39–006 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 113–531 

EMPOWERING STUDENTS THROUGH ENHANCED 

FINANCIAL COUNSELING ACT 

JULY 17, 2014.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. KLINE, from the Committee on Education and the Workforce, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 4984] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Education and the Workforce, to whom was 

referred the bill (H.R. 4984) to amend the loan counseling requirements under the Higher Education Act of 1965, and for other purposes, having considered the same, report favorably thereon with 

an amendment and recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

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 

to read as follows: 

‘‘(l) ANNUAL FINANCIAL AID COUNSELING.— ‘‘(1) ANNUAL DISCLOSURE REQUIRED.— ‘‘(A) IN GENERAL.—Each eligible institution shall ensure that each individual who receives a Federal Pell Grant or a loan made under part D 

(other than a Federal Direct Consolidation Loan) receives comprehensive 

information on the terms and conditions of such Federal Pell Grant or loan 

and the responsibilities the individual has with respect to such Federal Pell 

Grant or loan. Such information shall be provided, for each award year for 

which the individual receives such Federal Pell Grant or loan, in a simple 

and understandable manner— 

‘‘(i) during a counseling session conducted in person; 


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‘‘(ii) online, with the borrower acknowledging receipt of the information; or 

‘‘(iii) through the use of the online counseling tool described in subsection (n)(1)(B). 

‘‘(B) USE OF INTERACTIVE PROGRAMS.—In the case of institutions not using 

the online counseling tool described in subsection (n)(1)(B), the Secretary 

shall require such institutions to carry out the requirements of subparagraph (A) through the use of interactive programs, during an annual counseling session that is in-person or online, that test the individual’s understanding of the terms and conditions of the Federal Pell Grant or loan 

awarded to the student, using simple and understandable language and 

clear formatting. 

‘‘(2) ALL INDIVIDUALS.—The information to be provided under paragraph 

(1)(A) to each individual receiving counseling under this subsection shall include 

the following: 

‘‘(A) 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. 

‘‘(B) An explanation that an individual has a right to annually request 

a disclosure of information collected by a consumer reporting agency pursuant to section 612(a) of the Fair Credit Reporting Act (15 U.S.C. 1681j(a)). 

‘‘(3) STUDENTS RECEIVING FEDERAL PELL GRANTS.—The information to be provided under paragraph (1)(A) to each student receiving a Federal Pell Grant 

shall include the following: 

‘‘(A) An explanation of the terms and conditions of the Federal Pell 

Grant. 

‘‘(B) An explanation of approved educational expenses for which the student may use the Federal Pell Grant. 

‘‘(C) An explanation of why the 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 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. 

‘‘(4) BORROWERS RECEIVING LOANS MADE UNDER PART D (OTHER THAN PARENT

PLUS LOANS).—The information to be provided under paragraph (1)(A) to a borrower of a loan made under part D (other than a Federal Direct PLUS Loan 

made on behalf of a dependent student) shall include the following: 

‘‘(A) To the extent practicable, the effect of accepting the loan to be disbursed on the eligibility of the borrower for other forms of student financial 

assistance. 

‘‘(B) An explanation of the use of the master promissory note. 

‘‘(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, an explanation that 

Federal student loans typically offer better terms and conditions than private loans, and an explanation that if a borrower decides to take out a private education loan— 

‘‘(i) the borrower has the ability to select a private educational lender 

of the borrower’s choice; 

‘‘(ii) the proposed private education loan may impact the borrower’s 

potential eligibility for other financial assistance, including Federal financial assistance under this title; and 

‘‘(iii) the borrower has a right— 

‘‘(I) to accept the terms of the private education loan within 30 

calendar days following the date on which the application for such 

loan is approved and the borrower receives the required disclosure 

documents, pursuant to section 128(e)(6) of the Truth in Lending 

Act; and 


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‘‘(II) to cancel such loan within 3 business days of the date on 

which the loan is consummated, pursuant to section 128(e)(7) of 

such Act. 

‘‘(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. 

‘‘(H) Information on how interest accrues and is capitalized during periods when the interest is not paid by either the borrower or the Secretary. 

‘‘(I) In the case of a Federal Direct PLUS Loan or a Federal Direct Unsubsidized Stafford Loan, the option of the borrower to pay the interest 

while the borrower is in school. 

‘‘(J) The definition of half-time enrollment at the institution, during regular terms and summer school, if applicable, and the consequences of not 

maintaining at least half-time enrollment. 

‘‘(K) An explanation of the importance of contacting the appropriate offices at the institution of higher education if the borrower withdraws prior 

to completing the borrower’s program of study so that the institution can 

provide exit counseling, including information regarding the borrower’s repayment options and loan consolidation. 

‘‘(L) For a first-time borrower, the anticipated monthly payment amount 

under, at minimum, a standard repayment plan and, using the regionally 

available data from the Bureau of Labor Statistics of the average starting 

salary for the occupation the borrower intends to be employed, an incomebased repayment plan under section 493C, and based on— 

‘‘(i) a range of levels of indebtedness of— 

‘‘(I) borrowers of Federal Direct Stafford Loans or Federal Direct 

Unsubsidized Stafford Loans; and 

‘‘(II) as appropriate, graduate borrowers of Federal Direct PLUS 

Loans or Federal Direct Unsubsidized Stafford Loans; or 

‘‘(ii) the average cumulative indebtedness at graduation for students 

who borrowed loans made under part D and who are in the same program of study as the borrower. 

‘‘(M) For a borrower with an outstanding balance of principal or interest 

due on a loan made under this title— 

‘‘(i) a current statement of the amount of such outstanding balance 

and interest accrued; 

‘‘(ii) based on such outstanding balance, the anticipated monthly payment amount under, at minimum, the standard repayment plan and, 

using regionally available data from the Bureau of Labor Statistics of 

the average starting salary for the occupation the borrower intends to 

be employed, an income-based repayment plan under section 493C; and 

‘‘(iii) an estimate of the projected monthly payment amount under 

each repayment plan described in clause (ii), based on— 

‘‘(I) the outstanding balance described in clause (i); 

‘‘(II) the anticipated outstanding balance on the loan for which 

the student is receiving counseling under this subsection; and 

‘‘(III) a projection for any other loans made under part D that the 

borrower is reasonably expected to accept during the borrower’s 

program of study based on at least the expected increase in the 

cost of attendance of such program. 

‘‘(N) The obligation of the borrower to repay the full amount of the loan, 

regardless of whether the borrower completes or does not complete the program in which the borrower is enrolled within the regular time for program 

completion. 

‘‘(O) The likely consequences of default on the loan, including adverse 

credit reports, delinquent debt collection procedures under Federal law, and 

litigation, and a notice of the institution’s most recent cohort default rate 

(defined in section 435(m)), an explanation of the cohort default rate, and 

the most recent national average cohort default rate for the category of institution described in section 435(m)(4) to which the institution belongs. 

‘‘(P) Information on the National Student Loan Data System and how the 

borrower can access the borrower’s records. 

‘‘(Q) The contact information for the institution’s financial aid office or 

other appropriate office at the institution the borrower may contact if the 

borrower has any questions about the borrower’s rights and responsibilities 

or the terms and conditions of the loan. 

‘‘(5) BORROWERS RECEIVING PARENT PLUS LOANS FOR DEPENDENT STUDENTS.— 

The information to be provided under paragraph (1)(A) to a borrower of a FedVerDate Mar 15 2010 06:41 Jul 18, 2014 Jkt 039006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6621 E:\HR\OC\HR531.XXX HR531

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eral Direct PLUS Loan made on behalf of a dependent student shall include the 

following: 

‘‘(A) The information described in subparagraphs (A) through (C) and (N) 

through (Q) of paragraph (4). 

‘‘(B) The option of the borrower to pay the interest on the loan while the 

loan is in deferment. 

‘‘(C) For a first-time borrower of such loan, sample monthly repayment 

amounts under the standard repayment plan based on— 

‘‘(i) a range of levels of indebtedness of borrowers of Federal Direct 

PLUS Loans made on behalf of a dependent student; or 

‘‘(ii) the average cumulative indebtedness of other borrowers of Federal Direct PLUS Loans made on behalf of dependent students who are 

in the same program of study as the student on whose behalf the borrower borrowed the loan. 

‘‘(D) For a borrower with an outstanding balance of principal or interest 

due on such loan— 

‘‘(i) a statement of the amount of such outstanding balance; 

‘‘(ii) based on such outstanding balance, the anticipated monthly payment amount under the standard repayment plan; and 

‘‘(iii) an estimate of the projected monthly payment amount under the 

standard repayment plan, based on— 

‘‘(I) the outstanding balance described in clause (i); 

‘‘(II) the anticipated outstanding balance on the loan for which 

the borrower is receiving counseling under this subsection; and 

‘‘(III) a projection for any other Federal Direct PLUS Loan made 

on behalf of the dependent student that the borrower is reasonably 

expected to accept during the program of study of such student 

based on at least the expected increase in the cost of attendance 

of such program. 

‘‘(E) Debt management strategies that are designed to facilitate the repayment of such indebtedness. 

‘‘(F) An explanation that the borrower has the options to prepay each 

loan, pay each loan on a shorter schedule, and change repayment plans. 

‘‘(G) For each Federal Direct PLUS Loan made on behalf of a dependent 

student 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. 

‘‘(6) ANNUAL LOAN ACCEPTANCE.—Prior to making the first disbursement of a 

loan made under part D (other than a Federal Direct Consolidation Loan) 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), 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 

(n)(1)(A)’’; 

(B) by redesignating clauses (i) through (ix) as clauses (iv) through (xii), 

respectively; 

(C) 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;’’; 

(D) in clause (iv), as so redesignated— 


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(i) 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’’; and 

(ii) by striking ‘‘of each plan’’ and inserting ‘‘of at least the standard 

repayment plan and the income-based repayment plan under section 

493C’’; 

(E) in clause (x), as so redesignated, by striking ‘‘consolidation loan under 

section 428C or a’’; 

(F) in clauses (xi) and (xii), as so redesignated, by striking ‘‘and’’ at the 

end; and 

(G) 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; and 

‘‘(xiv) an explanation that an individual has a right to annually request a disclosure of information collected by a consumer reporting agency pursuant to section 612(a) of the Fair Credit Reporting Act (15 U.S.C. 1681j(a)).’’; 

(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 (n)(1)(A), the Secretary shall attempt to provide such information to the student in the manner described in subsection (n)(3)(C)’’; and 

(3) in paragraph (2)(C), by inserting ‘‘, such as the online counseling tool described in subsection (n)(1)(A),’’ after ‘‘electronic means’’. 

