Mr. ADLER of New Jersey. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5458) to amend the Truth in Lending Act and the Higher Education Act of 1965 to require additional disclosures and protections for students and cosigners with respect to student loans, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) Short Title.--This Act may be cited as the ``Christopher Bryski Student Loan Protection Act'' and ``Christopher's Law''.
(b) Findings.--The Congress finds the following:
(1) There is no requirement for Federal or private educational lenders to provide information with respect to creating a durable power of attorney for financial decisionmaking in accordance with State law to be used in the event of the death, incapacitation, or disability of the borrower or such cosigner (if any).
(2) No requirement exists for private educational lenders' master promissory notes to include a clear and conspicuous description of the responsibilities of a borrower and cosigner in the event the borrower or cosigner becomes disabled, incapacitated, or dies.
(3) Of the 1,400,000 people who sustain a traumatic brain injury each year in the United States, 50,000 die; 235,000 are hospitalized; and 1,100,000 are treated and released from an emergency department.
(4) It is estimated that the annual incidence of spinal cord injury, not including those who die at the scene of an accident, is approximately 40 cases per 1,000,000 people in the United States or approximately 12,000 new cases each year. Since there have not been any overall incidence studies of spinal cord injuries in the United States since the 1970s, it is not known if incidence has changed in recent years.
(5) In the 2007-2008 academic year, 13 percent of students attending a 4-year public school, and 26.2 percent of students attending a 4-year private school, borrowed monies from private educational lenders.
(6) According to Sallie Mae, in 2009, the number of cosigned private education loans increased from 66 percent to 84 percent of all private education loans.
SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS.
(a) In General.--Section 140 of the Truth in Lending Act (15 U.S.C. 1650) is amended by adding at the end the following new subsection:
``(f) Additional Protections Relating to Death or Disability of Borrower or Cosigner of a Private Education Loan.--
``(1) OBLIGATION TO DISCUSS DURABLE POWER OF ATTORNEYS.--In conjunction with--
``(A) any student loan counseling, if any, provided by a covered educational institution to any new borrower and cosigner (if any) at the time of any loan application, loan origination, or loan consolidation, or at the time the cosigner assumes responsibility for repayment, the institution shall provide information with respect to creating a durable power of attorney for financial decisionmaking, in accordance with State law; and
``(B) any application for a private education loan, the private educational lender involved in such loan shall provide information to the borrower, and cosigner (if any), concerning the creation of a durable power of attorney for financial decisionmaking, in accordance with State law, with respect to such loan.
``(2) CLEAR AND CONSPICUOUS DESCRIPTION OF COSIGNER'
S OBLIGATION.--In the case of any private educational lender who extends a private education loan for which any cosigner is jointly liable, the lender shall clearly and conspicuously describe, in writing, the cosigner's obligations with respect to the loan, including the effect the death, disability, or inability to engage in any substantial gainful activity of the borrower or cosigner (if any) would have on any such obligation, in language that the Board determines would give a reasonable
person a reasonable understanding of the obligation being assumed by becoming a cosigner for the loan.
``(3) MODEL FORMS.--The Board shall publish model forms under section 105 for--
``(A) the information required under paragraph (1) with respect to a durable power of attorney for financial decisionmaking, for each State (and such model forms under this subparagraph shall be uniform for all States to the greatest extent possible); and
``(B) describing a cosigner's obligation for purposes of paragraph (2).
``(4) DEFINITION OF DEATH, DISABILITY, OR INABILITY TO ENGAGE IN ANY SUBSTANTIAL GAINFUL ACTIVITY.--For the purposes of this subsection with respect to a borrower or cosigner, the term `death, disability, or inability to engage in any substantial gainful activity'--
``(A) means any condition described in section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)); and
``(B) shall be interpreted by the Board in such a manner as to conform with the regulations prescribed by such Secretary of Education under section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)) to the fullest extent practicable, including safeguards to prevent fraud and abuse.''.
(b) Definitions.--Subsection (a) of section 140 of the Truth in Lending Act (15 U.S.C. 1650(a)) is amended by adding at the end the following new paragraphs:
``(9) DURABLE POWER OF ATTORNEY.--The term `durable power of attorney'--
``(A) means a written instruction recognized under State law (whether statutory or as recognized by the courts of the State), relating to financial decisionmaking in cases when the individual lacks the capacity to make such decisions; or
``(B) has the meaning given to such term in the Uniform Durable Power of Attorney Act of 2006 and sections 5-501 through 5-505 of the Uniform Probate Code, as in effect in any State.
``(10) COSIGNER.--The term `cosigner'--
``(A) means any individual who is liable for the obligation of another without compensation, regardless of how designated in the contract or instrument;
``(B) includes any person whose signature is requested as condition to grant credit or to forebear on collection; and
``(C) does not include a spouse of an individual referred to in subparagraph (A) whose signature is needed to perfect the security interest in the loan.''.
SEC. 3. FEDERAL STUDENT LOANS.
Section 485(l)(2) of the Higher Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at the end the following:
``(L) Information on the conditions required to discharge the loan due to the death, disability, or inability to engage in any substantial gainful activity of the borrower in accordance with section 437(a), and an explanation that, in the case of a private education loan made through a private educational lender, the borrower, the borrower's estate, and any consigner of a such a private education loan may be obligated to repay the full amount of the loan, regardless of the death or disability
of the borrower or any other condition described in section 437(a).
