IB 

Union Calendar No. 397 

113TH CONGRESS 

2D SESSION H. R. 4984 

[Report No. 113–531] 

To amend the loan counseling requirements under the Higher Education 

Act of 1965, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 2014 

Mr. GUTHRIE (for himself, Mr. HUDSON, and Mr. KLINE) introduced the following bill; which was referred to the Committee on Education and the 

Workforce 

JULY 17, 2014 

Additional sponsors: Mr. KELLY of Pennsylvania, Mr. ROE of Tennessee, Mrs. 

BROOKS of Indiana, Mr. THOMPSON of Pennsylvania, Mr. ROKITA, Mr. 

HECK of Nevada, Mr. BUCSHON, Mr. MESSER, Mrs. CAPITO, Mr. 

ROTHFUS, Ms. BONAMICI, Mr. ROYCE, Mr. SABLAN, Mr. KING of New 

York, and Mr. GEORGE MILLER of California 

JULY 17, 2014 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on June 26, 2014] 


tkelley on DSK3SPTVN1PROD with BILLS
2 

•HR 4984 RH

A BILL 

To amend the loan counseling requirements under the Higher 

Education Act of 1965, and for other purposes. 


tkelley on DSK3SPTVN1PROD with BILLS
3 

•HR 4984 RH

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 Students 

5 Through Enhanced Financial Counseling Act’’. 

6 SEC. 2. ANNUAL COUNSELING. 

7 Section 485(l) of the Higher Education Act of 1965 

8 (20 U.S.C. 1092(l)) is amended to read as follows: 

9 ‘‘(l) ANNUAL FINANCIAL AID COUNSELING.— 

10 ‘‘(1) ANNUAL DISCLOSURE REQUIRED.— 

11 ‘‘(A) IN GENERAL.—Each eligible institu12 tion shall ensure that each individual who re13 ceives a Federal Pell Grant or a loan made 

14 under part D (other than a Federal Direct Con15 solidation Loan) receives comprehensive informa16 tion on the terms and conditions of such Federal 

17 Pell Grant or loan and the responsibilities the 

18 individual has with respect to such Federal Pell 

19 Grant or loan. Such information shall be pro20 vided, for each award year for which the indi21 vidual receives such Federal Pell Grant or loan, 

22 in a simple and understandable manner— 

23 ‘‘(i) during a counseling session con24 ducted in person; 


tkelley on DSK3SPTVN1PROD with BILLS
4 

•HR 4984 RH

1 ‘‘(ii) online, with the borrower ac2 knowledging receipt of the information; or 

3 ‘‘(iii) through the use of the online 

4 counseling tool described in subsection 

5 (n)(1)(B). 

6 ‘‘(B) USE OF INTERACTIVE PROGRAMS.—In 

7 the case of institutions not using the online 

8 counseling tool described in subsection (n)(1)(B), 

9 the Secretary shall require such institutions to 

10 carry out the requirements of subparagraph (A) 

11 through the use of interactive programs, during 

12 an annual counseling session that is in-person or 

13 online, that test the individual’s understanding 

14 of the terms and conditions of the Federal Pell 

15 Grant or loan awarded to the student, using 

16 simple and understandable language and clear 

17 formatting. 

18 ‘‘(2) ALL INDIVIDUALS.—The information to be 

19 provided under paragraph (1)(A) to each individual 

20 receiving counseling under this subsection shall in21 clude the following: 

22 ‘‘(A) An explanation of how the student 

23 may budget for typical educational expenses and 

24 a sample budget based on the cost of attendance 

25 for the institution. 


tkelley on DSK3SPTVN1PROD with BILLS
5 

•HR 4984 RH

1 ‘‘(B) An explanation that an individual has 

2 a right to annually request a disclosure of infor3 mation collected by a consumer reporting agency 

4 pursuant to section 612(a) of the Fair Credit Re5 porting Act (15 U.S.C. 1681j(a)). 

6 ‘‘(3) STUDENTS RECEIVING FEDERAL PELL

7 GRANTS.—The information to be provided under 

8 paragraph (1)(A) to each student receiving a Federal 

9 Pell Grant shall include the following: 

10 ‘‘(A) An explanation of the terms and con11 ditions of the Federal Pell Grant. 

12 ‘‘(B) An explanation of approved edu13 cational expenses for which the student may use 

14 the Federal Pell Grant. 

15 ‘‘(C) An explanation of why the student 

16 may have to repay the Federal Pell Grant. 

17 ‘‘(D) An explanation of the maximum num18 ber of semesters or equivalent for which the stu19 dent may be eligible to receive a Federal Pell 

20 Grant, and a statement of the amount of time re21 maining for which the student may be eligible to 

22 receive a Federal Pell Grant. 

