II 

116TH CONGRESS 

1ST SESSION S. 2015 

To amend the Higher Education Act of 1965 to direct the Secretary of 

Education to develop a plain language disclosure form for borrowers 

of Federal student loans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 27, 2019 

Mr. SCOTT of South Carolina (for himself and Mr. MANCHIN) introduced the 

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

Health, Education, Labor, and Pensions 

A BILL 

To amend the Higher Education Act of 1965 to direct the 

Secretary of Education to develop a plain language disclosure form for borrowers of Federal student loans, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Loan Disclo5 sure Modernization Act’’. 

6 SEC. 2. ADDITIONAL DISCLOSURES. 

7 Section 433(a) of the Higher Education Act of 1965 

8 (20 U.S.C. 1083(a)) is amended— 


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1 (1) in paragraph (4), by striking ‘‘the origina2 tion fee and’’ and inserting ‘‘finance charges, the 

3 origination fee, and’’; 

4 (2) by redesignating paragraphs (6) through 

5 (19) as paragraphs (7) through (20), respectively; 

6 and 

7 (3) by inserting after paragraph (5), the fol8 lowing: 

9 ‘‘(6) the annual percentage rate applicable to 

10 the loan, taking into account— 

11 ‘‘(A) the amount of the loan; 

12 ‘‘(B) the stated interest rate of the loan; 

13 ‘‘(C) the standard term for a loan of the 

14 same type; 

15 ‘‘(D) any fees or additional costs associ16 ated with the loan; and 

17 ‘‘(E) any capitalization of interest on the 

18 loan;’’. 

19 SEC. 3. PLAIN LANGUAGE DISCLOSURE FORM. 

20 Section 455(p) of the Higher Education Act of 1965 

21 (20 U.S.C. 1087e(p)) is amended— 

22 (1) by striking ‘‘Each institution’’ and inserting 

23 the following: 

24 ‘‘(1) IN GENERAL.—Each institution’’; and 

25 (2) by adding at the end the following: 


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1 ‘‘(2) PLAIN LANGUAGE DISCLOSURE FORM.— 

2 ‘‘(A) DEVELOPMENT AND ISSUANCE OF

3 FORM.—Not later than 18 months after the 

4 date of the enactment of this paragraph, the 

5 Secretary shall, based on consumer testing, de6 velop and issue a model form to be known as 

7 the ‘Plain Language Disclosure Form’ that 

8 shall be used by institutions and contractors de9 scribed in paragraph (1) to comply with the dis10 closure requirements of such paragraph. 

11 ‘‘(B) FORMAT.—The Secretary shall en12 sure that the Plain Language Disclosure 

13 Form— 

14 ‘‘(i) enables borrowers to easily iden15 tify the information required to be dis16 closed under section 433(a) with respect to 

17 a loan and loan repayment options (includ18 ing income-based and income contingent 

19 repayment), with emphasis on the loan 

20 terms determined by the Secretary to be 

21 critical to understanding the total costs of 

22 the loan and the estimated monthly repay23 ment; 

24 ‘‘(ii) has a clear format and design, 

25 including easily readable font; and 


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1 ‘‘(iii) is as succinct as practicable. 

2 ‘‘(C) CONSULTATION.—In developing the 

3 Plain Language Disclosure Form, the Secretary 

4 shall, as appropriate, consult with— 

5 ‘‘(i) the Federal Reserve Board; 

6 ‘‘(ii) institutions and contractors de7 scribed in paragraph (1); 

8 ‘‘(iii) borrowers of loans under this 

9 part; and 

10 ‘‘(iv) other organizations involved in 

11 the provision of financial assistance to stu12 dents, as identified by the Secretary. 

13 ‘‘(3) ELECTRONIC SYSTEM FOR COMPLIANCE.— 

14 In carrying out paragraph (2), Secretary shall de15 velop and implement an electronic system that may 

16 be used by institutions and contractors described in 

17 paragraph (1) to generate a Plain Language Disclo18 sure Form for each borrower by— 

19 ‘‘(A) enabling institutions and contractors 

20 to enter personalized loan request information 

21 electronically; 

22 ‘‘(B) integrating appropriate data found in 

23 the National Student Loan Data System; and 

24 ‘‘(C) generating and integrating personal25 ized borrower information. 


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1 ‘‘(4) LIMIT ON LIABILITY.—Nothing in this 

2 subsection shall be construed to create a private 

3 right of action against an institution or contractor 

4 described in paragraph (1) with respect to the form 

5 or electronic system developed under this paragraph. 

6 ‘‘(5) BORROWER SIGNATURE REQUIRED.—Be7 ginning after the issuance of the Plain Language 

8 Disclosure Form by the Secretary under paragraph 

9 (2), a loan may not be issued to a borrower under 

10 this part unless the borrower acknowledges, in writ11 ing (which may include an electronic signature), that 

12 the borrower has read the Plain Language Disclo13 sure Form for the loan concerned. 

14 ‘‘(6) CONSUMER TESTING DEFINED.—In this 

15 subsection, the term ‘consumer testing’ means the 

16 solicitation of feedback from individuals, including 

17 borrowers and prospective borrowers of loans under 

18 this part (as determined by the Secretary), about 

19 the usefulness of different methods of disclosing ma20 terial terms of loans on the Plain Language Disclo21 sure Form to maximize borrowers’ understanding of 

22 the terms and conditions of such loans.’’. 

23 SEC. 4. REPORT TO CONGRESS. 

24 Not later than 2 years after the date of the enact25 ment of this Act, the Secretary of Education shall submit 


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1 to Congress a report that includes a description of the 

2 methods and procedures used to develop the Plain Lan3 guage Disclosure Form required under section 455(p)(2) 

4 of the Higher Education Act of 1965 (as added by section 

5 3 of this Act). 

Æ 


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