``(M) The model form for the State in which the institution is located with respect to durable power of attorneys published by the Board of Governors of the Federal Reserve System in accordance with subsection (f)(3)(A) of section 140 of the Truth in Lending Act (15 U.S.C. 1650) and, in the case of a borrower who is not a resident of the State in which the institution is located, information on how to access such model form for the State in which the borrower is a resident.''.
Mr. ADLER of New Jersey. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today to support the passage of H.R. 5458.
Like all of my colleagues, I receive thousands of pieces of mail each week. When a letter from my constituent Ryan Bryski came across my desk, I knew I had to act.
Ryan's brother Christopher, for whom this bill is named, was a young man attending Rutgers University when he suffered a traumatic brain injury after an accidental fall. Christopher was in a vegetative state for 2 years before his passing in 2006. For a parent, that situation would have been enough to endure, but for the Bryski family, their suffering was far more than just the loss of a youngest son.
Like most college students, Christopher had to borrow money to finance an education. He had received loans through both the Federal Government as well as a private lender. Likes most college age kids, Christopher did not have enough credit to receive a private loan on his own, so his father Joseph cosigned his loan.
Federal loans discharge upon the death of a student. However, private loans do not. Since Joseph cosigned Christopher's loan, he was now responsible to pay it back in full. The situation puzzled the Bryski family because nowhere in their loan contract was a clause specifying what would happen to the loan upon the borrower or cosigner's death or disability. Their lender told them that according to the bank, Christopher's persistent vegetative state and subsequent death was a simple inability to
pay, so the financial burden was placed on Joseph.
This was not the only problem the Bryskis encountered after their son's fatal accident. Due to the fact that Christopher was over 18 when he left home to attend school, he was, according to the law, an adult who was able to make his own financial, legal, and health care decisions.
With Christopher in a vegetative state, his parents needed to maintain his financial standing with the school, [Page: H7079]
as well as pay the bills and fulfill all his contracts. The Bryskis spent countless time and money regaining custody of their son so that they could prevent him from defaulting on other bills in case he should recover.
They were not only being responsible parents, but responsible Americans.
The Bryskis also endured a personal interview of Christopher so that the court could be sure Christopher was unable to make decisions on his behalf. Literally, someone from the court came to Christopher's hospital room and yelled in his face to ensure that he would not respond and that he was indeed in a vegetative state.
As a father of four boys, two of whom are in college, I cannot imagine going through what the Bryskis went through. This is why I introduced H.R. 5458, the Christopher Bryski Student Loan Protection Act, or Christopher's Law. This bill would help prevent other families from going through what the Bryskis did by ensuring that private educational lenders clearly describe the obligations of borrowers and cosigners upon their death or disability--what the banks call ``an inability to pay.'' The rest
of us would call it a family tragedy.
Christopher's Law will also urge the Federal Reserve Board to adopt and interpret the same definitions of death and disability as the Department of Education, which has used these definitions for many, many years. This bill does not require that private loans be discharged in case of death or disability. It simply requires private educational lenders to define death and disability so borrowers and their cosigners can refer to these definitions should a catastrophe happen to their family. It also
states that private education lenders as well as the Federal Government must provide information on creating a durable power of attorney to handle the borrower's financial affairs should the borrower be unable to make those decisions on their own. In other words, the borrower and the lender must be on the same page.
Since I introduced this legislation, I have been approached by many other families in my district with similar problems as the Bryskis encountered. I believe this is commonsense, bipartisan legislation that deserves the support of the entire body.
I would like to thank Chairman Miller and Ranking Member Kline, Chairman Frank and Ranking Member Bachus, for bringing this important legislation to the floor, and, frankly, minority staff, for improving this legislation with amendments just in the last few days. It is the way we're supposed to be doing business for the people of our great country. I urge its passage.
I reserve the balance of my time.
Mr. BACHUS. Mr. Speaker, I rise to address this legislation, and I yield myself such time as I may consume.
H.R. 5458 requires private education loan lenders to provide disclosures to students about the benefits of creating a durable power of attorney. For most traditional students, a student loan is the first large financial decision he or she will be making. As such, a student and the cosigner of the loan--often a parent, as with the Bryskis--should be aware of their repayment responsibilities, including those responsibilities if the student should become unable to make payments. And so disclosures,
I think, are always helpful.
In addition to existing disclosures for loans, this bill requires private education loan lenders to provide additional information to students and cosigners about the benefits of durable powers of attorney for financial decision-making. A college's financial aid administrator would also be required to provide information to students and their cosigners about creating a durable power of attorney.
I do have some concerns not addressed to this bill itself but that the Federal Government is nearing the point of requiring so many disclosures that they may overwhelm the consumer. I also fear that the requirement that the Federal Reserve Board create 50 different forms based on various State laws surrounding durable powers of attorney will be especially burdensome to the Board. But that's a minor concern.
While a better solution long term would be to provide two simple disclosures that ensure that the cosigners and the students understand the responsibilities of loan repayment and are provided a place to do their own research about durable powers of attorney, this may be the first time that an individual may have a need for this sort of legal document, and these additional disclosures could help better inform the borrowers and cosigners. So for that reason I do not rise in opposition to this legislation.
I want to extend my prayers and thoughts to the Bryski family and other families who experience such a tragedy as this. I thank the gentleman from New Jersey for his kind words.
I yield back the balance of my time.