Empowering Students Through Enhanced Financial Counseling Act - (Sec. 2) Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require institutions of higher education (IHEs) to ensure that individuals who receive a Federal Pell Grant or a William D. Ford Federal Direct Loan (other than a Federal Direct consolidation Loan) receive comprehensive counseling regarding the terms and conditions of the Pell Grant or Direct Loan for each year they receive it. (Currently, IHEs are required to provide a first-time student borrower of a Direct Loan with counseling regarding the terms and conditions of such loan prior to, or upon the student's receipt of, such loan.)
Requires that counseling to be provided in a simple and understandable manner: (1) in person, (2) online, or (3) through the use of an online counseling tool maintained by the Secretary of Education. Requires the in person and online counseling sessions to use interactive programs that test the individual's understanding of the terms and conditions of the Pell Grant or Direct Loan.
Includes in the counseling provided to both Pell Grant and Direct Loan recipients:
Requires the annual counseling provided to each student receiving a Pell Grant to include an explanation of:
Requires the annual counseling provided to each student receiving a Direct Loan to include:
Requires the annual counseling provided to a borrower of a Direct PLUS Loan made on behalf of a dependent student to include:
Requires an IHE, prior to making the first disbursement of a Direct Loan to a borrower for an award year, to ensure that the borrower accepts the loan for such award year by: (1) signing the master promissory note for the loan, (2) signing and returning to the IHE a separate written statement that affirmatively states that the borrower accepts the loan, or (3) electronically signing an electronic version of such statement.
(Sec. 3) Requires the exit counseling IHEs provide to student borrowers of loans under the Federal Family Education Loan (FFEL), Direct Loan, and Federal Perkins Loan programs to be conducted through: (1) the use of an interactive program, (2) during an in-person or online session, or (3) through the use of an online counseling tool maintained by the Secretary.
Adds to the information such counseling shall provide:
(Sec. 4) Directs the Secretary to maintain consumer tested online counseling tools that provide recipients of assistance under title IV with the annual counseling and exit counseling this Act requires.
Requires the Secretary to: (1) use each online counseling tool to keep a record of which individuals have received counseling using the tool and notify the applicable IHE of the individual's completion of such counseling; (2) use the online annual counseling tool to notify a borrower who receives annual Direct Loan counseling through such tool regarding when the borrower should accept such loan; and (3) attempt to use the online exit counseling tool to provide exit counseling to a student who leaves an IHE without the prior knowledge of the IHE, provided the IHE provides exit counseling using such tool.
(Sec. 5) Directs the Secretary, acting through the Director of the Institute of Education Sciences, to conduct a rigorous, longitudinal study of the impact and effectiveness of the student loan counseling required under title IV or provided through such other means the Secretary requires.
Requires the study to include borrower information (in the aggregate and disaggregated by race, ethnicity, gender, income, and status as an individual with a disability) on:
Directs the Secretary to evaluate the progress of the study and report any short-term findings to Congress within 18 months of the study's commencement and annually thereafter.
(Sec. 6) Makes $2 million of the amount authorized to be appropriated for maintaining the Department of Education's Financial Awareness Counseling Tool available for carrying out this Act.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4984 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4984
To amend the loan counseling requirements under the Higher Education
Act of 1965, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 26, 2014
Mr. Guthrie (for himself, Mr. Hudson, and Mr. Kline) introduced the
following bill; which was referred to the Committee on Education and
the Workforce
_______________________________________________________________________
A BILL
To amend the loan counseling requirements under the Higher Education
Act of 1965, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Empowering Students Through Enhanced
Financial Counseling Act''.
SEC. 2. ANNUAL COUNSELING.
Section 485(l) of the Higher Education Act of 1965 (20 U.S.C.
