II 

116TH CONGRESS 

1ST SESSION S. 2184 

To amend the Truth in Lending Act and the Higher Education Act of 

1965 to require certain creditors to obtain certifications from institutions 

of higher education, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 18, 2019 

Mr. DURBIN (for himself, Mr. REED, Mr. BROWN, Mr. CARDIN, Ms. BALDWIN, and Ms. SMITH) introduced the following bill; which was read twice 

and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Truth in Lending Act and the Higher Education Act of 1965 to require certain creditors to obtain 

certifications from institutions of higher education, 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 ‘‘Know Before You Owe 

5 Private Education Loan Act of 2019’’. 

6 SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT. 

7 (a) IN GENERAL.—Section 128(e) of the Truth in 

8 Lending Act (15 U.S.C. 1638(e)) is amended— 


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1 (1) by striking paragraph (3) and inserting the 

2 following: 

3 ‘‘(3) INSTITUTIONAL CERTIFICATION RE4 QUIRED.— 

5 ‘‘(A) IN GENERAL.—Except as provided in 

6 subparagraph (B), before a creditor may issue 

7 any funds with respect to an extension of credit 

8 described in this subsection, the creditor shall 

9 obtain from the relevant institution of higher 

10 education where such loan is to be used for a 

11 student, such institution’s certification of— 

12 ‘‘(i) the enrollment status of the stu13 dent; 

14 ‘‘(ii) the student’s cost of attendance 

15 at the institution as determined by the in16 stitution under part F of title IV of the 

17 Higher Education Act of 1965; and 

18 ‘‘(iii) the difference between— 

19 ‘‘(I) such cost of attendance; and 

20 ‘‘(II) the student’s estimated fi21 nancial assistance, including such as22 sistance received under title IV of the 

23 Higher Education Act of 1965 (20 

24 U.S.C. 1070 et seq.) and other finanVerDate Sep 11 2014 23:30 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2184.IS S2184

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1 cial assistance known to the institu2 tion, as applicable. 

3 ‘‘(B) EXCEPTION.—Notwithstanding sub4 paragraph (A), a creditor may issue funds with 

5 respect to an extension of credit described in 

6 this subsection without obtaining from the rel7 evant institution of higher education such insti8 tution’s certification if such institution fails to 

9 provide within 15 business days of the credi10 tor’s request for such certification— 

11 ‘‘(i) notification of the institution’s re12 fusal to certify the request; or 

13 ‘‘(ii) notification that the institution 

14 has received the request for certification 

15 and will need additional time to comply 

16 with the certification request. 

17 ‘‘(C) LOANS DISBURSED WITHOUT CER18 TIFICATION.—If a creditor issues funds without 

19 obtaining a certification, as described in sub20 paragraph (B), such creditor shall report the 

21 issuance of such funds in a manner determined 

22 by the Director of the Consumer Financial Pro23 tection Bureau.’’; 


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1 (2) by redesignating paragraphs (9), (10), and 

2 (11) as paragraphs (10), (11), and (12), respec3 tively; and 

4 (3) by inserting after paragraph (8) the fol5 lowing: 

6 ‘‘(9) PROVISION OF INFORMATION.— 

7 ‘‘(A) PROVISION OF INFORMATION TO STU8 DENTS.— 

9 ‘‘(i) LOAN STATEMENT.—A creditor 

10 that issues any funds with respect to an 

11 extension of credit described in this sub12 section shall send loan statements, where 

13 such loan is to be used for a student, to 

14 borrowers of such funds not less than once 

15 every 3 months during the time that such 

16 student is enrolled at an institution of 

17 higher education. 

18 ‘‘(ii) CONTENTS OF LOAN STATE19 MENT.—Each statement described in 

20 clause (i) shall— 

21 ‘‘(I) report the borrower’s total 

22 remaining debt to the creditor, includ23 ing accrued but unpaid interest and 

24 capitalized interest; 


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1 ‘‘(II) report any debt increases 

2 since the last statement; and 

3 ‘‘(III) list the current interest 

4 rate for each loan. 

5 ‘‘(B) NOTIFICATION OF LOANS DISBURSED

6 WITHOUT CERTIFICATION.—On or before the 

7 date a creditor issues any funds with respect to 

8 an extension of credit described in this sub9 section, the creditor shall notify the relevant in10 stitution of higher education, in writing, of the 

11 amount of the extension of credit and the stu12 dent on whose behalf credit is extended. The 

13 form of such written notification shall be sub14 ject to the regulations of the Bureau. 

15 ‘‘(C) ANNUAL REPORT.—A creditor that 

16 issues funds with respect to an extension of 

17 credit described in this subsection shall prepare 

18 and submit an annual report to the Bureau 

19 containing the required information about pri20 vate student loans to be determined by the Di21 rector of the Bureau, in consultation with the 

22 Secretary of Education.’’. 

23 (b) DEFINITION OF PRIVATE EDUCATION LOAN.— 

24 Section 140(a)(8)(A) of the Truth in Lending Act (15 

25 U.S.C. 1650(a)(8)(A)) is amended— 


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1 (1) by redesignating clause (ii) as clause (iii); 

2 (2) in clause (i), by striking ‘‘and’’ after the 

3 semicolon; and 

4 (3) by adding after clause (i) the following: 

5 ‘‘(ii) is not made, insured, or guaran6 teed under title VII or title VIII of the 

7 Public Health Service Act (42 U.S.C. 292 

8 et seq. and 296 et seq.); and’’. 

