I 

113TH CONGRESS 

2D SESSION H. R. 4480 

To amend adverse credit history determinations for purposes of Federal 

Direct PLUS Loan eligibility. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 10, 2014 

Mr. RICHMOND (for himself, Mr. AL GREEN of Texas, Mr. HASTINGS of Florida, Mr. CARSON of Indiana, Ms. LEE of California, Mr. THOMPSON of 

Mississippi, Mr. RUSH, Mr. FATTAH, Ms. BROWN of Florida, Mr. DANNY

K. DAVIS of Illinois, Mr. DAVID SCOTT of Georgia, Mr. PAYNE, Mrs. 

CHRISTENSEN, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. NORTON, 

Mr. CUMMINGS, Mr. CLEAVER, Ms. WILSON of Florida, Mr. 

BUTTERFIELD, Mr. MEEKS, Ms. MOORE, Mr. JEFFRIES, Mr. JOHNSON

of Georgia, Ms. JACKSON LEE, Mr. CLYBURN, Mr. CONYERS, Mrs. 

BEATTY, Ms. BASS, Mr. ELLISON, Mr. VEASEY, Ms. FUDGE, Ms. 

WATERS, Mr. CLAY, Ms. KELLY of Illinois, Mr. BISHOP of Georgia, Ms. 

SEWELL of Alabama, and Ms. CLARKE of New York) introduced the following bill; which was referred to the Committee on Education and the 

Workforce 

A BILL 

To amend adverse credit history determinations for purposes 

of Federal Direct PLUS Loan eligibility. 

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 ‘‘Protecting Educational 

5 Loans for Underserved Students Act’’. 

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1 SEC. 2. ADVERSE CREDIT HISTORY DETERMINATIONS FOR 

2 FEDERAL DIRECT PLUS LOAN ELIGIBILITY. 

3 Section 455 of the Higher Education Act of 1965 (20 

4 U.S.C. 1087e) is amended by adding at the end the fol5 lowing: 

6 ‘‘(r) FEDERAL DIRECT PLUS LOANS.— 

7 ‘‘(1) IN GENERAL.—Beginning July 1, 2014, in 

8 determining the eligibility of a student to borrow 

9 Federal Direct PLUS Loans, the Secretary shall de10 termine whether the student has an adverse credit 

11 history in accordance with paragraph (2). 

12 ‘‘(2) DETERMINATION OF ADVERSE CREDIT

13 HISTORY.—In determining whether a student has an 

14 adverse credit history for purposes of paragraph (1), 

15 the Secretary— 

16 ‘‘(A) shall obtain a credit report on the 

17 student from at least one consumer reporting 

18 agency described under section 603(p) of the 

19 Fair Credit Reporting Act (15 U.S.C. 

20 1681a(p)) and within a timeframe that would 

21 ensure the most accurate, current representa22 tion of the student’s credit history before the 

23 first day of the period of enrollment for which 

24 the loan is intended; 

25 ‘‘(B) unless the Secretary determines that 

26 the student has extenuating circumstances, 

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1 shall consider that a student has an adverse 

2 credit history based on the student’s credit re3 port, if— 

4 ‘‘(i) the student is considered 90 or 

5 more days delinquent on the repayment of 

6 a debt exceeding $2,000; or 

7 ‘‘(ii) during the 3 years before the 

8 date of the credit report, the student has 

9 been the subject of a— 

10 ‘‘(I) default determination; 

11 ‘‘(II) bankruptcy discharge; 

12 ‘‘(III) foreclosure; 

13 ‘‘(IV) repossession; 

14 ‘‘(V) tax lien; 

15 ‘‘(VI) wage garnishment; or 

16 ‘‘(VII) write-off of a debt under 

17 this title; 

18 ‘‘(C) shall not consider a student with debt 

19 that is unrelated to loans made under this title 

20 and that, as of the date of the student’s credit 

21 report, are in collections or have been charged 

22 off, to have an adverse credit history and shall 

23 not deny a Federal Direct PLUS Loan to the 

24 student for having such debt; 

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1 ‘‘(D) shall require that any student de2 scribed in subparagraph (C) or a student who 

3 has been the subject of 1 or more of the actions 

4 described in subclauses (I) through (VII) of 

5 subparagraph (B)(ii) during a period ending 

6 more than 3 years before the date of the stu7 dent’s credit report, to participate in loan coun8 seling provided by the applicable institution of 

9 higher education as a condition of being eligible 

10 to receive a Federal Direct PLUS Loan; 

11 ‘‘(E) shall not consider a student with no 

12 credit history as an individual with an adverse 

13 credit history, and shall not use a student’s ab14 sence of credit history as a reason to deny a 

15 Federal Direct PLUS Loan to such student; 

16 ‘‘(F) shall retain a record of the Sec17 retary’s basis for determining that the student 

18 has extenuating circumstances under subpara19 graph (B), which may include an updated credit 

20 report, debt related to a medical condition, a 

21 statement from a creditor that the student has 

22 made satisfactory arrangements to repay the 

23 debt owed to the creditor, a satisfactory state24 ment from the student explaining any delin25 quencies with outstanding balances of less than 

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1 $2,000, or a reduction of the credit require2 ments under this subsection in response to a 

3 natural disaster or poor economic conditions 

4 that are unforeseen or prolonged; and 

5 ‘‘(G) in a case in which the Secretary de6 termines that a student does not to have an ad7 verse credit history in accordance with this sub8 section, shall consider such determination to be 

9 in effect for a 2-year period beginning on the 

10 date the Secretary makes such determination. 

11 ‘‘(3) DEFINITION.—For purposes of this sub12 section, the term ‘student’ means a graduate or pro13 fessional student or the parents of a dependent stu14 dent.’’. 

15 SEC. 3. INAPPLICABILITY OF TITLE IV NEGOTIATED RULE16 MAKING REQUIREMENT AND MASTER CAL17 ENDAR EXCEPTION. 

18 Sections 482(c) and 492 of the Higher Education Act 

19 of 1965 (20 U.S.C. 1089(c), 1098a) shall not apply to 

20 the amendment made by section 2, or to any regulations 

21 promulgated under such amendment. 

Æ 

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