1092(l)) is amended--
(1) in the subsection heading, by striking ``Entrance'' and
inserting ``Annual'';
(2) in paragraph (1)--
(A) in the paragraph heading, by striking
``disbursement'' and inserting ``acceptance'';
(B) in subparagraph (A)--
(i) in the matter preceding clause (i)--
(I) by striking ``at or prior to''
and inserting ``prior to or in
conjunction with''; and
(II) by striking ``a disbursement
to a first-time borrower of a loan
made, insured, or guaranteed under part
B (other than a loan made pursuant to
section 428C or a loan made on behalf
of a student pursuant to section 428B)
or'' and inserting ``acceptance (in a
manner described in subparagraph (A),
(B), or (C) of paragraph (4)) by a
borrower of a loan''; and
(ii) in clause (ii)--
(I) in the matter preceding
subclause (I)--
(aa) by striking ``may''
and inserting ``shall''; and
(bb) by inserting ``, for
each award year for which the
borrower receives a loan made
under part D'' after
``provided'';
(II) in subclause (I), by striking
``an entrance counseling session
conduction in person'' and inserting
``a counseling session conducted in
person'';
(III) by striking subclause (II);
(IV) by redesignating subclause
(III) as subclause (II);
(V) in subclause (II), as so
redesignated, by striking the period at
the end and inserting ``; or''; and
(VI) by adding at the end the
following:
``(III) through the use of the
online counseling tool described in
subsection (o)(1)(B).''; and
(C) in subparagraph (B)--
(i) by striking ``The Secretary'' and
inserting ``In the case of institutions not
using the online counseling tool described in
subsection (o)(1)(B), the Secretary'';
(ii) by striking ``encourage institutions''
and inserting ``require such institutions'';
(iii) by inserting ``, during an annual
counseling session that is in-person or
online,'' after ``the use''; and
(iv) by striking ``B or'';
(3) in paragraph (2)--
(A) by redesignating subparagraphs (C) through (G)
and subparagraphs (H) through (K), as subparagraphs (H)
through (L), respectively, and subparagraphs (N)
through (Q), respectively; and
(B) by inserting after subparagraph (B), the
following:
``(C) An explanation that the borrower is not
required to accept the full amount of the loan offered
to the borrower.
``(D) An explanation that the borrower should
consider accepting any grant, scholarship, or State or
Federal work-study jobs for which the borrower is
eligible prior to accepting Federal student loans.
``(E) A recommendation to the borrower to exhaust
the borrower's Federal student loan options prior to
taking out private loans and a warning that private
loans may not offer the same benefits and repayment
options as Federal student loans.
``(F) An explanation of the approved educational
expenses for which the borrower may use a loan made
under part D.
``(G) Information on the annual and aggregate loan
limits for Federal Direct Stafford Loans and Federal
Direct Unsubsidized Stafford Loans.'';
(C) in subparagraph (I), as so redesignated--
(i) by striking ``a loan made under section
428B or 428H,''; and
(ii) by striking ``, or a'' and inserting
``or a'';
(D) in subparagraph (L), as so redesignated--
(i) in the matter preceding clause (i), by
striking ``Sample'' and inserting ``For a
first-time borrower, sample'';
(ii) in clause (i)(I), by striking ``loans
under section 428 or 428H'' and inserting
``Federal Direct Stafford Loans or Federal
Direct Unsubsidized Stafford Loans''; and
(iii) in clause (i)(II), by striking
``loans under section 428, 428B, or 428H'' and
inserting ``Federal Direct PLUS Loans or
Federal Direct Unsubsidized Stafford Loans'';
(E) by inserting after subparagraph (L), as so
redesignated and amended, the following:
``(M) For a borrower with an outstanding balance of
principal or interest due on a loan made under this
title--
``(i) a statement of the amount of such
outstanding balance;
``(ii) based on such outstanding balance,
the anticipated monthly payment amount under
each repayment plan that may be available to
the borrower; and
``(iii) based on such outstanding balance
plus the anticipated outstanding balance on the
loan for which the student is receiving
counseling under this subsection and on any
other Federal student loans that the borrower
may accept during the borrower's course of
study for which the borrower enrolled at the
institution, an estimate of the projected
monthly payment amount under each such
repayment plan.''; and
(F) in subparagraph (Q), as so redesignated--
(i) by striking ``name of and''; and
(ii) by striking ``individual'' and
inserting ``institution's financial aid office
or other appropriate office at the
institution''; and
(4) by adding at the end the following:
``(3) Annual loan acceptance.--Prior to making the first
disbursement of a loan made under part D (other than a Federal
Direct Consolidation Loan or a Federal Direct PLUS loan made on
behalf of a student) to a borrower for an award year, an
eligible institution, shall, as part of carrying out the
counseling requirements of this subsection for the loan, ensure
that the borrower accepts the loan for such award year by--
``(A) signing the master promissory note for the
loan;
``(B) signing and returning to the institution a
separate written statement that affirmatively states
that the borrower accepts the loan; or
``(C) electronically signing an electronic version
of the statement described in subparagraph (B).''.
