Illinois § 5-85

§ 5-85.

Total and permanent disability of borrower or cosigner. (a) For any private education loan issued on or after the effective date of this amendatory Act of the 103rd General Assembly, a servicer, when notified of the total and permanent disability of a borrower or cosigner, shall release the cosigner from the obligations of a cosigner under the private education loan. The servicer may not attempt to collect a payment from a cosigner following a notification of total and permanent disability of the borrower or cosigner. (b) A servicer shall be notified of the total and permanent disability of a borrower and discharge the liability of the borrower and cosigner on the loan. (c) After receiving a notification described in subsection (b) of this Section, the servicer may not: (1) attempt to collect on the outstanding liability of the borrower or cosigner; or (2) monitor the disability status of the borrower at any point after the date of discharge. (d) A servicer shall, within 30 days after the release of either a cosigner or borrower from the obligation of a private education loan pursuant to subsection (a) or (b) of this Section, notify both the borrower and cosigner of the release. (e) A servicer shall, within 30 days after receiving notice of the total and permanent disability of a borrower pursuant to subsection (a) of this Section, provide the borrower with an option to designate an individual to have the legal authority to act on behalf of the borrower. (f) If a cosigner is released from the obligations of a private education loan pursuant to subsection (a) of this Section, the servicer may not require the borrower to obtain another cosigner on the loan obligation. (g) A servicer may not declare a default or accelerate the debt against a borrower on the sole bases of the release of the cosigner from the loan obligation due to total and permanent disability pursuant to subsection (a) of this Section. (Source: P.A. 103-748, eff. 8-2-24.)