Illinois § 5-70

§ 5-70.

Cosigner release rights. (a) A servicer may not impose any restriction that permanently bars a borrower from qualifying for cosigner release, including restricting the number of times a borrower may apply for cosigner release. (b) A servicer may not impose any negative consequences on a borrower or cosigner during the 60 days following the issuance of the notice required pursuant to subsection (c) of Section 5-50 of this Act or until the servicer makes a final determination about a borrower's cosigner release application, whichever occurs later. As used in this subsection (b), "negative consequences" includes the imposition of additional eligibility criteria, negative credit reporting, lost eligibility or cosigner release, late fees, interest capitalization, or other financial injury. (c) For any private education loan issued on or after August 2, 2024 (the effective date of Public Act 103-748), a servicer may not require proof of more than 12 consecutive, on-time payments as part of the criteria for cosigner release. A borrower who has paid the equivalent of 12 months of principal and interest payments within any 12-month period is deemed to have satisfied the consecutive, on-time payment requirement even if the borrower has not made payments monthly during the 12-month period. If a borrower or cosigner requests a change in terms that restarts the count of consecutive, on-time payments required for cosigner release, the servicer shall notify the borrower and cosigner in writing of the impact of the change and provide the borrower and cosigner with the right to withdraw or reverse the request to avoid the impact. (d) A borrower may request an appeal of a servicer's determination to deny a request for cosigner release, and the servicer shall permit the borrower to submit additional documentation evidencing the borrower's ability, willingness, and stability to meet the payment obligations. The borrower may request that another employee of the servicer review the cosigner release determination. (e) A servicer shall establish and maintain a comprehensive record management system reasonably designed to ensure the accuracy, integrity, and completeness of information about cosigner release applications and to ensure compliance with applicable State and federal laws. The system must include the number of cosigner release applications received, the approval and denial rate, and the primary reasons for any denial. (Source: P.A. 103-748, eff. 8-2-24; 104-417, eff. 8-15-25.)