a “private education loan” in the same way as the federal law, but a little more broadly, in that all expenses related to post-secondary education can be financed by such a loan (not just those related to post-secondary education). the “cost of attendance” under the Federal Law on Higher Education). . Colorado also does not rule out that the open-ended loan constitutes a loan for private education.
A number of deposit-taking institutions are totally exempt from the Student Loan Equity Act: state and federal chartered banks, credit unions, and industrial banks in Utah. A number of entities are exempt from registration only: retailers, lessors and their successors who have filed a notification under the Uniform Consumer Credit Code; licensed supervised lenders; licensed collection agencies; and licensed student loan managers. Public and private, not-for-profit post-secondary institutions have a lower enrollment cost ($ 300) than other institutions ($ 1,500).
Registrants should share a copy of their consumer contract and volume and default rate information, which will be posted online by the Ministry. Among other things, the Student Loan Equity Act (i) provides certain protections specifically for loans with co-signatories; (ii) extend disability release requirements and protections so that a borrower or co-signer can be released from repayment obligations in the event of permanent disability and the lender is prohibited from monitoring the status of invalidity of the borrower after such release; (iii) require additional information in relation to any refinancing of an existing student loan; (iv) prohibits “robotic signing” of documents used in debt collection proceedings; (v) require specific proof of the origin of the loan and the chain of ownership of the debt before a creditor or collection agency can initiate legal proceedings; (vi) prohibits automatic defaults, in which a loan is declared immediately due and payable in the event of the death or bankruptcy of a co-signer, even though there has been no default; (vii) provide legal recourse to borrowers who are harmed by the predatory acts and practices of a lender, creditor or collection agency; and (viii) direct license fees and civil penalties to a student loans ombudsman and student loan administration fund.