I 

112TH CONGRESS 

1ST SESSION H. R. 3624 

To authorize the Secretary of Education to enter into voluntary, flexible 

agreements with certain guaranty 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 

DECEMBER 8, 2011 

Mr. MICHAUD 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 guaranty 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Loan Default 

5 Prevention Act’’. 


smartinez on DSK6TPTVN1PROD with BILLS
2 

•HR 3624 IH

1 SEC. 2. VOLUNTARY, FLEXIBLE AGREEMENTS. 

2 (a) IN GENERAL.—Section 428A of the Higher Edu3 cation Act of 1965 (20 U.S.C. 1078–1) is amended— 

4 (1) by redesignating subsection (d) as sub5 section (e); and 

6 (2) by inserting after subsection (c), the fol7 lowing: 

8 ‘‘(d) SUPPLEMENTAL STUDENT LOAN SERVICES.— 

9 ‘‘(1) IN GENERAL.—Not later than 9 months 

10 after the date of enactment of the Student Loan De11 fault Prevention Act and notwithstanding any other 

12 provision of this part, the Secretary shall, upon the 

13 request of an eligible guaranty agency, enter into a 

14 voluntary, flexible agreement with the guarantee 

15 agency, or revise the voluntary, flexible agreement 

16 previously entered into with the guarantee agency 

17 under this section, to provide for the services de18 scribed in paragraph (3) for borrowers (including 

19 potential borrowers, if applicable) of loans made 

20 under this part or part D. 

21 ‘‘(2) ELIGIBILITY.—For the purposes of this 

22 subsection, an eligible guaranty agency is a guaranty 

23 agency that has extensive and relevant experience 

24 and demonstrated effectiveness in providing the 

25 services described in paragraph (3). 

26 ‘‘(3) SERVICES.— 


smartinez on DSK6TPTVN1PROD with BILLS
3 

•HR 3624 IH

1 ‘‘(A) IN GENERAL.—The services described 

2 in this paragraph for borrowers (including po3 tential borrowers, if applicable) of loans made 

4 under this part or part D may include— 

5 ‘‘(i) delinquency prevention and de6 fault aversion activities; 

7 ‘‘(ii) collection of defaulted loans; 

8 ‘‘(iii) monitoring of institutions par9 ticipating in the program under part D; 

10 ‘‘(iv) training of financial aid officials; 

11 and 

12 ‘‘(v) informational outreach to schools 

13 and students in support of access to higher 

14 education and financial literacy. 

15 ‘‘(B) EXISTING LOCAL SERVICES.—In car16 rying out the services described in subpara17 graph (A), an eligible guarantee agency shall 

18 provide localized services directly or through 

19 partnerships with other eligible guarantee agen20 cies to assist borrowers and institutions of high21 er education. 

22 ‘‘(4) REASONABLE FEES.—An agreement en23 tered into or revised under this subsection shall in24 clude a provision regarding the fees that the Sec25 retary shall pay to an eligible guarantee agency for 


smartinez on DSK6TPTVN1PROD with BILLS
4 

•HR 3624 IH

1 carrying out services under the agreement. The de2 termination of such fees shall be cost neutral and 

3 take into account savings resulting from the provi4 sion of such services as reasonably projected by the 

5 Secretary. 

6 ‘‘(5) PUBLIC NOTICE.—The Secretary shall 

7 publish in the Federal Register a notice to all guar8 anty agencies that sets forth— 

9 ‘‘(A) an invitation for the guaranty agen10 cies to enter into or revise agreements under 

11 this subsection; and 

12 ‘‘(B) the criteria that the Secretary will 

13 use for selecting the guaranty agencies with 

14 which the Secretary will enter into, or revise, 

15 agreements under this subsection. 

16 ‘‘(6) AGREEMENT NOTICE.—The Secretary 

17 shall notify the members of the authorizing commit18 tees not later than 30 days prior to concluding an 

19 agreement under this subsection. 

20 ‘‘(7) PUBLIC AVAILABILITY.—The text of any 

21 voluntary flexible agreements entered into or revised 

22 under this subsection shall be readily available to the 

23 public.’’. 

24 (b) CONFORMING AMENDMENT.—Section 456 of the 

25 Higher Education Act of 1965 (20 U.S.C. 1087f) is 


smartinez on DSK6TPTVN1PROD with BILLS
5 

•HR 3624 IH

1 amended by inserting ‘‘or section 428A(d)’’ after ‘‘sections 

2 428(b)) and (c)’’. 

Æ 


smartinez on DSK6TPTVN1PROD with BILLS