5 ILCS 385/ Educational Loan Default Act.

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5 ILCS 385/0.01

(5 ILCS 385/0.01) (from Ch. 127, par. 3550)

Sec. 0.01.

Short title.

This Act may be cited as the

Educational Loan Default Act.

(Source: P.A. 86-1324.)

5 ILCS 385/1

(5 ILCS 385/1) (from Ch. 127, par. 3551)

Sec. 1.

Definitions.

As used in this Act, unless the context otherwise requires:

(a) "Educational loan" means any loan guaranteed by the State
Scholarship Commission under the Higher Education Student Assistance Law,
any education loan made by an institution of higher education from the
proceeds of a loan to the institution by the Illinois Independent Higher
Education Loan Authority under the Illinois Independent Higher Education
Loan Authority Act, or any other loan from public funds
made for the purpose of financing an individual's attendance at an
institution of higher education.

(b) "State agency" means any officer, board, commission or agency
created by the Constitution, whether in the executive, legislative or
judicial branch, but other than the circuit court; any officer,
department, board, commission, agency, institution, authority,
university, body politic or corporate of the State; any administrative
unit or corporate outgrowth of the State government which is created by
or pursuant to statute, other than units of local government and their
officers, school districts and boards of election commissioners; or any
administrative unit or corporate outgrowth of the above or as may be
created by executive order of the Governor.

(Source: P.A. 85-827.)

5 ILCS 385/2

(5 ILCS 385/2) (from Ch. 127, par. 3552)

Sec. 2.

(a) Any employee of a State agency who is in default on the
repayment of any educational loan for a period of 6 months or more and in
an amount of $600 or more shall, as a condition of employment, make a
satisfactory loan repayment arrangement with the maker or guarantor of the loan.

(b) As of the effective date of this Act, any employment application
forms used by any State agency shall include a statement to be signed by
the applicant concerning whether the applicant is in default as provided in this Section.

(c) Any employee who is in default on an educational loan shall make a
satisfactory loan repayment arrangement with the maker or guarantor of the
loan prior to the completion of the sixth month of employment or within 6
months from the effective date of this Act, whichever is later.  The State
agency shall confirm the establishment of a satisfactory repayment
arrangement by obtaining a written certification from the maker or
guarantor of the loan.  The State agency shall inform the employee of the
opportunity to establish a repayment plan through payroll deductions in
accordance with the State Salary and Annuity Withholding Act.

(d) Should an employee fail to establish a satisfactory repayment
arrangement prior to the completion of the sixth month of employment, the
State agency shall terminate the individual's employment.

(e) The maker or guarantor of the loan shall determine what constitutes
a satisfactory repayment arrangement; however, no maker or guarantor
shall require an employee to pay more than 20% of his or her gross monthly
income unless federal law requires a larger payment on the educational loan.

(Source: P.A. 85-827.)

5 ILCS 385/3

(5 ILCS 385/3) (from Ch. 127, par. 3553)

Sec. 3.

No State agency shall contract with an individual for goods
or services if that individual is in default, as defined in Section 2 of
this Act, on an educational loan.  Any contract used by any State agency
shall include a statement certifying that the individual is not in default
on an educational loan as provided in this Section.

(Source: P.A. 85-827.)