Manatt Special Counsel Jonathan Joshua, Partner Bryan Schneider and Associate Madelaine Newcomb co-authored an article for Law360 on the Know Before You Owe Private Education Loan Act, which was signed into law on August 26 and is expected to pose significant compliance challenges for institutions of higher education that offer instruction to Illinois residents, student lenders and providers of income share agreements, or ISAs.
The authors noted that while the Act admirably “aims to provide potential student borrowers with critical information, allowing them to make informed decisions about how to responsibly finance their education,” it requires institutions of higher education to share detailed student information with private educational lenders and ISA providers before any funds may be distributed. “The immediate effective date of the Act, coupled with the current lack of any established reporting mechanism, means that private student loan providers may be both unable to obtain timely certification and unable to comply with the reporting requirements, and some private student lenders may choose not to disburse students' loans rather than risk violating the Act,” the authors wrote. “Until these matters are resolved, students may find themselves unexpectedly unable to finance their educations.”
Law360 subscribers can read the full article here.