SEC. 4. 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: 

‘‘(n) 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; and 

‘‘(B) an online counseling tool that provides the annual counseling required under subsection (l) 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 that each such tool is— 

‘‘(A) consumer tested, in consultation with other relevant Federal agencies, to ensure that the tool is effective in helping individuals understand 

their rights and obligations with respect to borrowing a loan made under 

part D or receiving a Federal Pell Grant; 

‘‘(B) understandable to students receiving Federal Pell Grants and borrowers of loans made under part D; and 

‘‘(C) 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 individuals have received counseling using the tool, and 

notify the applicable institutions of the individual’s completion of such 

counseling; 

‘‘(B) in the case of a borrower who receives annual counseling for a loan 

made under part D using the tool described in paragraph (1)(B), notify the 

borrower by when the borrower should accept, in a manner described in 

section 485(l)(6), the loan for which the borrower has received such counseling; and 

‘‘(C) in the case of a borrower 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 borrower through such tool.’’. 

SEC. 5. AVAILABILITY OF FUNDS. 

(a) USE OF EXISTING FUNDS.—Of the amount authorized to be appropriated for 

maintaining the Department of Education’s Financial Awareness Counseling Tool, 

$2,000,000 shall be available to carry out this Act and the amendments made by 

this Act. 

(b) NO ADDITIONAL FUNDS AUTHORIZED.—No funds are authorized to be appropriated by this Act to carry out this Act or the amendments made by this Act. 


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PURPOSE

H.R. 4984, the Empowering Students through Enhanced Financial Counseling Act, promotes financial literacy through enhanced 

counseling for recipients of federal financial aid. 

COMMITTEE ACTION

As the Committee on Education and the Workforce begins the 

Higher Education Act reauthorization process, increasing transparency and usefulness of higher education data; simplifying and 

improving the federal student aid programs; and promoting innovation, access, and completion remain top priorities. 

112TH CONGRESS

Hearings—First session 

On March 1, 2011, the Committee on Education and the Workforce held a hearing in Washington, D.C., on ‘‘Education Regulations: Weighing the Burden on Schools and Students.’’ The hearing 

was the first in a series examining the burden of federal, state, and 

local regulations on the nation’s education system. The purpose of 

the hearing was to uncover the damaging effects of federal regulations on schools and institutions. These rules increasingly stifle 

growth and innovation, raise operating costs, and limit student access to affordable colleges and universities throughout the nation. 

Testifying before the committee were Dr. Edgar Hatrick, Superintendent, Loudon County Public Schools, Ashburn, Virginia; Ms. 

Kati Haycock, President, The Education Trust, Washington, D.C.; 

Mr. Gene Wilhoit, Executive Director, Council of Chief State School 

Officers, Washington, D.C.; and Mr. Christopher B. Nelson, President, St. John’s College, Annapolis, Maryland. 

On March 11, 2011, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., on ‘‘Education Regulations: 

Federal Overreach into Academic Affairs.’’ The purpose of the hearing was to discuss the most egregious and intrusive pieces of the 

program integrity regulations issued by the U.S. Department of 

Education, specifically, the state authorization regulation and the 

credit hour regulation, and to uncover the unintended consequences 

of the regulations to states and institutions of higher education. 

Testifying before the subcommittee were Mr. John Ebersole, President, Excelsior College, Albany, New York; Dr. G. Blair Dowden, 

President, Huntington University, Huntington, Indiana; The Honorable Kathleen Tighe, Inspector General, U.S. Department of Education, Washington, D.C.; and Mr. Ralph Wolff, President, Western 

Association of Schools and Colleges, Alameda, California. 

On March 17, 2011, the Committee on Education and the Workforce held a hearing in Washington, D.C., on ‘‘Education Regulations: Roadblocks to Student Choice in Higher Education.’’ The purpose of the hearing was to explore the harmful consequences of the 

gainful employment regulation issued by the U.S. Department of 

Education. Testifying before the committee were Ms. Catherine 

Barreto, Graduate, Monroe College, and Senior Sales Associate, 

Doubletree Hotels, Brooklyn, New York; Mr. Travis Jennings, Electrical Supervisor of the Manufacturing Launch Systems Group, OrVerDate Mar 15 2010 06:41 Jul 18, 2014 Jkt 039006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR531.XXX HR531

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bital Sciences Corporation, Chandler, Arizona; Dr. Arnold Mitchem, 

President, Council for Opportunity in Education, Washington, D.C.; 

and Ms. Jeanne Herrmann, Chief Operating Officer, Globe University/Minnesota School of Business, Woodbury, Minnesota. 

On March 21, 2011, the Committee on Education and the Workforce held a hearing in Wilkes-Barre, Pennsylvania, on ‘‘Reviving 

our Economy: The Role of Higher Education in Job Growth and Development.’’ The purpose of the hearing was to highlight work by 

local colleges and universities to respond to local and state economic needs. Testifying before the committee were Mr. James 

Perry, President, Hazelton City Council, Hazelton, Pennsylvania; 

Mr. Jeffrey Alesson, Vice President of Strategic Planning and Quality Assurance, Diamond Manufacturing, Exeter, Pennsylvania; Dr. 

Reynold Verret, Provost, Wilkes University, Wilkes-Barre, Pennsylvania; Mr. Raymond Angeli, President, Lackawanna College, 

Scranton, Pennsylvania; Ms. Joan Seaman, Executive Director, 

Empire Beauty School, Moosic, Pennsylvania; and Mr. Thomas P. 

Leary, President, Luzerne County Community College, Nanticoke, 

Pennsylvania. 

On March 22, 2011, the Committee on Education and the Workforce held a hearing in Utica, New York, on ‘‘Reviving our Economy: The Role of Higher Education in Job Growth and Development.’’ The purpose of the hearing was to highlight work by local 

colleges and universities to respond to local and state economic 

needs. Testifying before the committee were Mr. Anthony J. 

Picente, Jr., County Executive, Oneida County, Utica, New York; 

Mr. Dave Mathis, Director, Oneida County Workforce Development, Utica, New York; Dr. John Bay, Vice President and Chief 

Scientist, Assured Information Security, Inc., Rome, New York; Dr. 

Bjong Wolf Yeigh, President, State University of New York Institute of Technology, Utica, New York; Dr. Ann Marie Murray, President, Herkimer County Community College, Herkimer, New York; 

Dr. Judith Kirkpatrick, Provost, Utica College, Utica, New York; 

and Mr. Phil Williams, President, Utica School of Commerce, The 

Business College, Utica, New York. 

On April 21, 2011, the Committee on Education and the Workforce held a hearing in Columbia, Tennessee, on ‘‘Reviving our 

Economy: The Role of Higher Education in Job Growth and Development.’’ The purpose of the hearing was to highlight the work by 

local colleges and universities to respond to local and state economic needs. Testifying before the committee were Dr. Janet 

Smith, President, Columbia State Community College, Columbia, 

Tennessee; Dr. Ted Brown, President, Martin-Methodist College, 

Pulaski, Tennessee; Mr. Jim Coakley, President, Nashville AutoDiesel College, Nashville, Tennessee; The Honorable Dean Dickey, 

Mayor, City of Columbia, Tennessee; Ms. Susan Marlow, President 

and Chief Executive Officer, Smart Data Strategies, Franklin, Tennessee; Ms. Jan McKeel, Executive Director, South Central Tennessee Workforce Board, Columbia, Tennessee; and Ms. Margaret 

Prater, Executive Director, Northwest Tennessee Workforce Board, 

Dyersburg, Tennessee. 

On July 8, 2011, the Committee on Education and the Workforce 

Subcommittee on Higher Education and Workforce Training, together with the House Committee on Oversight and Government 

Reform Subcommittee on Regulatory Affairs, Stimulus Oversight, 


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and Government Spending, held a hearing in Washington, D.C., on 

‘‘The Gainful Employment Regulation: Limiting Job Growth and 

Student Choice.’’ The purpose of the hearing was to explore the 

harmful consequences of the gainful employment regulation issued 

by the U.S. Department of Education. Testifying before the subcommittees were Dr. Dario A. Cortes, President, Berkeley College, 

New York City, New York; Dr. Anthony P. Carnevale, Director, 

Georgetown University Center on Education and the Workforce, 

Washington, D.C.; Ms. Karla Carpenter, Graduate, Herzing University and Program Manager, Quest Software, Madison, Wisconsin; and Mr. Harry C. Alford, President and Chief Executive Officer, National Black Chamber of Commerce, Washington, D.C. 

On August 16, 2011, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Greenville, South Carolina, on ‘‘Reviving Our 

Economy: The Role of Higher Education in Job Growth and Development.’’ The purpose of the hearing was to highlight the work by 

local colleges and universities to respond to local and state economic needs. Testifying before the subcommittee were The Honorable Knox White, Mayor, City of Greenville, South Carolina; Mr. 

Werner Eikenbusch, Section Manager, Associate Development and 

Training, BMW Manufacturing Co., Spartanburg, South Carolina; 

Ms. Laura Harmon, Project Director, Greenville Works, Greenville, 

South Carolina; Dr. Brenda Thames, Vice President of Academic 

Development, Greenville Health System, Greenville, South Carolina; Mr. James F. Barker, President, Clemson University, 

Clemson, South Carolina; Dr. Thomas F. Moore, Chancellor, University of South Carolina Upstate, Spartanburg, South Carolina; 

Dr. Keith Miller, President, Greenville Technical College, Greenville, South Carolina; and Ms. Amy Hickman, Campus President, 

ECPI College of Technology, Greenville, South Carolina. 

On October 25, 2011, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., on ‘‘Government-Run Student 

Loans: Ensuring the Direct Loan Program is Accountable to Students and Taxpayers.’’ The purpose of the hearing was to examine 

the switch to and implementation of the Direct Loan program. Testifying before the subcommittee were Mr. James W. Runcie, Chief 

Operating Officer, Office of Federal Student Aid, U.S. Department 

of Education, Washington, D.C.; Mr. Ron H. Day, Director of Financial Aid, Kennesaw State University, Kennesaw, Georgia; Ms. 

Nancy Hoover, Director of Financial Aid, Denison University, 

Granville, Ohio; and Mr. Mark. A. Bandre ́, Vice President for Enrollment Management and Student Affairs, Baker University, Baldwin City, Kansas. 

On November 30, 2011, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., on ‘‘Keeping College 

Within Reach: Discussing Ways Institutions Can Streamline Costs 

and Reduce Tuition.’’ The purpose of the hearing was to highlight 

innovative practices institutions of higher education are implementing to reduce their costs to limit tuition increases for students. 

Testifying before the subcommittee were Ms. Jane V. Wellman, Executive Director, Delta Project on Postsecondary Costs, Productivity, and Accountability, Washington, D.C.; Dr. Ronald E. 


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Manahan, President, Grace College and Seminary, Winona Lake, 

Indiana; Mr. Jamie P. Merisotis, President and Chief Executive Officer, Lumina Foundation for Education, Indianapolis, Indiana; and 

Mr. Tim Foster, President, Colorado Mesa University, Grand Junction, Colorado. 

