Maine Revised Statutes Title 9-A Sec. 16-105 – Disability; discharge of liability
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1. Notification of total and permanent disability. A private education lender, when notified of the total and permanent disability of a borrower or cosigner of a cosigned private education loan, shall release a cosigner from the obligations of the cosigner under the loan. The lender may not attempt to collect a payment from a cosigner following a notification of total and permanent disability of a cosigner or borrower. A private education lender shall, when notified of the total and permanent disability of a borrower, discharge the liability of the borrower and cosigner on the loan.
[PL 2021, c. 357, §2 (NEW).]
Terms Used In Maine Revised Statutes Title 9-A Sec. 16-105
- borrower: means any resident of this State who has received or agreed to pay a private education loan for the borrower's own education expenses. See Maine Revised Statutes Title 9-A Sec. 16-101
- Cosigner: includes an individual whose signature is requested as a condition to grant credit or forbear a collection. See Maine Revised Statutes Title 9-A Sec. 16-101
- Cosigner release: means the release of the obligations of a cosigner on a private education loan. See Maine Revised Statutes Title 9-A Sec. 16-101
- lender: means any person engaged in the business of securing, making or extending private education loans or any holder of a private education loan. See Maine Revised Statutes Title 9-A Sec. 16-101
- Private education loan: means an extension of credit that is extended to a consumer expressly, in whole or in part, for postsecondary education expenses, regardless of whether the loan is provided by the education institution that the student attends, and that is not made, insured or guaranteed under the federal Higher Education Act of 1965, 20 United States Code, Chapter 28, Subchapter IV. See Maine Revised Statutes Title 9-A Sec. 16-101
- Total and permanent disability: means the condition of an individual who:
2. Notification of release. If either a cosigner or a borrower is released from the obligations of a cosigned private education loan under this section, the private education lender shall notify the borrower and cosigner within 30 days of the release.
[PL 2021, c. 357, §2 (NEW).]
3. Legal authority to act on behalf of borrower. A private education lender that extends a cosigned private education loan shall provide the borrower an option to designate an individual to have the legal authority to act on behalf of the borrower with respect to the private education loan in the event of the total and permanent disability of the borrower.
[PL 2021, c. 357, §2 (NEW).]
4. Cosigner release. If a cosigner is released from the obligations of a cosigned private education loan pursuant to subsection 1, the private education lender may not require the borrower to obtain another cosigner on the loan.
[PL 2021, c. 357, §2 (NEW).]
5. Prohibition on default or acceleration of loan. A private education lender may not declare a default or accelerate the debt against a borrower on the sole basis of a cosigner release under subsection 1.
[PL 2021, c. 357, §2 (NEW).]
6. Prohibited activities after notice of disability of borrower. After receiving a notification of a borrower’s total and permanent disability under subsection 1, the private education lender may not:
A. Attempt to collect on the outstanding liability of the borrower or cosigner; or [PL 2021, c. 357, §2 (NEW).]
B. Monitor the disability status of the borrower at any point after the date of discharge of liability. [PL 2021, c. 357, §2 (NEW).]
[PL 2021, c. 357, §2 (NEW).]
SECTION HISTORY
PL 2021, c. 357, §2 (NEW).