23 ‘‘(E) An explanation of how the student 

24 may seek additional financial assistance from 

25 the institution’s financial aid office due to a 


tkelley on DSK3SPTVN1PROD with BILLS
6 

•HR 4984 RH

1 change in the student’s financial circumstances, 

2 and the contact information for such office. 

3 ‘‘(4) BORROWERS RECEIVING LOANS MADE

4 UNDER PART D (OTHER THAN PARENT PLUS

5 LOANS).—The information to be provided under para6 graph (1)(A) to a borrower of a loan made under part 

7 D (other than a Federal Direct PLUS Loan made on 

8 behalf of a dependent student) shall include the fol9 lowing: 

10 ‘‘(A) To the extent practicable, the effect of 

11 accepting the loan to be disbursed on the eligi12 bility of the borrower for other forms of student 

13 financial assistance. 

14 ‘‘(B) An explanation of the use of the mas15 ter promissory note. 

16 ‘‘(C) An explanation that the borrower is 

17 not required to accept the full amount of the loan 

18 offered to the borrower. 

19 ‘‘(D) An explanation that the borrower 

20 should consider accepting any grant, scholarship, 

21 or State or Federal work-study jobs for which the 

22 borrower is eligible prior to accepting Federal 

23 student loans. 

24 ‘‘(E) A recommendation to the borrower to 

25 exhaust the borrower’s Federal student loan opVerDate Mar 15 2010 22:36 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H4984.RH H4984

tkelley on DSK3SPTVN1PROD with BILLS
7 

•HR 4984 RH

1 tions prior to taking out private loans, an expla2 nation that Federal student loans typically offer 

3 better terms and conditions than private loans, 

4 and an explanation that if a borrower decides to 

5 take out a private education loan— 

6 ‘‘(i) the borrower has the ability to se7 lect a private educational lender of the bor8 rower’s choice; 

9 ‘‘(ii) the proposed private education 

10 loan may impact the borrower’s potential 

11 eligibility for other financial assistance, in12 cluding Federal financial assistance under 

13 this title; and 

14 ‘‘(iii) the borrower has a right— 

15 ‘‘(I) to accept the terms of the pri16 vate education loan within 30 calendar 

17 days following the date on which the 

18 application for such loan is approved 

19 and the borrower receives the required 

20 disclosure documents, pursuant to sec21 tion 128(e)(6) of the Truth in Lending 

22 Act; and 

23 ‘‘(II) to cancel such loan within 3 

24 business days of the date on which the 


tkelley on DSK3SPTVN1PROD with BILLS
8 

•HR 4984 RH

1 loan is consummated, pursuant to sec2 tion 128(e)(7) of such Act. 

3 ‘‘(F) An explanation of the approved edu4 cational expenses for which the borrower may use 

5 a loan made under part D. 

6 ‘‘(G) Information on the annual and aggre7 gate loan limits for Federal Direct Stafford 

8 Loans and Federal Direct Unsubsidized Stafford 

9 Loans. 

10 ‘‘(H) Information on how interest accrues 

11 and is capitalized during periods when the inter12 est is not paid by either the borrower or the Sec13 retary. 

14 ‘‘(I) In the case of a Federal Direct PLUS 

15 Loan or a Federal Direct Unsubsidized Stafford 

16 Loan, the option of the borrower to pay the in17 terest while the borrower is in school. 

18 ‘‘(J) The definition of half-time enrollment 

19 at the institution, during regular terms and 

20 summer school, if applicable, and the con21 sequences of not maintaining at least half-time 

22 enrollment. 

23 ‘‘(K) An explanation of the importance of 

24 contacting the appropriate offices at the institu25 tion of higher education if the borrower withVerDate Mar 15 2010 22:36 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H4984.RH H4984

tkelley on DSK3SPTVN1PROD with BILLS
9 

•HR 4984 RH

1 draws prior to completing the borrower’s pro2 gram of study so that the institution can provide 

3 exit counseling, including information regarding 

4 the borrower’s repayment options and loan con5 solidation. 

6 ‘‘(L) For a first-time borrower, the antici7 pated monthly payment amount under, at min8 imum, a standard repayment plan and, using 

9 the regionally available data from the Bureau of 

10 Labor Statistics of the average starting salary 

11 for the occupation the borrower intends to be em12 ployed, an income-based repayment plan under 

13 section 493C, and based on— 

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

15 of— 

16 ‘‘(I) borrowers of Federal Direct 

17 Stafford Loans or Federal Direct Un18 subsidized Stafford Loans; and 

19 ‘‘(II) as appropriate, graduate 

20 borrowers of Federal Direct PLUS 

21 Loans or Federal Direct Unsubsidized 

22 Stafford Loans; or 

23 ‘‘(ii) the average cumulative indebted24 ness at graduation for students who bor25 rowed loans made under part D and who 


tkelley on DSK3SPTVN1PROD with BILLS
10 

•HR 4984 RH

1 are in the same program of study as the 

2 borrower. 