Legislative action—First session 

On February 17, 2011, the House of Representatives considered 

an amendment offered by Chairman John Kline (R–MN), Higher 

Education and Workforce Training Subcommittee Chairwoman Virginia Foxx (R–NC), and Rep. Alcee Hastings (D–FL) to H.R. 1, the 

Disaster Relief Appropriations Act of 2013. The amendment prohibited the use of funds by the U.S. Department of Education to implement and enforce the gainful employment regulation. The 

amendment was agreed to by a bipartisan vote of 289 to 136. 

On February 19, 2011, the House of Representatives passed H.R. 

1 by a vote of 235 to 189. The amendment was not included in the 

bill at final passage. 

On June 3, 2011, Chairman John Kline (R–MN) and Higher Education and Workforce Training Subcommittee Chairwoman Virginia 

Foxx (R–NC) introduced H.R. 2117, the Protecting Academic Freedom in Higher Education Act. The bill repealed the state authorization regulation, one piece of the credit hour regulation, and prohibited the secretary of education from defining credit hour for any 

purpose under the Higher Education Act of 1965. 

On June 15, 2011, the Committee on Education and the Workforce considered H.R. 2117 in legislative session and reported it favorably, as amended, to the House of Representatives by a bipartisan vote of 27 to 11. 

The committee considered and adopted the following amendment 

to H.R. 2117: • Subcommittee Chairwoman Virginia Foxx (R–NC) offered 

an amendment in the nature of a substitute to add a short title 

to the legislation. The amendment was adopted by voice vote. 

The committee further considered the following amendments to 

H.R. 2117, which were not adopted: 

• Rep. Rau ́l Grijalva (D–AZ) offered an amendment to maintain pieces of the state authorization regulation, including the 

complaint process. The amendment failed by a vote of 17 to 22. 

• Ranking Member George Miller (D–CA) offered an amendment to prohibit implementation until the U.S. Department of 

Education Inspector General certifies there are equal or greater protections in place related to program integrity under Title 

IV of the Higher Education Act of 1965. The amendment failed 

by a vote of 17 to 22. 

• Rep. Rush Holt (D–NJ) offered an amendment to stipulate 

the act will be effective only if the maximum Pell Grant award 

is at least $5,550 for the 2012–2013 school year. The amendment was ruled out of order. 

• Rep. Tim Bishop (D–NY) offered an amendment to strike 

the repeal of the credit hour regulation that establishes a federal definition of a ‘‘credit hour.’’ The amendment failed by a 

vote of 11 to 27. 

• Rep. Tim Bishop (D–NY) offered an amendment to strike 

the prohibition on the secretary of education from defining 


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credit hour in the future. The amendment failed by a vote of 

16 to 22. 

Hearings—Second session 

On July 18, 2012, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., on ‘‘Keeping College Within 

Reach: Exploring State Efforts to Curb Costs.’’ The purpose of the 

hearing was to highlight innovative practices at the state level to 

assist postsecondary institutions in keeping costs affordable and to 

promote accountability of public funds. Testifying before the subcommittee were Mr. Scott Pattison, Executive Director, National 

Association of State Budget Officers, Washington, D.C.; Ms. Teresa 

Lubbers, Commissioner for Higher Education, State of Indiana, Indianapolis, Indiana; Mr. Stan Jones, President, Complete College 

America, Zionsville, Indiana; and Dr. Joe May, President, Louisiana Community and Technical College System, Baton Rouge, 

Louisiana. 

On September 20, 2012, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., on ‘‘Assessing College 

Data: Helping to Provide Valuable Information to Students, Institutions, and Taxpayers.’’ The purpose of the hearing was to examine data collected by the federal government from institutions of 

higher education, including data requirements established during 

the last reauthorization of the Higher Education Act. Testifying before the subcommittee were Dr. Mark Schneider, Vice President, 

American Institutes for Research, Washington, D.C.; Dr. James 

Hallmark, Vice Chancellor for Academic Affairs, Texas A&M System, College Station, Texas; Dr. Jose ́ Cruz, Vice President for 

Higher Education Policy and Practice, The Education Trust, Washington, D.C.; and Dr. Tracy Fitzsimmons, President, Shenandoah 

University, Winchester, Virginia. 

Legislative action—Second session 

On February 28, 2012, the House of Representatives passed H.R. 

2117 by a bipartisan vote of 303 to 114. The bill was sent to the 

Senate and referred to the Senate Committee on Health, Education, Labor, and Pensions. 

On April 25, 2012, Rep. Judy Biggert (R–IL) introduced H.R. 

4628, the Interest Rate Reduction Act. The bill reduced the interest 

rate on subsidized Stafford loans made to undergraduate students 

from 6.8 percent to 3.4 percent for one year, from July 1, 2012, 

through June 30, 2013. To offset the increase in mandatory spending, the bill repealed the Prevention and Public Health Fund authorized under Section 4002 of the Patient Protection and Affordable Care Act and rescinded the balance of unobligated monies 

made available for the fund. 

On April 27, 2012, the House of Representatives passed H.R. 

4628 by a vote of 215 to 195. 

While H.R. 4628 was never considered by the Senate, its provisions were included in the Conference Report for H.R. 4348, the 

Moving Ahead for Progress in the 21st Century Act (MAP–21), sponsored by Rep. John Mica (R–FL). To partially offset the increase in 

mandatory spending that resulted from the temporary reduction in 


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interest rates on subsidized Stafford loans, the bill permanently restricted the period of eligibility to borrow subsidized Stafford loans 

to 150 percent of the published length of a student’s educational 

program. 

On June 29, 2012, the House of Representatives passed the Conference Report to H.R. 4348 by a bipartisan vote of 373 to 52. 

On June 29, 2012, the Senate passed the Conference Report to 

H.R. 4348 by a bipartisan vote of 74 to 19. 

On July 6, 2012, the President of the United States signed H.R. 

4348 into law (P.L. 112–141). 

113TH CONGRESS

Hearings—First session 

On March 13, 2013, the Committee on Education and the Workforce held a hearing in Washington, D.C., on ‘‘Keeping College 

Within Reach: Examining Opportunities to Strengthen Federal 

Student Loan Programs.’’ The purpose of the hearing was to examine ways to strengthen federal student loans, as well as how moving to a market-based or variable interest rate on all federal student loans could benefit both students and taxpayers. Testifying 

before the committee were Dr. Deborah J. Lucas, Sloan Distinguished Professor of Finance, Massachusetts Institute of Technology, Cambridge, Massachusetts; Mr. Jason Delisle, Director, 

Federal Education Budget Project, The New America Foundation, 

Washington, D.C.; Mr. Justin Draeger, President and Chief Executive Officer, National Association of Student Financial Aid Administrators, Washington, D.C.; and Dr. Charmaine Mercer, Vice President of Policy, Alliance for Excellent Education, Washington, D.C. 

On April 9, 2013, the Committee on Education and the Workforce 

Subcommittee on Higher Education and Workforce Training held a 

hearing in Monroe, Michigan, entitled ‘‘Reviving Our Economy: The 

Role of Higher Education in Job Growth and Development.’’ The 

purpose of the hearing was to highlight work being done by local 

colleges and universities to respond to local and state economic 

needs. Testifying before the subcommittee were Mr. Henry Lievens, 

Commissioner, Monroe County, Monroe, Michigan; Ms. Lynette 

Dowler, Plant Director, Fossil Generation, DTE Energy, Detroit, 

Michigan; Ms. Susan Smith, Executive Director, Economic Development Partnership of Hillsdale County, Jonesville, Michigan; Mr. 

Dan Fairbanks, United Auto Workers International Representative, 

UAW–GM Skill Development and Training Department, Detroit, 

Michigan; Dr. David E. Nixon, President, Monroe County Community College, Monroe, Michigan; Sister Peg Albert, OP, Ph.D., 

President, Siena Heights University, Adrian, Michigan; Dr. 

Michelle Shields, Career Coach/Workforce Development Director, 

Jackson Community College, Jackson, Michigan; and Mr. Douglas 

A. Levy, Director of Financial Aid, Macomb Community College, 

Warren, Michigan. 

On April 16, 2013, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., entitled ‘‘Keeping College 

Within Reach: The Role of Federal Student Aid Programs.’’ The 

purpose of the hearing was to examine shifting the focus of federal 

student aid programs from enhancing access to improving student 


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outcomes. Testifying before the subcommittee were Mr. Terry W. 

Hartle, Senior Vice President, Division of Government and Public 

Affairs, American Council on Education, Washington, D.C.; Ms. 

Moriah Miles, State Chair, Minnesota State University Student Association, Mankato, Minnesota; Ms. Patricia McGuire, President, 

Trinity Washington University, Washington, D.C.; and Mr. Dan 

Madzelan, Former Employee (Retired), U.S. Department of Education, University Park, Maryland. 

On April 24, 2013, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce held a 

hearing in Washington, D.C., entitled ‘‘Keeping College Within 

Reach: Enhancing Transparency for Students, Families, and Taxpayers.’’ The purpose of the hearing was to examine ways to improve the information provided by the federal government to inform students and families about their postsecondary education options. Testifying before the subcommittee were Dr. Donald E. Heller, Dean, College of Education, Michigan State University, East 

Lansing, Michigan; Mr. Alex Garrido, Student, Keiser University, 

Miami, Florida; Dr. Nicole Farmer Hurd, Founder and Executive 

Director, National College Advising Corps, Carrboro, North Carolina; and Mr. Travis Reindl, Program Director, Postsecondary Education, National Governors Association Center for Best Practices, 

Washington, D.C. 

On June 13, 2013, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., entitled ‘‘Keeping College 

Within Reach: Discussing Program Quality through Accreditation.’’ 

The purpose of the hearing was to examine the historical role of 

accreditation, discuss the role of regional and national accreditors 

in measuring institutional quality, and contemplate areas for reform. Testifying before the subcommittee were Dr. Elizabeth H. 

Sibolski, President, Middle States Commission on Higher Education, Philadelphia, Pennsylvania; Dr. Michale McComis, Executive Director, Accrediting Commission of Career Schools and Colleges, Arlington, Virginia; Ms. Anne D. Neal, President, American 

Council of Trustees and Alumni, Washington, D.C.; and Mr. Kevin 

Carey, Director of the Education Policy Program, The New America 

Foundation, Washington, D.C. 

On July 9, 2013, the Committee on Education and the Workforce 

held a hearing in Washington, D.C., entitled ‘‘Keeping College 

Within Reach: Improving Higher Education through Innovation.’’ 

The purpose of the hearing was to highlight innovation in higher 

education occurring at the state and institutional level and in the 

private sector. Testifying before the committee were Mr. Scott Jenkins, Director of External Relations, Western Governors University, Salt Lake City, Utah; Dr. Pamela J. Tate, President and Chief 

Executive Officer, Council for Adult and Experiential Learning, 

Chicago, Illinois; Dr. Joann A. Boughman, Senior Vice Chancellor 

for Academic Affairs, University System of Maryland, Adelphi, 

Maryland; and Mr. Burck Smith, Chief Executive Officer and 

Founder, StraighterLine, Baltimore, Maryland. 

