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Illinois Attorney General Kwame Raoul
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July 21, 2022

ATTORNEY GENERAL RAOUL ANNOUNCES ANNUAL REPORTING INFORMATION FOR THE KNOW BEFORE YOU OWE PRIVATE EDUCATION LOAN ACT

Chicago  — Attorney General Raoul today announced the release of informational guides and reporting templates that provide instructions to private education lenders to help them comply with the reporting requirements of the Know Before You Owe Private Education Loan Act (Know Before You Owe).

Signed into law on Aug. 26, 2021, Know Before You Owe provides potential student loan borrowers with critical information about their eligibility for federal financial assistance before those potential borrowers take out a private education loan at an institution of higher education. Raoul initiated Know Before You Owe to give student borrowers access to information that will help them avoid expensive private student loans that offer fewer borrower protections, less flexible repayment options and generally cost more than federal student loans.

“Federal student loans give borrowers stronger protections, more flexibility in general, and the relief that comes with federal loans – as we saw during the pandemic – is critical to assisting borrowers during periods of economic uncertainty,” Raoul said. “Know Before You Owe ensures that students and families are informed of their rights and their federal loan eligibility before taking out expensive private loans.”

In addition to providing information for potential student loan borrowers, Know Before You Owe addresses the lack of publicly-available data about private student loans. In particular, the act requires lenders who issue private student loans to report certain information about their lending activities annually to the Student Loan Ombudsman, a position housed within the Attorney General’s office.

The reporting deadline for lenders is Nov. 1, 2022. Private education lenders can access the guides and reporting templates here:

https://illinoisattorneygeneral.gov/consumers/student_lending.html

Annual Reporting Information Guide

Annual Reporting Spreadsheet

Annual Statement Information Guide

Annual Statement Spreadsheet

Know Before You Owe also requires private lenders to obtain certification from schools, confirming whether borrowers have expenses that have not been covered by other sources. Additionally, schools’ financial aid offices must notify borrowers if they still have federal student loan aid eligibility. Schools also are required to certify annually with the Illinois Board of Higher Education that they are in compliance with the law.

The pandemic has highlighted the importance of the many borrower protections federal loans afford. Federal loan borrowers can qualify to have their loans forgiven under the Public Service Loan Forgiveness program and receive more protections against predatory actions by their institutions or lenders through programs like Borrower Defense to Repayment. Just this year, for instance, the Department of Education granted the discharge of all federal loans borrowers took out to attend Corinthian Colleges, including over $220 million in loans discharged for over 26,000 Illinois borrowers – something Attorney General Raoul called on the federal government to do. Attorney General Raoul encourages all potential borrowers to take out federal loans prior to taking any private loans. Repayment of federal student loans is set to restart after Aug. 31, 2022 after more than a two-year pause due to the pandemic.

The Illinois Attorney General’s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education and student loan field. Since entering office, Attorney General Raoul has secured over $160 million in relief for Illinois borrowers who were deceived by their schools, private lenders or servicers. Earlier this year, Raoul’s office announced a $1.85 billion national settlement with Navient, formerly the nation’s second largest student loan servicer.

Student borrowers who have questions or need assistance can call the Attorney General’s Student Loan Helpline at 1-800-455-2456.

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