Illinois § 105

§ 105.

Procedure on default. Upon default by the borrower on any loan guaranteed under this Act, upon the death of the borrower, or upon report from the lender that the borrower has become a person with a total and permanent disability, as determined in accordance with the Higher Education Act of 1965, the lender shall promptly notify the Commission, and the Commission shall pay to the lender the amount of loss sustained by the lender upon that loan as soon as that amount has been determined. The amount of loss on any loan shall be determined in accordance with the definitions, rules, and regulations of the Commission, and shall not exceed (1) the unpaid balance of the principal amount; (2) the unpaid accrued interest; and (3) the unpaid late charges. Upon payment by the Commission of the guaranteed portion of the loss, the Commission shall be subrogated to the rights of the holder of the obligation upon the insured loan and shall be entitled to an assignment of the note or other evidence of the guaranteed loan by the lender. The Commission shall file any and all lawsuits on delinquent and defaulted student loans in the County of Cook where venue shall be deemed to be proper. A defendant may request a change of venue to the county where he resides, and the court has the authority to grant the change. Any defendant, within 30 days of service of summons, may file a written request by mail with the Commission to change venue. Upon receipt, the Commission shall move the court for the change of venue. The Commission shall upon the filing and completion of the requirements for the "Adjustment of Debts of an Individual with Regular Income", pursuant to Title 11, Chapter 13 of the United States Code, proceed to collect the outstanding balance of the loan guaranteed under this Act. Educational loans guaranteed under this Act shall not be discharged by the filing of the "Adjustment of Debts of an Individual with Regular Income", unless the loan first became due more than 5 years, exclusive of any applicable suspension period, prior to the filing of the petition; or unless excepting the debt from discharge will impose an undue hardship on the debtor and the debtor's dependents. The Commission shall proceed to recover educational loans upon the filing of a petition under "Individual Liquidation", pursuant to Title 11, Chapter 7 of the United States Code, unless the loan first became due more than 5 years, exclusive of any applicable suspension period, prior to the filing of the petition; or unless excepting the debt from discharge will impose an undue hardship on the debtor and the debtor's dependents. Nothing in this Section shall be construed to preclude any forbearance for the benefit of the borrower which may be agreed upon by the party to the guaranteed loan and approved by the Commission, to preclude forbearance by the Commission in the enforcement of the guaranteed obligation after payment on that guarantee, or to require collection of the amount of any loan by the lender or by the Commission from the estate of a deceased borrower or from a borrower found by the lender to have become a person with a total and permanent disability. Nothing in this Section shall be construed to excuse the holder of a loan from exercising reasonable care and diligence in the making and collection of loans under this Act. If the Commission after reasonable notice and opportunity for hearing to a lender finds that it has substantially failed to exercise such care and diligence, the Commission shall disqualify that lender for the guarantee of further loans until the Commission is satisfied that the lender's failure has ceased and finds that there is reasonable assurance that the lender will in the future exercise necessary care and diligence or comply with the rules and regulations of the Commission. (Source: P.A. 99-143, eff. 7-27-15.)