II 

115TH CONGRESS 

1ST SESSION S. 2224 

To establish best practices for teaching financial literacy, and to establish 

an annual estimate of student borrowing costs. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 13, 2017 

Mr. DONNELLY (for himself, Mr. JOHNSON, and Ms. KLOBUCHAR) introduced 

the following bill; which was read twice and referred to the Committee 

on Health, Education, Labor, and Pensions 

A BILL 

To establish best practices for teaching financial literacy, 

and to establish an annual estimate of student borrowing 

costs. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Empowering Student 

5 Borrowers Act’’. 


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1 SEC. 2. BEST PRACTICES FOR TEACHING FINANCIAL LIT2 ERACY. 

3 Part C of title I of the Higher Education Act of 1965 

4 (20 U.S.C. 1015 et seq.) is amended by adding at the end 

5 the following: 

6 ‘‘SEC. 138. BEST PRACTICES FOR TEACHING FINANCIAL LIT7 ERACY. 

8 ‘‘(a) BEST PRACTICES.— 

9 ‘‘(1) IN GENERAL.—After soliciting public com10 ments and consulting with and receiving input from 

11 relevant parties, including a diverse set of institu12 tions of higher education and other parties, the Sec13 retary shall, by not later than 1 year after the date 

14 of enactment of the Empowering Student Borrowers 

15 Act, establish best practices for institutions of high16 er education regarding methods to— 

17 ‘‘(A) teach financial literacy skills; and 

18 ‘‘(B) provide useful and necessary informa19 tion to assist students at institutions of higher 

20 education when making financial decisions re21 lated to student borrowing. 

22 ‘‘(2) BEST PRACTICES.—The best practices de23 scribed in paragraph (1) shall include the following: 

24 ‘‘(A) Methods to ensure that students have 

25 a clear sense of the students’ total borrowing 


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1 obligations, including monthly payments, and 

2 repayment options. 

3 ‘‘(B) The most effective ways to engage 

4 students in financial literacy education, includ5 ing frequency and timing of communication 

6 with students. 

7 ‘‘(C) Information on how to target dif8 ferent student populations, including part-time 

9 students, first-time students, and other non10 traditional students. 

11 ‘‘(D) Ways to clearly communicate the im12 portance of graduating on a student’s ability to 

13 repay student loans. 

14 ‘‘(b) MAINTENANCE OF BEST PRACTICES.—The Sec15 retary shall maintain and periodically update the best 

16 practices information required under subsection (a) and 

17 make the best practices available to the public.’’. 

18 SEC. 3. ANNUAL ESTIMATE OF STUDENT LOAN BORROWING 

19 COSTS. 

20 Section 485 of the Higher Education Act of 1965 (20 

21 U.S.C. 1092) is amended by adding at the end the fol22 lowing: 

23 ‘‘(n) ANNUAL ESTIMATE OF STUDENT LOAN BOR24 ROWING COSTS.— 


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1 ‘‘(1) IN GENERAL.—Beginning on July 1, 2019, 

2 each eligible institution shall provide a cost estimate 

3 described in paragraph (2) to each enrolled student 

4 who receives an education loan to attend the institu5 tion, not later than 30 days before the first day of 

6 each academic year beginning after the academic 

7 year for which the student first received such a loan 

8 to attend such institution. 

9 ‘‘(2) CONTENTS OF ESTIMATE.—The estimate 

10 under paragraph (1) shall contain the following in11 formation: 

12 ‘‘(A) CUMULATIVE BALANCES AND MONTH13 LY PAYMENTS.—A notice to the student of— 

14 ‘‘(i) the cumulative balance of edu15 cation loans owed by the student as of the 

16 date of the notice; and 

17 ‘‘(ii) projected monthly payment 

18 amounts based on the cumulative balances 

19 described in clause (i), assuming a stand20 ard repayment schedule. 

21 ‘‘(B) INTEREST RATES.—The interest rate 

22 of each education loan, except that interest 

23 rates for a private education loan may be based 

24 on average private education loan interest rates 


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1 if the institution cannot reasonably determine 

2 the actual interest rate of such loan. 

3 ‘‘(C) DISCLAIMER.—A clear and con4 spicuous notice stating that any information 

5 provided under paragraph (1) is an estimate, 

6 accurate to the best of the institution’s knowl7 edge, and that an interest rate provided under 

8 subparagraph (B)— 

9 ‘‘(i) in the case of a loan described in 

10 paragraph (6)(A)(i), is the applicable rate 

11 of interest of such loan; 

12 ‘‘(ii) in the case of a private education 

13 loan, may be based on average private edu14 cation loan interest rates; and 

15 ‘‘(iii) does not include private edu16 cation loans of which the institution is not 

17 aware. 

