Private education lenders doing business in Illinois now have access to official informational guides and templates for meeting the November 1, 2022, reporting requirements under the state’s new Know Before You Owe Private Education Loan Act (“KBYO”). 

Promoted as a means to make borrowers aware of federal student loan options before they turn to private loans, KBYO also seeks to collect and publicize data on private educational lending through an annual reporting obligation imposed on lenders.  The requirement applies to any “private educational lender” as defined in Section 140(a)(7) of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1650(a)(7).  Lenders who make more than 10 “private education loans” (as defined in Section 140(a)(8) of TILA) per year must submit a detailed Annual Report to the Illinois Student Loan Ombudsman, which sits within the Attorney General’s Office.  Lenders issuing 10 or fewer such loans must still submit a simplified Annual Statement in lieu of the full report.  Both the Annual Report and the Annual Statement take the form of Excel spreadsheet templates.

For lenders disbursing more than 10 private education loans in the year, the Annual Report template is accompanied by a five-page Annual Reporting Information Guide.  While KBYO specifies five categories of information to be included in the report, the Attorney General’s Office breaks out the categories into discrete parts on the template, as follows:

• Information about the Lender—some of which may be pre-populated using a drop-down list on the form—along with comprehensive data that includes:
  • The total number of private education loans originated in the calendar year; and
  • The historical lifetime default rate on the Lender’s private education loans, calculated from August 26, 2021, the date KBYO was signed into law.
• Information about loan volume, broken out for each institution of higher education disbursed to, including the following data points:
  • Number of private educational loans disbursed to the institution;
  • Number of unique borrowers disbursed to at the institution;
  • Total dollar value of private educational loans disbursed to the institution;
  • Number of loans disbursed to the institution without the certification required by Section 10(a) of KBYO;
  • Total dollar value of loans disbursed to the institution without the 10(a) certification;
  • Number of loans disbursed without 10(a) certification where the institution refused to certify; and
  • Number of loans disbursed without 10(a) certification where the institution notified the Lender it would need more than the statutory 15 days to reply.
• Information corresponding to each model or template promissory note, agreement, contract, or other instrument used during the previous year—copies of which must be submitted separately via email as PDF attachments—including the following identifiers:
  • Dates the model document was used;
  • Number of borrowers provided with substantially similar documents; and
  • Category of borrowers for whom the document was used.

The Annual Statement template is accompanied by a two-page Annual Statement Information Guide.  In contrast to the report, the Annual Statement requires only identifying information about the Lender and a certification of the number of private education loans disbursed during the year.

The Attorney General’s Office states that applicable submissions must be sent via e-mail no later than November 1, 2022.  Deadlines for future years have not yet been made public.

Links to the guides and templates and additional information can be found in the Attorney General’s July 21 press release, as well as on its Student Lending page.