HF 320

as introduced - 89th Legislature (2015 - 2016) Posted on 04/13/2015 04:28pm

A bill for an act
relating to higher education; requiring student loan originators to provide certain
disclosures; proposing coding for new law in Minnesota Statutes, chapter 135A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [135A.27] PRIVATE STUDENT LOANS; DISCLOSURES REQUIRED.
new text end

new text begin Subdivision 1. new text end

new text begin Disclosure statement required. new text end

new text begin In addition to any disclosures
that may be required by federal law, a private lender offering student loan products to
borrowers in this state may not issue a loan to a student borrower unless, prior to the
borrower becoming liable for the amount of the loan, the lender has provided a disclosure
statement meeting the requirements of this section. The disclosure statement must be
provided in writing, in a format designed to be easy to read and understand, and its receipt
must be acknowledged by the borrower by signature. The disclosure statement must, at a
minimum, include the following:
new text end

new text begin (1) a listing of the schedules that the borrower may use to repay the loan, including
an estimate of the monthly payments for each schedule based on the amount of the loan;
new text end

new text begin (2) the interest rate of the loan, and whether the rate is fixed or variable;
new text end

new text begin (3) the total amount of interest that would be paid, over the life of the loan, for
each repayment schedule;
new text end

new text begin (4) the procedure for modifying a repayment schedule if, after entering repayment,
the borrower seeks lower monthly payments; and
new text end

new text begin (5) example calculations of the repayment costs of the loan, as a percentage of
potential salaries that might be reasonably expected upon graduation.
new text end

new text begin Subd. 2. new text end

new text begin Enforcement. new text end

new text begin Compliance with this section may be enforced by the
attorney general, as provided in section 8.31.
new text end