On September 11, 2013, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., entitled ‘‘Keeping 

College Within Reach: Supporting Higher Education Opportunities 


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for America’s Servicemembers and Veterans.’’ The purpose of the 

hearing was to examine the efforts of higher education to improve 

postsecondary education opportunities for servicemembers and veterans. Testifying before the subcommittee were Mrs. Kimrey W. 

Rhinehardt, Vice President for Federal and Military Affairs, The 

University of North Carolina, Chapel Hill, North Carolina; Dr. Arthur F. Kirk, Jr., President, Saint Leo University, Saint Leo, Florida; Dr. Russell S. Kitchner, Vice President for Regulatory and 

Governmental Relations, American Public University System, 

Charles Town, West Virginia; and Dr. Ken Sauer, Senior Associate 

Commissioner for Research and Academic Affairs, Indiana Commission for Higher Education, Indianapolis, Indiana. 

On September 18, 2013, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., entitled ‘‘Keeping 

College Within Reach: Improving Access and Affordability through 

Innovative Partnerships.’’ The purpose of the hearing was to examine the efforts of higher education institutions to expand access and 

reduce costs by partnering with local employers, other colleges, or 

online course providers. Testifying before the subcommittee were 

Dr. Jeffrey Docking, President, Adrian College, Adrian, Michigan; 

Ms. Paula R. Singer, President and Chief Executive Officer, Laureate Global Products and Services, Baltimore, Maryland; Dr. Rich 

Baraniuk, Professor, Rice University, and Founder, Connexions, 

Houston, Texas; and Dr. Charles Lee Isbell, Jr., Professor and Senior Associate Dean, College of Computing, Georgia Institute of 

Technology, Atlanta, Georgia. 

On November 13, 2013, the Committee on Education and the 

Workforce held a hearing in Washington, D.C., entitled ‘‘Keeping 

College Within Reach: Simplifying Federal Student Aid.’’ The purpose of the hearing was to examine the need to streamline, consolidate, and simplify federal student aid programs. Testifying before 

the committee were Ms. Kristin D. Conklin, Founding Partner, 

HCM Strategies, LLC, Washington, D.C.; Dr. Sandy Baum, Research Professor of Education Policy, George Washington University Graduate School of Education and Human Development, and 

Senior Fellow, Urban Institute, Washington, D.C.; Ms. Jennifer 

Mishory, J.D., Deputy Director, Young Invincibles, Washington, 

D.C.; and Mr. Jason Delisle, Director, Federal Education Budget 

Project, New America Foundation, Washington, D.C. 

On December 3, 2013, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., entitled ‘‘Keeping 

College Within Reach: Strengthening Pell Grants for Future Generations.’’ The purpose of the hearing was to examine Pell Grant 

program reform proposals to better target funds to the neediest 

students and put the program on a fiscally responsible and sustainable path. Testifying before the subcommittee were Mr. Justin 

Draeger, President and Chief Executive Officer, National Association of Student Financial Aid Administrators, Washington, D.C.; 

Dr. Jenna Ashley Robinson, Director of Outreach, John W. Pope 

Center for Higher Education Policy, Raleigh, North Carolina; Mr. 

Michael Dannenberg, Director of Higher Education and Education 

Finance Policy, The Education Trust, Washington, D.C.; and Mr. 


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Richard C. Heath, Director of Student Financial Services, Anne 

Arundel Community College, Arnold, Maryland. 

Legislative action—First session 

On May 9, 2013, Chairman John Kline (R–MN) and Higher Education and Workforce Training Subcommittee Chairwoman Virginia 

Foxx (R–NC) introduced H.R. 1911, the Smarter Solutions for Students Act. The bill moved all federal student loans (except Perkins 

loans) to a market-based interest rate. 

On May 16, 2013, the Committee on Education and the Workforce considered H.R. 1911 in legislative session and reported it favorably, as amended, to the House of Representatives by a bipartisan vote of 24 to 13. 

The committee considered and adopted the following amendment 

to H.R. 1911: • Subcommittee Chairwoman Virginia Foxx (R–NC) offered 

an amendment in the nature of a substitute to make a technical change to the bill. The amendment was adopted by voice 

vote. 

The committee further considered the following amendments to 

H.R. 1911, which were not adopted: • Rep. Joe Heck (R–NV) offered an amendment to allocate a 

portion of the savings generated under the bill to Pell Grants. 

The amendment was withdrawn. • Rep. Joe Heck (R–NV) offered an amendment to provide 

the secretary of education with authority to reduce the interest 

rate on student loans if a borrower makes the first 48 payments on time. The amendment was withdrawn. • Rep. John Tierney (D–MA) offered an amendment to set 

the federal student loan interest rates at the same rate the 

Federal Reserve charges to banks for two years. The amendment failed by a vote of 14 to 23. • Rep. Joe Courtney (D–CT) offered an amendment to extend the 3.4 percent interest rate on subsidized Stafford loans 

for two years. The amendment failed by a vote of 15 to 21. 

On May 23, 2013, the House of Representatives passed H.R. 1911 

by a bipartisan vote of 221 to 198. 

On July 24, 2013, the Senate passed a substitute version of H.R. 

1911, the Bipartisan Student Loan Certainty Act, by a bipartisan 

vote of 81 to 18. The legislation allowed student loan interest rates 

to reset once a year by the market, but lock into a fixed rate once 

the loan is disbursed to the student. Interest rates would be set 

using the following formulas: 

• Undergraduate Stafford loans (subsidized and unsubsidized): 10-year Treasury Note plus 2.05 percent, capped at 

8.25 percent. 

• Graduate Stafford loans: 10-year Treasury Note plus 3.6 

percent, capped at 9.5 percent 

• PLUS loans (graduate and parent): 10-year Treasury Note 

plus 4.6 percent, capped at 10.5 percent. 

On July 31, 2013, the House of Representatives agreed to suspend the rules and agree to the Senate amendment to H.R. 1911 

by a bipartisan vote of 392 to 31. 

On August 9, 2013, the President of the United States signed 

H.R. 1911 into law (P.L. 113–28). 


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On May 13, 2013, Rep. Luke Messer (R–IN) introduced H.R. 

1949, the Improving Postsecondary Education Data for Students 

Act. The bill directed the secretary of education to convene an Advisory Committee on Improving Postsecondary Education Data to 

conduct a study on the factors students and families want, need, 

and already consider when choosing a higher education institution. 

On May 16, 2013, the Committee on Education and the Workforce considered H.R. 1949 in legislative session and reported it favorably, as amended, to the House of Representatives by a voice 

vote. The committee considered and adopted the following amendment to H.R. 1949: • Rep. Luke Messer (R–IN) offered an amendment in the nature of a substitute to H.R. 1949 to (1) include individuals who 

represent undergraduate and graduate education; college and 

career counselors at secondary schools; experts in data policy, 

collection, and use; and experts in labor markets on the list of 

individuals required to be represented on the Advisory Committee on Improving Postsecondary Education Data; (2) ensure 

individuals on the advisory committee represent economic, racial, and geographically diverse populations; (3) require the advisory committee to examine information related to the sources 

of financial assistance, including federal student loans, as part 

of the required aspects of the study; (4) require the advisory 

committee to examine how information regarding student outcomes should be disaggregated for first-generation students; 

and (5) provide other conforming and technical changes to the 

bill. The amendment was adopted by voice vote. 

On May 23, 2013, the House of Representatives agreed to suspend the rules and pass H.R. 1949 by voice vote. The bill was sent 

to the Senate and referred to the Senate Committee on Health, 

Education, Labor, and Pensions. 

On July 10, 2013, Chairman John Kline (R–MN), Higher Education and Workforce Training Subcommittee Chairwoman Virginia 

Foxx (R–NC), and Rep. Alcee Hastings (D–FL) introduced H.R. 

2637, the Supporting Academic Freedom through Regulatory Relief 

Act. The bill, which included the text of the Protecting Academic 

Freedom in Higher Education Act (H.R. 2117) and the Kline/Foxx/ 

Hastings amendment to H.R. 1 from the 112th Congress, repealed 

the credit hour, state authorization, and gainful employment regulations and amended the statute to clarify the incentive compensation regulation. Additionally, the bill prohibited the U.S. Department of Education from issuing related regulations until after Congress reauthorizes the Higher Education Act. 

On July 24, 2013, the Committee on Education and the Workforce considered H.R. 2637 in legislative session and reported it favorably, as amended, to the House of Representatives by a bipartisan vote of 22 to 13. 

The committee considered and adopted the following amendment 

to H.R. 2637: 

• Subcommittee Chairwoman Virginia Foxx (R–NC) offered 

an amendment in the nature of a substitute to change a subsection title in the legislation. The amendment was adopted by 

voice vote. 

The committee further considered the following amendment to 

H.R. 2637, which was not adopted: 


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• Rep. Tim Bishop (D–NY) offered an amendment to strike 

the prohibition on the U.S. Department of Education from 

issuing regulations related to state authorization, gainful employment, and credit hour. The amendment failed by a vote of 

13 to 22. 

Hearings—Second session 

On January 28, 2014, the Committee on Education and the 

Workforce Subcommittee on Higher Education and Workforce 

Training held a hearing in Washington, D.C., entitled ‘‘Keeping 

College Within Reach: Sharing Best Practices for Serving Low-Income and First Generation Students.’’ The purpose of the hearing 

was to highlight best practices at institutions of higher education 

for serving low-income and first generation students. Testifying before the subcommittee were Dr. James Anderson, Chancellor, Fayetteville State University, Fayetteville, North Carolina; Mrs. Mary 

Beth Del Balzo, Senior Executive Vice President and Chief Executive Officer, The College of Westchester, White Plains, New York; 

Mr. Josse Alex Garrido, Graduate Student, University of Texas— 

Pan American, Edinburg, Texas; and Rev. Dennis H. 

Holtschneider, President, DePaul University, Chicago, Illinois. 

On February 27, 2013, the Committee on Education and the 

Workforce Subcommittee on Early Childhood, Elementary, and Secondary Education and Subcommittee on Higher Education and 

Workforce Training held a joint hearing in Washington, D.C., entitled ‘‘Exploring Efforts to Strengthen the Teaching Profession.’’ The 

purpose of the hearing was to discuss the state of teacher preparation nationwide. Testifying before the subcommittees were Dr. 

Deborah A. Gist, Commissioner, Rhode Island Department of Elementary and Secondary Education, Providence, Rhode Island; Dr. 

Marcy Singer-Gabella, Professor of the Practice of Education, Vanderbilt University, Nashville, Tennessee; Dr. Heather Peske, Associate Commissioner for Educator Quality, Massachusetts Department of Elementary and Secondary Education, Malden, Massachusetts; and Ms. Christina Hall, Co-Founder and Co-Director, Urban 

Teacher Center, Baltimore, Maryland. 

