Illinois SB 3106: PRIVATE EDUCATION LOANS-REPORT

Bill Text

Full Text of SB3106 

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 Illinois General Assembly

 ILGA.GOV 

 SB3106 - 104th General Assembly 

104TH GENERAL ASSEMBLY 
State of Illinois 
2025 and 2026
SB3106

Introduced 1/29/2026, by Sen. Michael W. Halpin 

SYNOPSIS AS INTRODUCED:

110 ILCS 983/5

110 ILCS 983/10

 Amends the Know Before You Owe Private Education Loan Act. Provides that the annual report to the Department of Financial and Professional Regulation and the Student Loan Ombudsman shall include the total number and dollar amount (instead of the volume) of private education loans made annually by a private educational lender, the total number and dollar amount (instead of the volume) of private education loans made annually at institutions of higher education, the total number and dollar amount of private education loans made annually with a cosigner, and the default rate for the private education loans reported by the private educational lender pursuant to specified provisions for the previous reporting period. Effective immediately.

LRB104 17947 LNS 31384 b

A BILL FOR

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1 AN ACT concerning education.

2 Be it enacted by the People of the State of Illinois, 

3represented in the General Assembly:

4 Section 5. The Know Before You Owe Private Education Loan 

5Act is amended by changing Sections 5 and 10 as follows:

6 (110 ILCS 983/5)

7 Sec. 5. Definitions. As used in this Act:

8 "Annual percentage rate" means the percentage rate 

9calculated according to the Federal Reserve Board's 

10methodology as set forth under Regulation Z, 12 CFR Part 1026.

11 "Cosigner" means any individual who is liable for the 

12obligation of another without compensation, regardless of how 

13the individual is designated in the contract or instrument 

14with respect to that obligation, including an obligation under 

15a private education loan extended to consolidate a borrower's 

16preexisting student loans. The term includes any individual 

17whose signature is requested, as a condition, to grant credit 

18or to forbear on collection. The term does not include a spouse 

19of an individual if the spouse's signature is needed solely to 

20perfect the security interest in a loan. 

21 "Default amount" means the loan amount of each outstanding 

22loan at the time the loan is declared in default.

23 "Default rate" means the default amount required to be 

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1reported during a reporting period divided by the loan amount 

2of all outstanding loans required to be reported at the 

3beginning of the reporting period. 

4 "Educational expense" means any expense, in whole or in 

5part, expressly used to finance postsecondary education, 

6regardless of whether the debt incurred by a student to pay 

7that expense is owed to the provider of postsecondary 

8education whose school, program, or facility the student 

9attends. 

10 "Income share agreement" means an agreement under which a 

11borrower commits to pay a percentage of his or her future 

12income in exchange for money, payments, or credits applied to 

13or on behalf of a borrower. An income share agreement 

14constitutes a loan and debt within the meaning of this Act.

15 "Income share agreement provider" means:

16 (1) a person that provides money, payments, or credits 

17 to or on behalf of a borrower pursuant to the terms of an 

18 income share agreement; or

19 (2) any other person engaged in the business of 

20 soliciting, making, funding, or extending income share 

21 agreements.

22 "Institution of higher education" includes, but is not 

23limited to, institutions falling under the Private Business 

24and Vocational Schools Act of 2012, the Private College Act, 

25and public institutions of higher education as defined in 

26Section 1 of the Board of Higher Education Act. "Institution 

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1of higher education" also includes a person engaged in the 

2business of providing postsecondary education, via 

3correspondence, online, or in this State, to a person located 

4in this State, regardless of whether the person has obtained 

5authorization from the Illinois Board of Higher Education to 

6operate in this State or is accredited.

7 "Loan amount" means the total outstanding balance on each 

8loan owed by a borrower to a lender at any given time. 

9 "Private educational lender" and "private education loan" 

10have the meanings ascribed to the terms in Section 140 of the 

11Truth in Lending Act (15 U.S.C. 1650). In addition, "private 

12educational lender" includes an income share agreement 

13provider and a student financing company and "private 

14education loan" includes an income share agreement and student 

15financing.

16 "Student financing company" means a person engaged in the 

17business of securing, making, or extending student financing. 

18"Student financing company" does not include the following 

19persons, only