SEC. 3. EXIT COUNSELING.
Section 485(b) of the Higher Education Act of 1965 (20 U.S.C.
1092(b)) is amended--
(1) in paragraph (1)(A)--
(A) in the matter preceding clause (i)--
(i) by striking ``through financial aid
offices or otherwise'' and inserting ``through
the use of an interactive program, during an
exit counseling session that is in-person or
online, or through the use of the online
counseling tool described in subsection
(o)(1)(A)'';
(ii) by redesignating clauses (i) through
(ix) as clauses (iv) through (xii),
respectively;
(iii) by inserting before clause (iv), as
so redesignated, the following:
``(i) a summary of the outstanding balance
of principal and interest due on the loans made
to the borrower under part B, D, or E;
``(ii) an explanation of the grace period
preceding repayment and the expected date that
the borrower will enter repayment;
``(iii) an explanation that the borrower
has the option to pay any interest that has
accrued while the borrower was in school or
that may accrue during the grace period
preceding repayment or during an authorized
period of deferment or forbearance, prior to
the capitalization of the interest;'';
(iv) in clause (iv), as so redesignated, by
striking ``sample information showing the
average'' and inserting ``information, based on
the borrower's outstanding balance described in
clause (i), showing the borrower's'';
(v) in clause (x), as so redesignated, by
striking ``consolidation loan under section
428C or a''; and
(vi) by adding at the end the following:
``(xiii) for each of the borrower's loans
made under part B, D, or E for which the
borrower is receiving counseling under this
subsection, the contact information for the
loan servicer of the loan and a link to such
servicer's Website.'';
(2) in paragraph (1)(B)--
(A) by inserting ``online or'' before ``in
writing''; and
(B) by adding before the period at the end the
following: ``, except that in the case of an
institution using the online counseling tool described
in subsection (o)(1)(A), the Secretary shall attempt to
provide such information to the student in the manner
described in subsection (o)(3)(C)''; and
(3) in paragraph (2)(C), by inserting ``, such as the
online counseling tool described in subsection (o)(1)(A),''
after ``electronic means''.
SEC. 4. ANNUAL COUNSELING FOR FEDERAL PELL GRANT RECIPIENTS.
Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is
amended by adding at the end the following:
``(n) Annual Counseling for Federal Pell Grant Recipients.--
``(1) Disclosure required prior to disbursement of federal
pell grant.--
``(A) In general.--Each eligible institution shall,
prior to the first payment of a Federal Pell Grant to a
student for an award year, ensure that the student
receives comprehensive information on the terms and
conditions of the Federal Pell Grant in accordance with
paragraph (2). Such information--
``(i) shall be provided in a simple and
understandable manner; and
``(ii) shall be provided, for each award
year for which the student receives a Federal
Pell Grant--
``(I) during a counseling session
conducted in person;
``(II) online, with the student
acknowledging receipt of the
information; or
``(III) through the use of the
online counseling tool described in
subsection (o)(1)(C).
``(B) Use of interactive programs; joint counseling
permitted.--In the case of institutions not using the
online counseling tool described in subsection
(o)(1)(C)--
``(i) the Secretary shall require such
institutions to carry out the requirements of
subparagraph (A) through the use, during an
annual counseling session that is in-person or
online, of interactive programs that test the
student's understanding of the terms and
conditions of the Federal Pell Grant paid to
the student, using simple and understandable
language and clear formatting; and
``(ii) an annual counseling session
described in subclause (I) or (II) of
subparagraph (A)(ii) for a student may be
conducted in conjunction with an annual
counseling session described in subclause (I)
or (II) of subsection (l)(1)(A)(ii) for such
student.
``(2) Information to be provided.--The information to be
provided to the student under paragraph (1)(A) shall include
the following:
``(A) An explanation of a Federal Pell Grant.
``(B) An explanation of approved educational
expenses for which the student may use a Federal Pell
Grant.
``(C) An explanation of why a student may have to
repay the Federal Pell Grant.
``(D) An explanation of the maximum number of
semesters or equivalent for which the student may be
eligible to receive a Federal Pell Grant, and a
statement of the amount of time remaining for which the
student may be eligible to receive a Federal Pell
Grant.
