Student Loan Default Prevention Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require the Secretary of Education, upon the request of an eligible guaranty agency, to enter into or revise a voluntary, flexible agreement with that agency to provide services to borrowers and potential borrowers of Federal Family Education Loans (FFELs) or Direct Loans (DLs).
Treats guaranty agencies as eligible to participate in such agreements if they have extensive and relevant experience and demonstrated effectiveness in providing such services.
Authorizes those guaranty agencies to provide services that include: (1) delinquency prevention and default aversion activities, (2) collecting defaulted loans, (3) monitoring institutions that participate in the DL program, (4) training financial aid officials, and (5) informational outreach to schools and students that supports access to higher education and financial literacy.
Requires the Secretary to pay fees to such agencies that are cost neutral and take into account the savings projected from the provision of such services.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 618 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 618
To authorize the Secretary of Education to enter into voluntary,
flexible agreements with certain guarantee agencies to provide
delinquency prevention and default aversion services for borrowers and
potential borrowers of Federal Direct Loans under the Higher Education
Act of 1965, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 12, 2013
Mr. Michaud (for himself, Mr. Price of North Carolina, Ms. Bordallo,
and Ms. Pingree of Maine) introduced the following bill; which was
referred to the Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To authorize the Secretary of Education to enter into voluntary,
flexible agreements with certain guarantee agencies to provide
delinquency prevention and default aversion services for borrowers and
potential borrowers of Federal Direct Loans 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 ``Student Loan Default Prevention
Act''.
SEC. 2. VOLUNTARY, FLEXIBLE AGREEMENTS.
(a) In General.--Section 428A of the Higher Education Act of 1965
(20 U.S.C. 1078-1) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c), the following:
``(d) Supplemental Student Loan Services.--
``(1) In general.--Not later than 9 months after the date
of enactment of the Student Loan Default Prevention Act and
notwithstanding any other provision of this part, the Secretary
shall, upon the request of an eligible guarantee agency, enter
into a voluntary, flexible agreement with the guarantee agency,
or revise the voluntary, flexible agreement previously entered
into with the guarantee agency under this section, to provide
for the services described in paragraph (3) for borrowers
(including potential borrowers, if applicable) of loans made
under this part or part D.
``(2) Eligibility.--For the purposes of this subsection, an
eligible guarantee agency is a guarantee agency that has
extensive and relevant experience and demonstrated
effectiveness in providing the services described in paragraph
(3).
``(3) Services.--
``(A) In general.--The services described in this
paragraph for borrowers (including potential borrowers,
if applicable) of loans made under this part or part D
may include--
``(i) delinquency prevention and default
aversion activities;
``(ii) collection of defaulted loans;
``(iii) monitoring of institutions
participating in the program under part D;
``(iv) training of financial aid officials;
and
``(v) informational outreach to schools and
students in support of access to higher
education and financial literacy.
``(B) Existing local services.--In carrying out the
services described in subparagraph (A), an eligible
guarantee agency shall provide localized services
directly or through partnerships with other eligible
guarantee agencies to assist borrowers and institutions
of higher education.
``(4) Reasonable fees.--An agreement entered into or
revised under this subsection shall include a provision
regarding the fees that the Secretary shall pay to an eligible
guarantee agency for carrying out services under the agreement.
The determination of such fees shall be cost neutral and take
into account savings resulting from the provision of such
services as reasonably projected by the Secretary.
``(5) Public notice.--The Secretary shall publish in the
Federal Register a notice to all guarantee agencies that sets
forth--
``(A) an invitation for the guarantee agencies to
enter into or revise agreements under this subsection;
and
``(B) the criteria that the Secretary will use for
selecting the guarantee agencies with which the
Secretary will enter into, or revise, agreements under
this subsection.
``(6) Agreement notice.--The Secretary shall notify the
members of the authorizing committees not later than 30 days
prior to concluding an agreement under this subsection.
``(7) Public availability.--The text of any voluntary
flexible agreements entered into or revised under this
subsection shall be readily available to the public.''.
(b) Conforming Amendment.--Section 456 of the Higher Education Act
of 1965 (20 U.S.C. 1087f) is amended by inserting ``or section
428A(d)'' after ``sections 428(b)) and (c)''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and the Workforce.
Referred to the Subcommittee on Higher Education and Workforce Training.
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