Letter of Estimated Annual Debt for Students Act of 2017 or the LEADS Act of 2017
This bill amends title IV (Student Assistance) of the Higher Education Act of 1965 to require an institution of higher education that participates in federal student aid programs to provide an annual estimate of borrowing costs to each enrolled student who receives an education loan. The cost estimate must include the student's cumulative education loan balance, projected monthly payment amount, and interest rate on each loan.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1429 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 1429
To amend the Higher Education Act of 1965 to require institutions of
higher education to provide students with annual estimates of student
loan borrowing costs.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 8, 2017
Mr. Messer (for himself, Ms. Stefanik, Mr. Carson of Indiana, Mrs.
Brooks of Indiana, Mr. Bucshon, Mr. Rokita, and Ms. McSally) introduced
the following bill; which was referred to the Committee on Education
and the Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to require institutions of
higher education to provide students with annual estimates of student
loan borrowing costs.
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 ``Letter of Estimated Annual Debt for
Students Act of 2017'' or the ``LEADS Act of 2017''.
SEC. 2. ANNUAL ESTIMATE OF STUDENT LOAN BORROWING COSTS.
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 Estimate of Student Loan Borrowing Costs.--
``(1) In general.--Beginning on July 1, 2019, each eligible
institution shall provide a cost estimate described in
paragraph (2) to each enrolled student who receives an
education loan to attend the institution, not later than 30
days before the first day of each academic year beginning after
the academic year for which the student first received such a
loan to attend such institution.
``(2) Contents of estimate.--The estimate under paragraph
(1) shall contain the following information:
``(A) Cumulative balances and monthly payments.--A
notice to the student of--
``(i) the cumulative balance of education
loans owed by the student as of the date of the
notice; and
``(ii) projected monthly payment amounts
based on the cumulative balances described in
clause (i), assuming a standard repayment
schedule.
``(B) Interest rates.--The interest rate of each
education loan, except that interest rates for a
private education loan may be based on average private
education loan interest rates if the institution cannot
reasonably determine the actual interest rate of such
loan.
``(C) Disclaimer.--A clear and conspicuous notice
stating that any information provided under paragraph
(1) is an estimate, accurate to the best of the
institution's knowledge, and that an interest rate
provided under subparagraph (B)--
``(i) in the case of a loan described in
paragraph (6)(A)(i), is the applicable rate of
interest of such loan;
``(ii) in the case of a private education
loan, may be based on average private education
loan interest rates; and
``(iii) does not include private education
loans of which the institution is not aware.
``(3) Form of estimate.--The estimate under paragraph (1)
shall be--
``(A) provided to the student in hard copy format
on the letterhead of the institution, by electronic
mail or by another method the Secretary may prescribe;
and
``(B) delivered to the student separately from any
other disclosures required under this Act.
``(4) Limitation of liability.--An institution that
provides the estimate under paragraph (1) in good faith shall
not be liable to any person for inaccuracies contained in such
estimate.
``(5) Student debt letter template.--Not later than July 1,
2018, and as necessary thereafter, the Secretary shall provide
the following to eligible institutions:
``(A) Examples of estimates required under
paragraph (2).
``(B) Technical assistance on how to comply with
the requirements of this subsection.
``(C) Preliminary approvals in a timely manner of
estimate formats proposed for use by an institution, at
the request of the institution.
``(D) The formula (which shall take into
consideration a student's past borrowing rates and
other criteria the Secretary may determine) to be used
in making the projections under clauses (iii) and (iv)
of paragraph (2)(A) with respect to loans described in
paragraph (6)(A)(i).
``(E) Encryption technology software to enable
institutions to provide the estimate under paragraph
(2) to students in a secure format for institutions
that choose to provide the estimate to students in an
electronic format.
``(6) Definitions.--In this subsection:
``(A) Education loan.--The term `education loan'
means--
``(i) 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);
``(ii) a loan made under a State-sponsored
loan program for the purpose of paying a
student's cost of attendance at an institution
of higher education; and
``(iii) a private education loan with
respect to which the institution should
reasonably be aware.
``(B) Private education loan.--The term `private
education loan' has the meaning given the term in
section 140 of the Truth in Lending Act.
``(C) Student.--The term `student', when used with
respect to an eligible institution, does not include
any student who has transferred to the institution more
than 60 days before the first day of the academic year
involved.''.
SEC. 3. ANNUAL PROVISION OF INFORMATION BY THE SECRETARY OF EDUCATION.
Not later than April 1, 2019, and annually thereafter, the
Secretary of Education shall provide to institutions of higher
education (as defined in section 102 of the Higher Education Act of
1965 (20 U.S.C. 1002)) the following information:
(1) The amount of any loans made under part D of title IV
of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.)
(other than a Federal Direct Consolidation Loan or a Federal
Direct PLUS loan made on behalf of a student) expected to be
disbursed to any borrower for the next academic year.
(2) The projected cumulative balance of such loans, as
determined in accordance with section 485(n)(5)(D) of such Act
(20 U.S.C. 1092(n)(5)(D)), as added by this Act, that will be
owed by any borrower after the completion of the borrower's
course of study at an institution of higher education.
(3) The projected monthly payment amounts of such loans, as
determined in accordance with section 485(n)(5) of the Higher
Education Act of 1965 (20 U.S.C. 1092(n)(5)), assuming a
standard repayment schedule (as described in section
455(d)(1)(A) of such Act (20 U.S.C. 1087e(d)(1)(A))).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and the Workforce.
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