3 ‘‘(M) For a borrower with an outstanding 

4 balance of principal or interest due on a loan 

5 made under this title— 

6 ‘‘(i) a current statement of the amount 

7 of such outstanding balance and interest ac8 crued; 

9 ‘‘(ii) based on such outstanding bal10 ance, the anticipated monthly payment 

11 amount under, at minimum, the standard 

12 repayment plan and, using regionally 

13 available data from the Bureau of Labor 

14 Statistics of the average starting salary for 

15 the occupation the borrower intends to be 

16 employed, an income-based repayment plan 

17 under section 493C; and 

18 ‘‘(iii) an estimate of the projected 

19 monthly payment amount under each re20 payment plan described in clause (ii), based 

21 on— 

22 ‘‘(I) the outstanding balance de23 scribed in clause (i); 

24 ‘‘(II) the anticipated outstanding 

25 balance on the loan for which the stuVerDate Mar 15 2010 22:36 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H4984.RH H4984

tkelley on DSK3SPTVN1PROD with BILLS
11 

•HR 4984 RH

1 dent is receiving counseling under this 

2 subsection; and 

3 ‘‘(III) a projection for any other 

4 loans made under part D that the bor5 rower is reasonably expected to accept 

6 during the borrower’s program of study 

7 based on at least the expected increase 

8 in the cost of attendance of such pro9 gram. 

10 ‘‘(N) The obligation of the borrower to 

11 repay the full amount of the loan, regardless of 

12 whether the borrower completes or does not com13 plete the program in which the borrower is en14 rolled within the regular time for program com15 pletion. 

16 ‘‘(O) The likely consequences of default on 

17 the loan, including adverse credit reports, delin18 quent debt collection procedures under Federal 

19 law, and litigation, and a notice of the institu20 tion’s most recent cohort default rate (defined in 

21 section 435(m)), an explanation of the cohort de22 fault rate, and the most recent national average 

23 cohort default rate for the category of institution 

24 described in section 435(m)(4) to which the insti25 tution belongs. 


tkelley on DSK3SPTVN1PROD with BILLS
12 

•HR 4984 RH

1 ‘‘(P) Information on the National Student 

2 Loan Data System and how the borrower can 

3 access the borrower’s records. 

4 ‘‘(Q) The contact information for the insti5 tution’s financial aid office or other appropriate 

6 office at the institution the borrower may contact 

7 if the borrower has any questions about the bor8 rower’s rights and responsibilities or the terms 

9 and conditions of the loan. 

10 ‘‘(5) BORROWERS RECEIVING PARENT PLUS

11 LOANS FOR DEPENDENT STUDENTS.—The information 

12 to be provided under paragraph (1)(A) to a borrower 

13 of a Federal Direct PLUS Loan made on behalf of a 

14 dependent student shall include the following: 

15 ‘‘(A) The information described in subpara16 graphs (A) through (C) and (N) through (Q) of 

17 paragraph (4). 

18 ‘‘(B) The option of the borrower to pay the 

19 interest on the loan while the loan is in 

20 deferment. 

21 ‘‘(C) For a first-time borrower of such loan, 

22 sample monthly repayment amounts under the 

23 standard repayment plan based on— 


tkelley on DSK3SPTVN1PROD with BILLS
13 

•HR 4984 RH

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

2 borrowers of Federal Direct PLUS Loans 

3 made on behalf of a dependent student; or 

4 ‘‘(ii) the average cumulative indebted5 ness of other borrowers of Federal Direct 

6 PLUS Loans made on behalf of dependent 

7 students who are in the same program of 

8 study as the student on whose behalf the 

9 borrower borrowed the loan. 

10 ‘‘(D) For a borrower with an outstanding 

11 balance of principal or interest due on such 

12 loan— 

13 ‘‘(i) a statement of the amount of such 

14 outstanding balance; 

15 ‘‘(ii) based on such outstanding bal16 ance, the anticipated monthly payment 

17 amount under the standard repayment 

18 plan; and 

19 ‘‘(iii) an estimate of the projected 

20 monthly payment amount under the stand21 ard repayment plan, based on— 

22 ‘‘(I) the outstanding balance de23 scribed in clause (i); 

24 ‘‘(II) the anticipated outstanding 

25 balance on the loan for which the borVerDate Mar 15 2010 22:36 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6203 E:\BILLS\H4984.RH H4984

tkelley on DSK3SPTVN1PROD with BILLS
14 

•HR 4984 RH

1 rower is receiving counseling under 

2 this subsection; and 

3 ‘‘(III) a projection for any other 

4 Federal Direct PLUS Loan made on 

5 behalf of the dependent student that the 

6 borrower is reasonably expected to ac7 cept during the program of study of 

8 such student based on at least the ex9 pected increase in the cost of attend10 ance of such program. 

