IL HB5361

Creates the Know Before You Owe Private Education Loan Act, requiring private educational lenders to obtain certification from institutions of higher education before disbursing private student loans, including verification of enrollment status, cost of attendance, and the gap between costs and estimated financial assistance

Defines income share agreements (where borrowers commit to pay a percentage of future income in exchange for education funding) as loans subject to the same regulations as private education loans

Allows lenders to disburse funds without certification if the institution fails to respond within 15 business days, but requires lenders to report such disbursements to the Student Loan Ombudsman and notify the institution in writing

Requires private educational lenders to send quarterly loan statements to enrolled borrowers showing total remaining debt, accrued interest, debt increases, and current interest rates, and to submit annual reports to the Department of Financial and Professional Regulation

Mandates institutions of higher education inform borrowers whether they have exhausted federal financial aid options and disclose the advantages of federal loans, including income-driven repayment, loan forgiveness programs, and the 3-day right to cancel period