On March 12, 2014, the Committee on Education and the Workforce Subcommittee on Higher Education and Workforce Training 

held a hearing in Washington, D.C., entitled ‘‘Examining the Mismanagement of the Student Loan Rehabilitation Process.’’ The purpose of the hearing was to examine the U.S. Department of Education’s ability to oversee the processing of rehabilitated loans 

issued under the Direct Loan program. Testifying before the subcommittee were Ms. Melissa Emrey-Arras, Director of Education, 

Workforce, and Income Security Issues, U.S. Government Accountability Office, Boston, Massachusetts; The Honorable Kathleen 

Tighe, Inspector General, Department of Education, Washington, 

D.C.; Mr. James Runcie, Chief Operating Officer, Federal Student 

Aid, U.S. Department of Education, Washington, D.C.; and Ms. Peg 

Julius, Executive Director of Enrollment Management, Kirkwood 

Community College, Cedar Rapids, Iowa. 

On March 20, 2014, the Committee on Education and the Workforce held a hearing in Mesa, Arizona, entitled ‘‘Reviving our Economy: Supporting a 21st Century Workforce.’’ The purpose of the 

hearing was to explore the role of local higher education instituVerDate Mar 15 2010 06:41 Jul 18, 2014 Jkt 039006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR531.XXX HR531

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tions in fostering job creation and growth through innovative partnerships with the business community and new modes of teaching 

delivery. Testifying before the committee were The Honorable Rick 

Heumann, Vice Mayor, City of Chandler, Arizona; Ms. Cathleen 

Barton, Education Manager, Intel Corporate Affairs, Southwestern 

United States, Intel Corporation, Chandler, Arizona; Mr. Lee D. 

Lambert, J.D., Chancellor, Pima Community College, Tucson, Arizona; Dr. William Pepicello, President, University of Phoenix, 

Tempe, Arizona; Dr. Michael Crow, President, Arizona State University, Tempe, Arizona; Dr. Ann Weaver Hart, President, The University of Arizona, Tucson, Arizona; Dr. Ernest A. Lara, President, 

Estrella Mountain Community College, Avondale, Arizona; and Ms. 

Christy Farley, Vice President of Government Affairs and Business 

Partnerships, Northern Arizona University, Phoenix, Arizona. 

On April 2, 2014, the Committee on Education and the Workforce 

held a hearing in Washington, D.C., entitled ‘‘Keeping College 

Within Reach: Meeting the Needs of Contemporary Students.’’ The 

purpose of the hearing was to examine how institutions, states, and 

other entities assist contemporary college students in accessing and 

completing postsecondary education. Testifying before the committee were Dr. George A. Pruitt, President, Thomas Edison State 

College, Trenton, New Jersey; Dr. Kevin Gilligan, Chairman and 

Chief Executive Officer, Capella Education Company, Minneapolis, 

Minnesota; Mr. David Moldoff, Chief Executive Officer and Founder, AcademyOne, Inc., West Chester, Pennsylvania; Dr. Joann A. 

Boughman, Senior Vice Chancellor for Academic Affairs, University 

System of Maryland, Adelphi, Maryland; Mr. Stan Jones, President, Complete College America, Indianapolis, Indiana; and Dr. 

Brooks A. Keel, President, Georgia Southern University, 

Statesboro, Georgia. 

Legislative action—Second session 

On September 19, 2013, Rep. Matt Salmon (R–AZ), Rep. Susan 

Brooks (R–IN), and Rep. Jared Polis (D–CO) introduced H.R. 3136, 

the Advancing Competency-Based Education Demonstration Project 

Act of 2013. The bill directs the secretary of education to select institutions or consortia of institutions for voluntary participation in 

competency-based education demonstration projects that provide 

participating entities with the ability to offer competency-based 

education programs that do not meet certain statutory and regulatory requirements which would otherwise prevent them from participating in federal student aid programs. 

On July 10, 2014, the Committee on Education and the Workforce considered H.R. 3136 in legislative session and reported it favorably, as amended, to the House of Representatives by a voice 

vote. The committee considered and adopted the following amendment to H.R. 3136: 

• Rep. Matt Salmon (R–AZ) and Rep. Jared Polis (D–CO) offered an amendment in the nature of a substitute to add certain requirements to the applications to participate in a competency-based education project, allow eligible entities to submit amendments to their previously-approved applications, set 

requirements for the entities the secretary must choose to participate in the programs, require institutions to provide student information to the director of the Institute of Education 


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Sciences (IES), require the director of IES to annually evaluate 

each project and provide a report with specified information to 

the authorizing committees, authorize funds to be available 

from the amount appropriated for salaries and expenses of the 

Department of Education, and make conforming and technical 

changes to the introduced bill. The amendment was adopted by 

voice vote. 

The committee further considered the following amendment to 

H.R. 2637, which was not adopted: 

• Rep. Tierney (D–MA) offered an amendment that would 

allow students with federal student loans and private student 

loans issued prior to 2013 to refinance those loans into new 

federal loans at the interest rate set for the 2013–2014 academic year. The amendment was ruled non-germane. Rep. 

George Miller (D–CA) appealed the ruling of the chair. Rep. 

Glenn Thompson (R–PA) offered a motion to table the appeal 

of the ruling of the chair, which was adopted by a vote of 22 

to 16. 

On June 26, 2014, Rep. Virginia Foxx (R–NC) and Rep. Luke 

Messer (R–IN) introduced H.R. 4983, the Strengthening Transparency in Higher Education Act. The bill simplifies and streamlines the information made publicly available by the Secretary of 

Education regarding institutions of higher education. 

On July 10, 2014, the Committee on Education and the Workforce considered H.R. 4983 in legislative session and reported it favorably, as amended, to the House of Representatives by a voice 

vote. The committee considered and adopted the following amendment to H.R. 4983: 

• Rep. Virginia Foxx (R–NC) offered an amendment in the 

nature of a substitute to require additional information on the 

College Dashboard, require the secretary of education to conduct consumer testing in consultation with appropriate federal 

departments and agencies, ensure consumer testing addresses 

whether the College Dashboard provides useful and relevant 

information to students and families, require the secretary of 

education to submit to the authorizing committees recommendations based on the results of consumer testing, set 

new minimum requirements for net price calculators, require 

funding to come from funds already appropriated to maintain 

the College Navigator, and make other conforming and technical changes. The amendment was adopted by voice vote. 

The committee further considered the following amendment to 

H.R. 4983, which was not adopted: 

• Rep. George Miller (D–CA) offered an amendment that 

would require the commissioner of education statistics to establish a formula for determining the percentage of student 

borrowers who have completed their course of study and who 

are in repayment or in an authorized deferment period at 

three, five and 10 years after completion of a program of study. 

The amendment failed by a vote of 13 to 21. 

On June 26, 2014, Rep. Brett Guthrie (R–KY) and Rep. Richard 

Hudson (R–NC) introduced H.R. 4984, the Empowering Students 

through Enhanced Financial Counseling Act. The bill amends the 

loan counseling requirements under the Higher Education Act and 

requires counseling for Federal Pell Grant recipients. 


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On July 10, 2014, the Committee on Education and the Workforce considered H.R. 4984 in legislative session and reported it favorably, as amended, to the House of Representatives by voice vote. 

The committee considered and adopted the following amendment to 

H.R. 4984: 

• Rep. Brett Guthrie (R–KY) and Rep. Suzanne Bonamici 

(D–OR) offered an amendment in the nature of a substitute to 

remove the requirement that annual counseling for Pell Grant 

recipients be tied to disbursement of the grant, require additional information be disclosed to borrowers during annual 

counseling and exit counseling sessions, require institutions to 

provide annual counseling to borrowers receiving Parent PLUS 

loans, require any funds used to carry out the act to come from 

funds already appropriated to maintain the Financial Awareness Counseling Tool, and make conforming and technical 

changes. The amendment was adopted by voice vote. 

The committee further considered the following amendment to 

H.R. 4984, which was not adopted: 

• Rep. Susan Davis (D–CA) offered an amendment to modify 

the rule requiring for-profit colleges to receive at least 10 percent of their revenue from sources other than the Department 

of Education to remain eligible for federal student aid to include all federal aid, including veterans’ educational benefits 

and some Workforce Investment Act funds, in the 90 percent 

portion of the calculation and only private funds in the 10 percent portion of the calculation. The amendment was ruled nongermane. Rep. George Miller (D–CA) appealed the ruling of the 

chair. Rep. Glenn Thompson (R–PA) offered a motion to table 

the appeal of the ruling of the chair, which was adopted by a 

vote of 20 to 13. 

SUMMARY

The Empowering Students through Enhanced Financial Counseling Act would create a roadmap to repayment for borrowers by 

improving the timing and frequency of loan counseling and would 

ensure counseling is tailored to a borrower’s individual situation. 

The legislation ensures both student and parent borrowers have 

the most current information by requiring annual counseling before 

they sign on the dotted line. 

The legislation would require annual counseling for student borrowers to include recommendations to exhaust available grant, 

work-study, and scholarship assistance before taking out loans, as 

well as a review of all federal student loan options before considering a private loan. The counseling must also include a notice that 

borrowers are not required to accept the full amount of the loan 

they are offered and information on any outstanding federal loan 

balance the borrower may have. The legislation also would require 

counseling for borrowers of parent PLUS loans on behalf of dependent students. Similar to counseling for student borrowers, the counseling would afford parent borrowers individualized information on 

their outstanding loan balance and on anticipated monthly payments based on their actual balance. Counseling also would include 

debt management strategies, information on the National Student 

Loan Data System, and contact information for the servicer of each 

loan. 


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Additionally, the legislation would bolster exit counseling for students. Exit counseling now would include information on the borrower’s outstanding loan balance, on anticipated monthly payments 

under the standard and income-based repayment plans, on the 

grace period preceding repayment, as well as contact information 

for those organizations servicing the borrower’s loans. This information would empower borrowers to make smart financial decisions as they leave school and begin to repay their college loan 

commitments. 

The legislation also would require colleges annually to provide 

important counseling and disclosures to Pell Grant recipients. The 

counseling a Pell Grant recipient receive would address the terms 

and conditions of his or her grant, the approved educational expenses to which the grant could be applied, the maximum length 

of time a student is eligible to receive Pell Grants, the amount of 

assistance a student is eligible to receive, conditions under which 

a student may be required to repay a Pell Grant, and how a student may seek additional assistance due to a change in his or her 

financial circumstances. 

The legislation also requires the secretary of education to maintain a consumer-tested, online counseling tool that institutions 

could use to provide required counseling to their students. Institutions could choose to use this tool to provide their students financial counseling or they could offer it directly to their students, either during an in-person session or through an online tool created 

for the institution. 

COMMITTEE VIEWS

Introduction 

With tuition increasing and economic pressures faced by graduates mounting, responsibly financing a higher education has 

never been more critical. However, many students and parents are 

unprepared to navigate the complex maze of loans and grants offered by the federal government, states, the private sector, and institutions of higher education. Further, upon graduation, many borrowers also struggle to manage the repayment of the loans used to 

finance their education, leading to significant financial hardship 

and greater risk for taxpayers. Student financial literacy is vital to 

reversing this trend, yet current efforts are failing to equip students and parents with the crucial information they need to make 

wise financial decisions. 

