Conn. Gen. Stat. § 36a-850a: Required activities of a person servicing a private student education loan. Options for cosigner release required. Prohibitions re making, extending or owning private student education loan. Limitations to applicability.

(a) Any person servicing a private student education loan, including, but not limited to, a private student education loan servicer, private education lender and private education loan creditor, shall:

(1) Prior to sending the first billing statement on a private student education loan or immediately upon receipt of a private student education loan following the transfer or assignment of such private student education loan, provide to the student loan borrower, and to any cosigner of such private student education loan, information concerning the rights and responsibilities of such student loan borrower and cosigner, including information regarding (A) how such private student education loan obligation will appear on the cosigner's consumer report, (B) how the cosigner will be notified if the private student education loan becomes delinquent, including how the cosigner can cure the delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility, and (C) eligibility for release of the cosigner's obligation on such private student education loan, including number of on-time payments and any other criteria required to approve the release of the cosigner from the loan obligation;

(2) Send annual written notice to all student loan borrowers and cosigners relating to information about cosigner release, including the criteria necessary to approve the release of a cosigner from a private student education loan obligation and the process for applying for cosigner release;

(3) Upon satisfaction by the student loan borrower of the applicable consecutive on-time payment requirement for purposes of cosigner release eligibility, send, in writing, to such student loan borrower and cosigner (A) a notification that such consecutive on-time payment requirement has been satisfied and that such cosigner may be eligible for cosigner release, and (B) information relating to the procedure for applying for cosigner release and any additional criteria that a cosigner must satisfy in order to be eligible for cosigner release. Such notification and information shall be sent by either United States mail or electronic mail, provided such student loan borrower has elected to receive electronic communications from the person servicing the private student education loan;

(4) In the event that an application for a cosigner release is incomplete, provide, in writing, (A) notice to the student loan borrower and cosigner that such application is incomplete, and (B) a description of the information that is missing or the additional information that is needed to consider the application complete and the date by which the borrower or cosigner are required to provide such information;

(5) Not later than thirty days following the submission of an application for cosigner release, send to the student loan borrower and cosigner a written notice of the decision that such application has been approved or denied. If the application for cosigner release has been denied, such written notice shall (A) inform such student loan borrower and cosigner that such student loan borrower and cosigner have the right to request all documents and information used in the decision to deny such application, including any credit score threshold used, the consumer report of such student loan borrower or cosigner, the credit score of such student loan borrower or cosigner and any other documents that are relevant or specific to such student loan borrower or cosigner, and (B) include (i) any adverse action notices required under federal law if the denial of such application was based in whole or in part on any information contained in a consumer report, and (ii) the information described in subdivision (2) of this subsection;

(6) Upon receipt of a request by a student loan borrower or cosigner to a change that results in restarting the count of consecutive on-time payments required for cosigner release eligibility, provide to such student loan borrower and cosigner written notification of the impact of such change on cosigner release eligibility and an opportunity to withdraw or reverse such change for purposes of avoiding such impact;

(7) Provide a student loan borrower or cosigner (A) the right to request an appeal of a determination to deny a cosigner release application, (B) an opportunity to submit additional information or documentation evidencing that such student loan borrower has the ability, willingness and stability to make his or her payment obligations, and (C) the right to request that a different employee review and make a determination on the application for a cosigner release;

(8) Establish and maintain a comprehensive record management system reasonably designed to ensure the accuracy, integrity and completeness of data and other information about cosigner release applications. Such system shall include the number of cosigner release applications received, the approval and denial rate of such applications and the primary reasons for denial of such applications;

(9) Provide the cosigner of a private student education loan with access to the same documents and records associated with the private student education loan that are available to the student loan borrower of such private student education loan; and

(10) If a student loan borrower has electronic access to documents and records associated with a private student education loan, provide equivalent electronic access to such documents and records to the cosigner of such private student education loan.

(b) Any person that makes or extends a private student education loan on or after October 1, 2025, shall provide, consistent with the terms of this subsection, options for cosigner release on such private student education loan upon the satisfaction of certain criteria, including, but not limited to, twelve consecutive on-time payments by the student loan borrower or in the event of total and permanent disability of the cosigner. On and after October 1, 2025, no person that makes, extends or owns one or more private student education loans, including, but not limited to, any private education lender or private education loan creditor, directly or indirectly, shall:

(1) Impose any restriction on a student loan borrower or cosigner that may permanently prevent such student loan borrower or cosigner from qualifying for a cosigner release, including, but not limited to, any restriction on the number of times a student loan borrower or cosigner may apply for a cosigner release;

(2) Impose any negative consequence on a student loan borrower or cosigner during the sixty-day period following issuance of the notice described in subparagraph (A) of subdivision (4) of subsection (a) of this section, or until a final decision concerning a student loan borrower or cosigner's application for a cosigner release has been made. For purposes of this subdivision, “negative consequence” includes, but is not limited to, the imposition of any additional eligibility criteria, negative credit reporting, lost eligibility for a cosigner release, late fee, interest capitalization or any other financial penalty or injury;

(3) Require a student loan borrower to make more than twelve consecutive on-time payments as part of the eligibility criteria for a cosigner release. A private student education loan servicer shall consider any student loan borrower who has paid the equivalent of twelve months of principal and interest during any twelve-month period to have satisfied the consecutive on-time payment requirement, even if such student loan borrower has not made monthly payments during such twelve-month period; or

(4) In the event that a cosigner is totally and permanently disabled, as determined by any federal or state agency or doctor of medicine or osteopathy legally authorized to practice in this state, (A) refuse to release the cosigner from his or her obligation to repay the private student education loan upon receipt of notification that such cosigner is totally and permanently disabled, or (B) require that a new cosigner be added to such private student education loan after the original cosigner has been released.

(c) The provisions of subsections (a) and (b) of this section shall not apply to the following persons: (1) Any bank, out-of-state bank that has a physical presence in the state, Connecticut credit union, federal credit union or out-of-state credit union; (2) any wholly owned subsidiary of any such bank or credit union; (3) any operating subsidiary where each owner of such operating subsidiary is wholly owned by the same bank or credit union; and (4) the Connecticut Higher Education Supplemental Loan Authority.