18 ‘‘(3) FORM OF ESTIMATE.—The estimate under 

19 paragraph (1) shall be— 

20 ‘‘(A) provided to the student in hard copy 

21 format on the letterhead of the institution, by 

22 electronic mail or by another method the Sec23 retary may prescribe; and 


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1 ‘‘(B) delivered to the student separately 

2 from any other disclosures required under this 

3 Act. 

4 ‘‘(4) LIMITATION OF LIABILITY.—An institution 

5 that provides the estimate under paragraph (1) in 

6 good faith shall not be liable to any person for inac7 curacies contained in such estimate. 

8 ‘‘(5) STUDENT DEBT LETTER TEMPLATE.—Not 

9 later than July 1, 2018, and as necessary thereafter, 

10 the Secretary shall provide the following to eligible 

11 institutions: 

12 ‘‘(A) Examples of the information required 

13 under subparagraphs (A), (B), and (C) of para14 graph (2). 

15 ‘‘(B) Technical assistance on how to com16 ply with the requirements of this subsection. 

17 ‘‘(C) Preliminary approvals in a timely 

18 manner of estimate formats proposed for use by 

19 an institution, at the request of the institution. 

20 ‘‘(D) The formula (which shall take into 

21 consideration a student’s past borrowing rates 

22 and other criteria the Secretary may determine) 

23 to be used in making the projections under 

24 clauses (i) and (ii) of paragraph (2)(A) with re25 spect to loans described in paragraph (6)(A)(i). 


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1 ‘‘(E) Encryption technology software to en2 able institutions to provide the estimate under 

3 paragraph (2) to students in a secure format 

4 for institutions that choose to provide the esti5 mate to students in an electronic format. 

6 ‘‘(6) DEFINITIONS.—In this subsection: 

7 ‘‘(A) EDUCATION LOAN.—The term ‘edu8 cation loan’ means— 

9 ‘‘(i) a loan made under part D (other 

10 than a Federal Direct Consolidation Loan 

11 or a Federal Direct PLUS loan made on 

12 behalf of a student); 

13 ‘‘(ii) a loan made under a State-spon14 sored loan program for the purpose of pay15 ing a student’s cost of attendance at an in16 stitution of higher education; and 

17 ‘‘(iii) a private education loan with re18 spect to which the institution should rea19 sonably be aware. 

20 ‘‘(B) PRIVATE EDUCATION LOAN.—The 

21 term ‘private education loan’ has the meaning 

22 given the term in section 140 of the Truth in 

23 Lending Act. 

24 ‘‘(C) STUDENT.—The term ‘student’, when 

25 used with respect to an eligible institution, does 


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1 not include any student who has transferred to 

2 the institution less than 60 days before the first 

3 day of the academic year for which an estimate 

4 would be provided.’’. 

5 SEC. 4. ANNUAL PROVISION OF INFORMATION BY THE SEC6 RETARY OF EDUCATION. 

7 Not later than April 1, 2019, and annually thereafter, 

8 the Secretary of Education shall provide to each institu9 tion (as defined in section 102 of the Higher Education 

10 Act of 1965 (20 U.S.C. 1002)) the following information: 

11 (1) The amount of any loans made under part 

12 D of title IV of the Higher Education Act of 1965 

13 (20 U.S.C. 1087a et seq.) (other than a Federal Di14 rect Consolidation Loan or a Federal Direct PLUS 

15 loan made on behalf of a student) expected to be 

16 disbursed to any borrower enrolled in that institu17 tion for the next academic year. 

18 (2) The projected cumulative balance of such 

19 loans, as determined in accordance with section 

20 485(n)(5)(D) of such Act (20 U.S.C. 

21 1092(n)(5)(D)), as added by this Act, that will be 

22 owed by each borrower that is enrolled in the insti23 tution after the completion of the borrower’s course 

24 of study at the institution of higher education. 


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1 (3) The projected monthly payment amounts of 

2 such loans, as determined in accordance with section 

3 485(n)(5) of the Higher Education Act of 1965 (20 

4 U.S.C. 1092(n)(5)), assuming a standard repayment 

5 schedule (as described in section 455(d)(1)(A) of 

6 such Act (20 U.S.C. 1087e(d)(1)(A))). 

Æ 


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