Many students never receive meaningful financial literacy assistance as they review options for paying for college. The Higher Education Act currently requires only those students receiving federal 

student loans to complete counseling, while parents who take out 

loans on behalf of their student as well as students who receive 

only a Pell Grant do not receive any counseling. More robust and 

timely financial literacy support must be available. 

Enhancing Loan Counseling for Students 

To help students make smart decisions about financing their 

higher education, Reps. Brett Guthrie (R–KY), Richard Hudson (R– 

NC), and Suzanne Bonamici (D–WA) championed H.R. 4984, the 

Empowering Students through Enhanced Financial Counseling Act. 


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1http://www.bloomberg.com/news/2014–07–03/here-s-how-indiana-university-students-borrowed-31-million-less.html 

H.R. 4984 would improve the timing and frequency of loan counseling and would ensure students have the most current information available to them. Under current law, students who receive 

federal student loans only are required to complete one-time entrance counseling regarding the terms and conditions of their loans. 

This counseling only is required to occur prior to disbursement of 

the loan, so many students receive it after they have already decided how much to borrow. During a November 13, 2013, hearing 

entitled ‘‘Keeping College Within Reach: Simplifying Federal Student Aid,’’ the Committee on Education and the Workforce explored 

opportunities to streamline the federal aid system for students. At 

the hearing, Ms. Jennifer Mishory, deputy director of Young 

Invincibles, highlighted the need for enhanced and more frequent 

financial aid counseling: 

In a recent Young Invincibles survey, 40 percent of highdebt borrower respondents reported that they did not receive federally mandated loan counseling. It is perhaps unlikely that so many schools are out of compliance, but that 

statistic warns us that many young people benefit so little 

from loan counseling that they do not remember receiving 

it—or did not consider what they received to constitute 

counseling. 

With student loan defaults rates on the rise, the committee believes students should be given a complete picture of not only their 

rights and obligation with respect to their federal loans, but also 

the impact taking out loans may have on their financial futures 

each year—before they accept a new round of student loans. H.R. 

4984 requires loan counseling to occur annually before a student 

accepts a federal student loan for the year. The legislation also requires counseling be personalized to the individual borrower’s situation, rather than just providing general information applicable to 

a range of borrowers. In the course of just one school year, Indiana 

University was able to reduce undergraduate Stafford loan disbursements by 11 percent, or $31 million, by telling students annually what their monthly payment would be after graduation before 

they took out loans for the next year. This was more than five 

times the decrease in outlays at four-year public institutions nationally.1 The committee believes better information about loans 

and the post-college obligations and responsibilities that come with 

those loans would help students to make wise borrowing decisions. 

At the November 13, 2013, Committee on Education and the 

Workforce hearing, Jason Delisle, director of the federal education 

budget project at the New America Foundation, highlighted the 

complexity of the federal student loan program, the confusion students often face, and the need for early and improved information 

about federal student loan options. 

From the borrower’s perspective, the federal student 

loan program is unnecessarily complex, and many of its 

most important benefits are opt-in, difficult to access, or 

even hidden—and many terms and benefits overlap or cancel one another out. When a student applies for federal 


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2 http://www.ticas.org/files/pub/privatelloanlfactsltrends.pdf 3https://trends.collegeboard.org/student-aid/figures-tables/growth-federal-and-nonfederal-loansover-time 4http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/programintegrity.html 

5http://chronicle.com/blogs/headcount/new-research-points-to-gaps-in-student-loan-counseling/ 

loans, he would confront a mix of types, terms, and names. 

Some may make sense to him, others would confuse him, 

and some he may not even know exist. Would he know 

that a ‘‘Stafford’’ loan is a federal loan? Would he understand that ‘‘unsubsidized’’ doesn’t mean he is getting a bad 

deal? 

During the 2011–2012 academic year, almost half of private loan 

borrowers did not exhaust federal Stafford loan options before taking out private student loans.2 The committee is concerned about 

the growing amount of student loan debt in the country and wants 

to ensure students are aware of the potentially more favorable 

terms available with federal loans. Annual counseling would now 

include recommendations for students to exhaust available grant, 

work-study, and scholarship assistance before taking out loans, a 

review of all federal student loan options before considering a private loan, and an explanation of the rights and obligations associated with a private loan. The counseling also would include a notice that students are not required to accept the full amount of the 

federal student loan offered and information on any outstanding 

federal student loan balance the borrower may have. 

H.R. 4984 also requires bolstered exit counseling. Under current 

law, students who receive federal student loans must complete exit 

counseling before they complete their course of study. This counseling must include information on available repayment plans, debt 

management strategies, and loan forgiveness options; however, this 

counseling is very general and does not provide any information on 

the borrower’s specific situation. Under H.R. 4984, exit counseling 

would include a statement of the borrower’s outstanding loan balance; anticipated monthly payments based on the borrower’s actual 

balance under both the standard repayment plan and income-based 

repayment plan, based on the borrower’s anticipated salary; information on the grace period preceding repayment; and contact information for those organizations servicing the borrower’s loans. The 

committee believes this additional information would empower borrowers to make smarter financial decisions as they leave school 

and begin to repay their college loan commitments. 

Parent PLUS Borrowers 

Parents taking out a federal loan to help their children achieve 

the dream of a postsecondary education comprised almost 10 percent of federal student loan volume disbursed last year.3 These borrowers are subject to the majority of the same terms, conditions, 

and responsibilities as student borrowers and can borrow up to the 

cost of attendance—much more than the typical student borrower. 

However, parent borrowers currently receive very little information 

about their obligations with respect to their loan or assistance in 

planning for repayment. The committee believes providing the 

same information and disclosures to parents prior to taking out a 

loan is crucial for encouraging smart borrowing and on-time repayment. The Empowering Students through Enhanced Financial 


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4http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/programintegrity.html 

5http://chronicle.com/blogs/headcount/new-research-points-to-gaps-in-student-loan-counseling/ 

38665?cid=at&utmlsource=at&utmlmedium=en 

Counseling Act would require annual counseling for all borrowers 

of a parent PLUS loan prior to or in conjunction with the acceptance of the PLUS loan. 

This year, the U.S. Department of Education released the threeyear cohort default rates for borrowers of parent PLUS loans for 

the first time. The released rates covered a multi-year period from 

FY2006–FY2010. The most current rate for borrowers who had a 

student at any type of school was 4.1 percent, up from 1.8 percent 

in 2006.4 To put a stop to this upward trend, the committee believes these borrowers should be provided with counseling each 

year they wish to take out an additional loan. Similar to counseling 

for student borrowers, the counseling would afford parent borrowers individualized information on their outstanding loan balance and anticipated monthly payments based on the actual balance. Counseling also would include debt management strategies, 

information on the National Student Loan Data System, and contact information for the servicer of each of their loans. 

Better Information for Pell Grant Recipients 

The Empowering Students through Enhanced Financial Counseling Act would require all recipients of a Pell Grant to receive annual disclosures on the terms and conditions of their grants. The 

disclosures would include information on the approved educational 

expenses to which the grants could be applied, the conditions under 

which student may be required to repay Pell Grants, and how students may seek additional assistance due to changes in their financial circumstances. Additionally, the disclosures would provide students information on the maximum number of semesters, or the 

equivalent, for which they may be eligible to receive Pell Grants, 

as well as a statement of the actual amount of time remaining for 

which they personally may be eligible. The information would ensure students are aware of their time-limited eligibility to receive 

Pell Grants and would encourage them to complete their academic 

program prior to exhausting their eligibility for the program. The 

committee recognizes the important role the Pell Grant program 

plays in helping low-income students access and complete a postsecondary education and does not intend for this counseling to be 

a hurdle for students to receive their grant. H.R. 4984 would ensure those students are armed with the knowledge needed to use 

their Pell Grant eligibility in the most effective way possible. 

Developing a Consumer-Tested Online Tool 

A recent research study on federally mandated student loan 

counseling, during which researchers studied actual borrowers 

going through the federal government’s online counseling tool, 

found borrowers thought the tool to be too text heavy and wanted 

more personalized information.5 The committee appreciates the 

work the U.S. Department of Education has done in creating the 

Financial Awareness Counseling tool, but believes more can be 

done to make the tool more relevant and meaningful for borrowers. 

The Empowering Students through Enhanced Financial Counseling 

Act requires the secretary of education to maintain an online counVerDate Mar 15 2010 06:41 Jul 18, 2014 Jkt 039006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6602 E:\HR\OC\HR531.XXX HR531

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seling tool institutions could use to provide required counseling to 

their students. The committee expects the department would build 

upon the existing tool to meet this requirement of the legislation. 

Additionally, H.R. 4984 requires the department to conduct consumer testing of the online financial aid counseling tools, in consultation with other relevant federal agencies, to ensure the information provided through the tools is presented in the most userfriendly manner possible, which would better assist students and 

parents in understanding their rights and obligations with respect 

to borrowing student loans or receiving Pell Grants. 

Recognizing some institutions already provide their students 

with robust loan counseling, H.R. 4984 allows institutions to choose 

the manner in which they provide counseling to their students and 

parents. Institutions would have the option to provide financial 

counseling directly, either during an in-person session or through 

an online tool created for or by the institution, or an institution 

could elect to have the students use the consumer-tested online tool 

administered by the U.S. Department of Education. If an institution opts to provide the counseling themselves, the committee notes 

an institution could meet the requirements under H.R. 4984 by 

contracting with entities that have experience in offering this type 

of counseling to students, such as guaranty agencies. If an institution chooses to use the department’s online tool, the department 

would then be responsible for keeping a record of which individuals 

have completed counseling and notifying borrowers of the obligation to complete the counseling. 

Conclusion 

The current financial counseling requirements are inadequate for 

providing student and parent borrowers with the information they 

need to plan for college costs and responsibly manage their loan repayment. Currently, counseling occurs too late to guide students’ 

decisions for smart borrowing and too infrequently to make a lasting impression about the implications of student debt. The Empowering Students through Enhanced Financial Counseling Act would 

provide students and parents the tools and information they need 

to borrow and repay their student loans in a responsible way. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

States the short title is the Empowering Students through Enhanced Financial Counseling Act. 

Section 2. Annual counseling 

Amends section 485(l) of the Higher Education Act to require institutions ensure each individual who receives a federal student 

loan also receives interactive annual counseling on the terms, conditions, and responsibilities of such loan. Pell Grant recipients likewise would receive annual counseling on the terms, conditions, and 

responsibilities of their grants. 

Requires institutions to ensure, as a part of carrying out the 

counseling requirements, all federal student loan borrowers annually affirmatively accept new loans prior to the disbursement of 

those loans. 