9 (c) REGULATIONS.—Not later than 365 days after 

10 the date of enactment of this Act, the Director of the Con11 sumer Financial Protection Bureau shall issue regulations 

12 in final form to implement paragraphs (3) and (9) of sec13 tion 128(e) of the Truth in Lending Act (15 U.S.C. 

14 1638(e)), as amended by subsection (a). Such regulations 

15 shall become effective not later than 6 months after their 

16 date of issuance. 

17 SEC. 3. AMENDMENT TO THE HIGHER EDUCATION ACT OF 

18 1965. 

19 (a) AMENDMENT TO THE HIGHER EDUCATION ACT

20 OF 1965.—Section 487(a) of the Higher Education Act 

21 of 1965 (20 U.S.C. 1094(a)) is amended by striking para22 graph (28) and inserting the following: 

23 ‘‘(28)(A) Upon the request of a private edu24 cational lender, acting in connection with an applica25 tion initiated by a borrower for a private education 


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1 loan in accordance with section 128(e)(3) of the 

2 Truth in Lending Act, the institution shall within 15 

3 days of receipt of the request— 

4 ‘‘(i) provide certification to such private 

5 educational lender— 

6 ‘‘(I) that the student who initiated the 

7 application for the private education loan, 

8 or on whose behalf the application was ini9 tiated, is enrolled or is scheduled to enroll 

10 at the institution; 

11 ‘‘(II) of such student’s cost of attend12 ance at the institution as determined under 

13 part F of this title; and 

14 ‘‘(III) of the difference between— 

15 ‘‘(aa) the cost of attendance at 

16 the institution; and 

17 ‘‘(bb) the student’s estimated fi18 nancial assistance received under this 

19 title and other assistance known to 

20 the institution, as applicable; 

21 ‘‘(ii) notify the creditor that the institution 

22 has received the request for certification and 

23 will need additional time to comply with the 

24 certification request; or 


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1 ‘‘(iii) provide notice to the private edu2 cational lender of the institution’s refusal to 

3 certify the private education loan pursuant to 

4 subparagraph (D). 

5 ‘‘(B) With respect to a certification request de6 scribed in subparagraph (A), and prior to providing 

7 such certification under subparagraph (A)(i) or pro8 viding notice of the refusal to provide certification 

9 under subparagraph (A)(iii), the institution shall— 

10 ‘‘(i) determine whether the student who 

11 initiated the application for the private edu12 cation loan, or on whose behalf the application 

13 was initiated, has applied for and exhausted the 

14 Federal financial assistance available to such 

15 student under this title and inform the student 

16 accordingly; and 

17 ‘‘(ii) provide the borrower whose loan ap18 plication has prompted the certification request 

19 by a private educational lender, as described in 

20 subparagraph (A)(i), with the following infor21 mation and disclosures: 

22 ‘‘(I) The amount of additional Federal 

23 student assistance for which the borrower 

24 is eligible and the advantages of Federal 

25 loans under this title, including disclosure 


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1 of the fixed interest rates, deferments, 

2 flexible repayment options, loan forgiveness 

3 programs, and additional protections, and 

4 the higher student loan limits for depend5 ent students whose parents are not eligible 

6 for a Federal Direct PLUS Loan. 

7 ‘‘(II) The borrower’s ability to select a 

8 private educational lender of the bor9 rower’s choice. 

10 ‘‘(III) The impact of a proposed pri11 vate education loan on the borrower’s po12 tential eligibility for other financial assist13 ance, including Federal financial assistance 

14 under this title. 

15 ‘‘(IV) The borrower’s right to accept 

16 or reject a private education loan within 

17 the 30-day period following a private edu18 cational lender’s approval of a borrower’s 

19 application and about a borrower’s 3-day 

20 right to cancel period. 

21 ‘‘(C) For purposes of this paragraph, the terms 

22 ‘private educational lender’ and ‘private education 

23 loan’ have the meanings given such terms in section 

24 140 of the Truth in Lending Act (15 U.S.C. 

25 1650).’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 subsection (a) shall take effect on the effective date of the 

3 regulations described in section 2(c). 

4 (c) PREFERRED LENDER ARRANGEMENT.—Section 

5 151(8)(A)(ii) of the Higher Education Act of 1965 (20 

6 U.S.C. 1019(8)(A)(ii)) is amended by inserting ‘‘certi7 fying,’’ after ‘‘promoting,’’. 

8 SEC. 4. REPORT. 

9 (a) IN GENERAL.—Not later than 24 months after 

10 the issuance of regulations under section 2(c), the Direc11 tor of the Consumer Financial Protection Bureau and the 

12 Secretary of Education shall jointly submit to Congress 

13 a report on the compliance of— 

14 (1) private educational lenders with section 

15 128(e)(3) of the Truth in Lending Act (15 U.S.C. 

16 1638(e)(3)), as amended by section 2; and 

17 (2) institutions of higher education with section 

18 487(a)(28) of the Higher Education Act of 1965 (20 

19 U.S.C. 1094(a)(28)), as amended by section 3. 

20 (b) CONTENTS.—The contents of the report described 

21 in subsection (a) shall include information about the de22 gree to which specific institutions utilize certifications in 

23 effectively— 


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1 (1) encouraging the exhaustion of Federal stu2 dent loan eligibility by borrowers prior to taking on 

3 private education loan debt; and 

4 (2) lowering private education loan debt by bor5 rowers. 

Æ 


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