``(E) An explanation of how the student may budget
for typical educational expenses and a sample budget
based on the cost of attendance for the institution.
``(F) An explanation of how the student may seek
additional financial assistance from the institution's
financial aid office due to a change in the student's
financial circumstances, and the contact information
for such office.''.
SEC. 5. ONLINE COUNSELING TOOLS.
Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is
further amended by adding at the end the following:
``(o) Online Counseling Tools.--
``(1) In general.--Beginning not later than 1 year after
the date of enactment of the Empowering Students Through
Enhanced Financial Counseling Act, the Secretary shall
maintain--
``(A) an online counseling tool that provides the
exit counseling required under subsection (b) and meets
the applicable requirements of this subsection;
``(B) an online counseling tool that provides the
annual counseling required under subsection (l) and
meets the applicable requirements of this subsection;
and
``(C) an online counseling tool that provides the
Federal Pell Grant counseling required under subsection
(n) and meets the applicable requirements of this
subsection.
``(2) Requirements of tools.--In maintaining the online
counseling tools described in paragraph (1), the Secretary
shall ensure--
``(A) in the case of the online counseling tools
described in subparagraphs (A) and (B) of paragraph
(1), each such tool is consumer tested to ensure that
the tool is effective in helping students understand
their rights and obligations with respect to borrowing
a loan made under part D;
``(B) in the case of the online tool described in
paragraph (1)(C), the tool is consumer tested to ensure
that such tool is effective in helping students
understand their rights and obligations with respect to
receiving a Federal Pell Grant; and
``(C) each such tool is understandable to students
and freely available to all eligible institutions.
``(3) Record of counseling completion.--The Secretary
shall--
``(A) use each online counseling tool described in
paragraph (1) to keep a record of which students have
received counseling using the tool, and notify the
applicable institutions of the students' completion of
such counseling;
``(B) in the case of a student who receives annual
counseling using the tool described in paragraph
(1)(B), notify the student by when the student should
accept, in a manner described in section 485(l)(3), the
loan for which the student has received such
counseling; and
``(C) in the case of a student described in
subsection (b)(1)(B) at an institution that uses the
online counseling tool described in paragraph (1)(A) of
this subsection, the Secretary shall attempt to provide
the information described in subsection (b)(1)(A) to
the student through such tool.''.
<all>
DEBATE - Pursuant to the provisions of H. Res. 677, the Committee of the Whole proceeded with 10 minutes of debate on the part B Cohen amendment No. 5.
DEBATE - Pursuant to the provisions of H. Res. 677, the Committee of the Whole proceeded with 10 minutes of debate on the Hahn part B amendment No. 6.
DEBATE - Pursuant to the provisions of H. Res. 677, the Committee of the Whole proceeded with 10 minutes of debate on the Peters (MI) part B amendment No. 7.
Mr. Kline moved that the Committee rise.
On motion that the Committee rise Agreed to by voice vote.
Committee of the Whole House on the state of the Union rises leaving H.R. 4984 as unfinished business.
Considered as unfinished business. (consideration: CR H6775-6778)
The House resolved into Committee of the Whole House on the state of the Union for further consideration.
UNFINISHED BUSINESS - The Chair announced that the unfinished business was on the adoption of the Kilmer amendment No. 2, which was debated earlier and on which further proceedings had been postponed.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 4984.
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The previous question was ordered pursuant to the rule. (consideration: CR H6776)
The House adopted the amendment in the nature of a substitute as agreed to by the Committee of the Whole House on the state of the Union. (text of amendment in the nature of a substitute: CR H6761-6763)
Mr. Tierney moved to recommit with instructions to the Committee on Education and the Workforce. (consideration: CR H6776-6777; text: CR H6776)
DEBATE - The House proceeded with 10 minutes of debate on the motion to recommit with instructions. The instructions contained in the motion seek to require the bill to be reported back to the House with an amendment to require that borrowers be informed of the amount of money they would pay if they were able to refinance their loans.
The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H6777)
On motion to recommit with instructions Failed by recorded vote: 193 - 220 (Roll no. 445).
Roll Call #445 (House)Passed/agreed to in House: On passage Passed by recorded vote: 405 - 11 (Roll no. 446).
Roll Call #446 (House)On passage Passed by recorded vote: 405 - 11 (Roll no. 446).
Roll Call #446 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.