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Section 3. Exit counseling 

Amends section 485(b) of the Higher Education Act to ensure 

students who receive federal student loans receive individualized, 

interactive exit counseling regarding their loan portfolios and repayment options. 

Section 4. Online counseling tools 

Requires the secretary of education to maintain consumer-tested 

online counseling tools that provide the required annual and exit 

counseling. 

EXPLANATION OF AMENDMENTS

The amendments, including the amendment in the nature of a 

substitute, are explained in the body of this report. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch. H.R. 4984 promotes financial literacy through enhanced counseling for recipients 

of federal financial aid. 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement of whether the 

provisions of the reported bill include unfunded mandates. This 

issue is addressed in the CBO letter. 

EARMARK STATEMENT

H.R. 4984 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of 

House rule XXI. 

ROLL CALL VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee Report to include for each record vote 

on a motion to report the measure or matter and on any amendments offered to the measure or matter the total number of votes 

for and against and the names of the Members voting for and 

against. 


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STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause (3)(c) of House rule XIII, the goal of 

H.R. 4984 is to promote financial literacy through enhanced counseling for recipients of federal financial aid. 

DUPLICATION OF FEDERAL PROGRAMS

No provision of H.R. 4984 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULE MAKINGS

The committee estimates that enacting H.R. 4984 does not specifically direct the completion of any specific rule makings within 

the meaning of 5 U.S.C. 551. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the committee’s oversight findings and recommendations are reflected in the 

body of this report. 

NEW BUDGET AUTHORITY AND CBO COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the 

committee has received the following estimate for H.R. 4984 from 

the Director of the Congressional Budget Office: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 15, 2014. 

Hon. JOHN KLINE, Chairman, Committee on Education and the Workforce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4984, the Empowering 

Students Through Enhanced Financial Counseling Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Justin Humphrey. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 


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H.R. 4984—Empowering Students Through Enhanced Financial 

Counseling Act 

H.R. 4984 would reserve $2 million from funding for the Department of Education to change the requirements for the counseling 

of students who participate in the federal student aid programs, 

such as federal student loans and Pell grants. 

CBO estimates that implementing H.R. 4984 would require $2 

million for administrative costs for the department over the 2015– 

2019 period, assuming the availability of appropriated funds. 

Enacting the bill would not affect direct spending or revenues; 

therefore, pay-as-you-go procedures do not apply. 

H.R. 4984 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Justin Humphrey. 

This estimate was approved by Peter H. Fontaine, Assistant Director for Budget Analysis. 

COMMITTEE COST ESTIMATE

Clause 3(d)(1) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison of the costs 

that would be incurred in carrying out H.R. 4984. However, clause 

3(d)(2)(B) of that rule provides that this requirement does not 

apply when the committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional 

Budget Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

HIGHER EDUCATION ACT OF 1965 

* * * * * * * 

TITLE IV—STUDENT ASSISTANCE 

* * * * * * * 

PART G—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE

PROGRAMS

* * * * * * * 

SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION 

FOR STUDENTS. 

(a) * * * 

(b) EXIT COUNSELING FOR BORROWERS.—(1)(A) Each eligible institution shall, øthrough financial aid offices or otherwise¿ 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 (n)(1)(A), provide counseling to 


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borrowers of loans that are made, insured, or guaranteed under 

part B (other than loans made pursuant to section 428C or loans 

under section 428B made on behalf of a student) or made under 

part D (other than Federal Direct Consolidation Loans or Federal 

Direct PLUS Loans made on behalf of a student) or made under 

part E of this title prior to the completion of the course of study 

for which the borrower enrolled at the institution or at the time of 

departure from such institution. The counseling required by this 

subsection shall include— 

(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; 

ø(i)¿ (iv) information on the repayment plans available, including a description of the different features øof each plan¿ of 

at least the standard repayment plan and the income-based repayment plan under section 493C and øsample information 

showing the average¿ information, based on the borrower’s outstanding balance described in clause (i), showing the borrower’s 

anticipated monthly payments, and the difference in interest 

paid and total payments, under each plan; 

ø(ii)¿ (v) debt management strategies that are designed to facilitate the repayment of such indebtedness; 

ø(iii)¿ (vi) an explanation that the borrower has the options 

to prepay each loan, pay each loan on a shorter schedule, and 

change repayment plans; 

ø(iv)¿ (vii) for any loan forgiveness or cancellation provision 

of this title, a general description of the terms and conditions 

under which the borrower may obtain full or partial forgiveness or cancellation of the principal and interest, and a copy 

of the information provided by the Secretary under section 

485(d); 

ø(v)¿ (viii) for any forbearance provision of this title, a general description of the terms and conditions under which the 

borrower may defer repayment of principal or interest or be 

granted forbearance, and a copy of the information provided by 

the Secretary under section 485(d); 

ø(vi)¿ (ix) the consequences of defaulting on a loan, including 

adverse credit reports, delinquent debt collection procedures 

under Federal law, and litigation; 

ø(vii)¿ (x) information on the effects of using a øconsolidation 

loan under section 428C or a¿ Federal Direct Consolidation 

Loan to discharge the borrower’s loans under parts B, D, and 

E, including at a minimum— 

(I) * * * 

* * * * * * * 

ø(viii)¿ (xi) a general description of the types of tax benefits 

that may be available to borrowers; øand¿ 


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ø(ix)¿ (xii) a notice to borrowers about the availability of the 

National Student Loan Data System and how the system can 

be used by a borrower to obtain information on the status of 

the borrower’s loans; øand¿ 

(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; and 

(xiv) an explanation that an individual has a right to annually request a disclosure of information collected by a consumer 

reporting agency pursuant to section 612(a) of the Fair Credit 

Reporting Act (15 U.S.C. 1681j(a)). 

(B) In the case of borrower who leaves an institution without the 

prior knowledge of the institution, the institution shall attempt to 

provide the information described in subparagraph (A) to the student online or in writing, except that in the case of an institution 

using the online counseling tool described in subsection (n)(1)(A), 

the Secretary shall attempt to provide such information to the student in the manner described in subsection (n)(3)(C). (2)(A) * * * 

* * * * * * * 

(C) Nothing in this subsection shall be construed to prohibit an 

institution of higher education from utilizing electronic means, such as the online counseling tool described in subsection (n)(1)(A), 

to provide personalized exit counseling. 

* * * * * * * 

ø(l) ENTRANCE COUNSELING FOR BORROWERS.— ø(1) DISCLOSURE REQUIRED PRIOR TO DISBURSEMENT.— ø(A) IN GENERAL.—Each eligible institution shall, at or 

prior to the time of 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 made 

under part D (other than a Federal Direct Consolidation 

Loan or a Federal Direct PLUS loan made on behalf of a 

student), ensure that the borrower receives comprehensive 

information on the terms and conditions of the loan and of 

the responsibilities the borrower has with respect to such 

loan in accordance with paragraph (2). Such information— 

ø(i) shall be provided in a simple and understandable manner; and 

ø(ii) may be provided— 

ø(I) during an entrance counseling session conduction in person; 

ø(II) on a separate written form provided to the 

borrower that the borrower signs and returns to 

the institution; or 

ø(III) online, with the borrower acknowledging 

receipt of the information. 

ø(B) USE OF INTERACTIVE PROGRAMS.—The Secretary 

shall encourage institutions to carry out the requirements 

of subparagraph (A) through the use of interactive programs that test the borrower’s understanding of the terms 

and conditions of the borrower’s loans under part B or D, 


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using simple and understandable language and clear formatting. 

ø(2) INFORMATION TO BE PROVIDED.—The information to be 

provided to the borrower under paragraph (1)(A) shall include 

the following: 

ø(A) To the extent practicable, the effect of accepting the 

loan to be disbursed on the eligibility of the borrower for 

other forms of student financial assistance. 

ø(B) An explanation of the use of the master promissory 

note. 

ø(C) Information on how interest accrues and is capitalized during periods when the interest is not paid by either 

the borrower or the Secretary. 

ø(D) In the case of a loan made under section 428B or 

428H, a Federal Direct PLUS Loan, or a Federal Direct 

Unsubsidized Stafford Loan, the option of the borrower to 

pay the interest while the borrower is in school. 

ø(E) The definition of half-time enrollment at the institution, during regular terms and summer school, if applicable, and the consequences of not maintaining half-time 

enrollment. 

ø(F) An explanation of the importance of contacting the 

appropriate offices at the institution of higher education if 

the borrower withdraws prior to completing the borrower’s 

program of study so that the institution can provide exit 

counseling, including information regarding the borrower’s 

repayment options and loan consolidation. 

ø(G) Sample monthly repayment amounts based on— 

ø(i) a range of levels of indebtedness of— 

ø(I) borrowers of loans under section 428 or 

428H; and 

ø(II) as appropriate, graduate borrowers of 

loans under section 428, 428B, or 428H; or 

ø(ii) the average cumulative indebtedness of other 

borrowers in the same program as the borrower at the 

same institution. 

ø(H) The obligation of the borrower to repay the full 

amount of the loan, regardless of whether the borrower 

completes or does not complete the program in which the 

borrower is enrolled within the regular time for program 

completion. 

ø(I) The likely consequences of default on the loan, including adverse credit reports, delinquent debt collection 

procedures under Federal law, and litigation. 

ø(J) Information on the National Student Loan Data 

System and how the borrower can access the borrower’s 

records. 

ø(K) The name of and contact information for the individual the borrower may contact if the borrower has any 

questions about the borrower’s rights and responsibilities 

or the terms and conditions of the loan.¿ 

(l) ANNUAL FINANCIAL AID COUNSELING.— (1) ANNUAL DISCLOSURE REQUIRED.— 

(A) IN GENERAL.—Each eligible institution shall ensure 

that each individual who receives a Federal Pell Grant or 


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a loan made under part D (other than a Federal Direct 

Consolidation Loan) receives comprehensive information on 

the terms and conditions of such Federal Pell Grant or loan 

and the responsibilities the individual has with respect to 

such Federal Pell Grant or loan. Such information shall be 

provided, for each award year for which the individual receives such Federal Pell Grant or loan, in a simple and understandable manner— 

(i) during a counseling session conducted in person; 

(ii) online, with the borrower acknowledging receipt 

of the information; or 

(iii) through the use of the online counseling tool described in subsection (n)(1)(B). 

(B) USE OF INTERACTIVE PROGRAMS.—In the case of institutions not using the online counseling tool described in 

subsection (n)(1)(B), the Secretary shall require such institutions to carry out the requirements of subparagraph (A) 

through the use of interactive programs, during an annual 

counseling session that is in-person or online, that test the 

individual’s understanding of the terms and conditions of 

the Federal Pell Grant or loan awarded to the student, 

using simple and understandable language and clear formatting. 

(2) ALL INDIVIDUALS.—The information to be provided under 

paragraph (1)(A) to each individual receiving counseling under 

this subsection shall include the following: 

(A) 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. 

(B) An explanation that an individual has a right to annually request a disclosure of information collected by a 

consumer reporting agency pursuant to section 612(a) of the 

Fair Credit Reporting Act (15 U.S.C. 1681j(a)). 

(3) STUDENTS RECEIVING FEDERAL PELL GRANTS.—The information to be provided under paragraph (1)(A) to each student 

receiving a Federal Pell Grant shall include the following: 

(A) An explanation of the terms and conditions of the 

Federal Pell Grant. 

(B) An explanation of approved educational expenses for 

which the student may use the Federal Pell Grant. 

(C) An explanation of why the 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 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. 

(4) BORROWERS RECEIVING LOANS MADE UNDER PART D

(OTHER THAN PARENT PLUS LOANS).—The information to be provided under paragraph (1)(A) to a borrower of a loan made 


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under part D (other than a Federal Direct PLUS Loan made on 

behalf of a dependent student) shall include the following: 

(A) To the extent practicable, the effect of accepting the 

loan to be disbursed on the eligibility of the borrower for 

other forms of student financial assistance. 

(B) An explanation of the use of the master promissory 

note. 

(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 workstudy 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, an explanation that Federal student loans typically offer better terms and conditions than private loans, 

and an explanation that if a borrower decides to take out 

a private education loan— 

(i) the borrower has the ability to select a private 

educational lender of the borrower’s choice; 

(ii) the proposed private education loan may impact 

the borrower’s potential eligibility for other financial 

assistance, including Federal financial assistance 

under this title; and 

(iii) the borrower has a right— 

(I) to accept the terms of the private education 

loan within 30 calendar days following the date on 

which the application for such loan is approved 

and the borrower receives the required disclosure 

documents, pursuant to section 128(e)(6) of the 

Truth in Lending Act; and 

(II) to cancel such loan within 3 business days 

of the date on which the loan is consummated, 

pursuant to section 128(e)(7) of such Act. 

(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. 

(H) Information on how interest accrues and is capitalized during periods when the interest is not paid by either 

the borrower or the Secretary. 

(I) In the case of a Federal Direct PLUS Loan or a Federal Direct Unsubsidized Stafford Loan, the option of the 

borrower to pay the interest while the borrower is in school. 

(J) The definition of half-time enrollment at the institution, during regular terms and summer school, if applicable, and the consequences of not maintaining at least halftime enrollment. 

(K) An explanation of the importance of contacting the 

appropriate offices at the institution of higher education if 

the borrower withdraws prior to completing the borrower’s 

program of study so that the institution can provide exit 


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34 

counseling, including information regarding the borrower’s 

repayment options and loan consolidation. 

(L) For a first-time borrower, the anticipated monthly 

payment amount under, at minimum, a standard repayment plan and, using the regionally available data from 

the Bureau of Labor Statistics of the average starting salary for the occupation the borrower intends to be employed, 

an income-based repayment plan under section 493C, and 

based on— 

(i) a range of levels of indebtedness of— 

(I) borrowers of Federal Direct Stafford Loans or 

Federal Direct Unsubsidized Stafford Loans; and 

(II) as appropriate, graduate borrowers of Federal Direct PLUS Loans or Federal Direct Unsubsidized Stafford Loans; or 

(ii) the average cumulative indebtedness at graduation for students who borrowed loans made under part 

D and who are in the same program of study as the 

borrower. 

(M) For a borrower with an outstanding balance of principal or interest due on a loan made under this title— 

(i) a current statement of the amount of such outstanding balance and interest accrued; 

(ii) based on such outstanding balance, the anticipated monthly payment amount under, at minimum, 

the standard repayment plan and, using regionally 

available data from the Bureau of Labor Statistics of 

the average starting salary for the occupation the borrower intends to be employed, an income-based repayment plan under section 493C; and 

(iii) an estimate of the projected monthly payment 

amount under each repayment plan described in clause 

(ii), based on— 

(I) the outstanding balance described in clause 

(i); 

(II) the anticipated outstanding balance on the 

loan for which the student is receiving counseling 

under this subsection; and 

(III) a projection for any other loans made under 

part D that the borrower is reasonably expected to 

accept during the borrower’s program of study 

based on at least the expected increase in the cost 

of attendance of such program. 

(N) The obligation of the borrower to repay the full 

amount of the loan, regardless of whether the borrower 

completes or does not complete the program in which the 

borrower is enrolled within the regular time for program 

completion. 

(O) The likely consequences of default on the loan, including adverse credit reports, delinquent debt collection 

procedures under Federal law, and litigation, and a notice 

of the institution’s most recent cohort default rate (defined 

in section 435(m)), an explanation of the cohort default 

rate, and the most recent national average cohort default 


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35 

rate for the category of institution described in section 

435(m)(4) to which the institution belongs. 

(P) Information on the National Student Loan Data System and how the borrower can access the borrower’s 

records. 

(Q) The contact information for the institution’s financial 

aid office or other appropriate office at the institution the 

borrower may contact if the borrower has any questions 

about the borrower’s rights and responsibilities or the terms 

and conditions of the loan. 

(5) BORROWERS RECEIVING PARENT PLUS LOANS FOR DEPENDENT STUDENTS.—The information to be provided under paragraph (1)(A) to a borrower of a Federal Direct PLUS Loan 

made on behalf of a dependent student shall include the following: 

(A) The information described in subparagraphs (A) 

through (C) and (N) through (Q) of paragraph (4). 

(B) The option of the borrower to pay the interest on the 

loan while the loan is in deferment. 

(C) For a first-time borrower of such loan, sample monthly repayment amounts under the standard repayment plan 

based on— 

(i) a range of levels of indebtedness of borrowers of 

Federal Direct PLUS Loans made on behalf of a dependent student; or 

(ii) the average cumulative indebtedness of other borrowers of Federal Direct PLUS Loans made on behalf 

of dependent students who are in the same program of 

study as the student on whose behalf the borrower borrowed the loan. 

(D) For a borrower with an outstanding balance of principal or interest due on such loan— 

(i) a statement of the amount of such outstanding 

balance; 

(ii) based on such outstanding balance, the anticipated monthly payment amount under the standard repayment plan; and 

(iii) an estimate of the projected monthly payment 

amount under the standard repayment plan, based 

on— 

(I) the outstanding balance described in clause 

(i); 

(II) the anticipated outstanding balance on the 

loan for which the borrower is receiving counseling 

under this subsection; and 

(III) a projection for any other Federal Direct 

PLUS Loan made on behalf of the dependent student that the borrower is reasonably expected to 

accept during the program of study of such student 

based on at least the expected increase in the cost 

of attendance of such program. 

(E) Debt management strategies that are designed to facilitate the repayment of such indebtedness. 


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(F) An explanation that the borrower has the options to 

prepay each loan, pay each loan on a shorter schedule, and 

change repayment plans. 

(G) For each Federal Direct PLUS Loan made on behalf 

of a dependent student 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. 

(6) ANNUAL LOAN ACCEPTANCE.—Prior to making the first disbursement of a loan made under part D (other than a Federal 

Direct Consolidation Loan) 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). 

* * * * * * * 

(n) 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; and 

(B) an online counseling tool that provides the annual 

counseling required under subsection (l) 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 that each such tool is— 

(A) consumer tested, in consultation with other relevant 

Federal agencies, to ensure that the tool is effective in helping individuals understand their rights and obligations 

with respect to borrowing a loan made under part D or receiving a Federal Pell Grant; 

(B) understandable to students receiving Federal Pell 

Grants and borrowers of loans made under part D; and 

(C) 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 individuals have received counseling using the tool, and notify the applicable 

institutions of the individual’s completion of such counseling; 

(B) in the case of a borrower who receives annual counseling for a loan made under part D using the tool described in paragraph (1)(B), notify the borrower by when 

the borrower should accept, in a manner described in secVerDate Mar 15 2010 06:41 Jul 18, 2014 Jkt 039006 PO 00000 Frm 00036 Fmt 6659 Sfmt 6603 E:\HR\OC\HR531.XXX HR531

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37 

tion 485(l)(6), the loan for which the borrower has received 

such counseling; and 

(C) in the case of a borrower 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 borrower through such 

tool. 

* * * * * * * 


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(38) 

MINORITY VIEWS 

We support and concur with the Majority views on H.R. 4984. 

Unfortunately, this bill does not go far enough to protect all students, and particularly veterans, because it fails to address a major 

loophole in HEA that allows institutions to exploit their GI benefits. That is why Democrats offered an amendment, which was rejected by the Majority, to help protect our veterans. 

The amendment, offered by Congresswoman Davis and Congressman Takano, closes the loophole in the 90/10 rule and will go a 

long way to end unscrupulous practices of some nefarious for-profit 

colleges. 

The 90/10 rule was designed to provide market incentives to forprofit institutions, in order to perform competitively with other private colleges and universities. 

The 90/10 rule mandates that for-profit colleges obtain at least 

10 percent of their revenue from non-federal sources as a measure 

of program quality. But a loophole in the rule allows federal education benefits provided to veterans through the GI Bill, veteran 

tuition assistance, and other federal assistance to be treated as private dollars. This loophole has given some for-profit colleges a 

strong incentive to predatorily target our nation’s service members 

and try to squeeze them for their military benefits. 

Further, colleges with higher levels of revenues from non-federal 

sources have higher graduation rates and lower student loan defaults than colleges that rely almost exclusively on federal funding. 

According to Holly Petraeus, the assistant director at the Consumer Financial Protection Bureau’s Office of Servicemember Affairs, this loophole has been a ‘‘lucrative target for exploitation’’ by 

for-profit colleges, and has resulted in ‘‘aggressive and deceptive’’ 

targeting of service members in order to meet their 90/10 requirements. 

It has also been reported that colleges have encouraged veterans 

to take out more expensive private loans rather than federal loans 

with more affordable interest rates. Others have engaged in ‘‘misleading recruiting practices’’ on military installations. 

In sum, the current loophole undermines the integrity of the 90/ 

10 rule, and as Holly Petraeus said, is putting our brave veterans 

‘‘under siege’’ from nefarious for-profit colleges through aggressive 

and misleading marketing. 

Democrats believe that this is unacceptable. We have a responsibility to taxpayers and to our veterans to fix this problem and we 

can only do that with an act of Congress. Democrats will continue 

to work to make college more affordable and accessible, increase 

oversight and quality assurance of colleges and loan servicers, and 

to promote new and innovative practices that can reduce student 

loan debt. 

GEORGE MILLER. 


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39 

JARED POLIS. ROBERT C. ‘‘BOBBY’’ SCOTT. MARK TAKANO. TIMOTHY H. BISHOP. RUSH HOLT. RAU ́ L M. GRIJALVA. SUZANNE BONAMICI. FREDERICA S. WILSON. JOE COURTNEY. GREGORIO KILILI SABLAN. SUSAN A. DAVIS. RUBE ́ N HINOJOSA. 

MARCIA L. FUDGE. 

MARK POCAN. 

JOHN F. TIERNEY. 

Æ 


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