11 ‘‘(E) Debt management strategies that are 

12 designed to facilitate the repayment of such in13 debtedness. 

14 ‘‘(F) An explanation that the borrower has 

15 the options to prepay each loan, pay each loan 

16 on a shorter schedule, and change repayment 

17 plans. 

18 ‘‘(G) For each Federal Direct PLUS Loan 

19 made on behalf of a dependent student for which 

20 the borrower is receiving counseling under this 

21 subsection, the contact information for the loan 

22 servicer of the loan and a link to such servicer’s 

23 Website. 

24 ‘‘(6) ANNUAL LOAN ACCEPTANCE.—Prior to mak25 ing the first disbursement of a loan made under part 


tkelley on DSK3SPTVN1PROD with BILLS
15 

•HR 4984 RH

1 D (other than a Federal Direct Consolidation Loan) 

2 to a borrower for an award year, an eligible institu3 tion, shall, as part of carrying out the counseling re4 quirements of this subsection for the loan, ensure that 

5 the borrower accepts the loan for such award year 

6 by— 

7 ‘‘(A) signing the master promissory note for 

8 the loan; 

9 ‘‘(B) signing and returning to the institu10 tion a separate written statement that affirma11 tively states that the borrower accepts the loan; 

12 or 

13 ‘‘(C) electronically signing an electronic 

14 version of the statement described in subpara15 graph (B).’’. 

16 SEC. 3. EXIT COUNSELING. 

17 Section 485(b) of the Higher Education Act of 1965 

18 (20 U.S.C. 1092(b)) is amended— 

19 (1) in paragraph (1)(A)— 

20 (A) in the matter preceding clause (i), by 

21 striking ‘‘through financial aid offices or other22 wise’’ and inserting ‘‘through the use of an inter23 active program, during an exit counseling ses24 sion that is in-person or online, or through the 


tkelley on DSK3SPTVN1PROD with BILLS
16 

•HR 4984 RH

1 use of the online counseling tool described in sub2 section (n)(1)(A)’’; 

3 (B) by redesignating clauses (i) through (ix) 

4 as clauses (iv) through (xii), respectively; 

5 (C) by inserting before clause (iv), as so re6 designated, the following: 

7 ‘‘(i) a summary of the outstanding balance of 

8 principal and interest due on the loans made to the 

9 borrower under part B, D, or E; 

10 ‘‘(ii) an explanation of the grace period pre11 ceding repayment and the expected date that the bor12 rower will enter repayment; 

13 ‘‘(iii) an explanation that the borrower has the 

14 option to pay any interest that has accrued while the 

15 borrower was in school or that may accrue during the 

16 grace period preceding repayment or during an au17 thorized period of deferment or forbearance, prior to 

18 the capitalization of the interest;’’; 

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

20 (i) by striking ‘‘sample information 

21 showing the average’’ and inserting ‘‘infor22 mation, based on the borrower’s outstanding 

23 balance described in clause (i), showing the 

24 borrower’s’’; and 


tkelley on DSK3SPTVN1PROD with BILLS
17 

•HR 4984 RH

1 (ii) by striking ‘‘of each plan’’ and in2 serting ‘‘of at least the standard repayment 

3 plan and the income-based repayment plan 

4 under section 493C’’; 

5 (E) in clause (x), as so redesignated, by 

6 striking ‘‘consolidation loan under section 428C 

7 or a’’; 

8 (F) in clauses (xi) and (xii), as so redesig9 nated, by striking ‘‘and’’ at the end; and 

10 (G) by adding at the end the following: 

11 ‘‘(xiii) for each of the borrower’s loans made 

12 under part B, D, or E for which the borrower is re13 ceiving counseling under this subsection, the contact 

14 information for the loan servicer of the loan and a 

15 link to such servicer’s Website; and 

16 ‘‘(xiv) an explanation that an individual has a 

17 right to annually request a disclosure of information 

18 collected by a consumer reporting agency pursuant to 

19 section 612(a) of the Fair Credit Reporting Act (15 

20 U.S.C. 1681j(a)).’’; 

21 (2) in paragraph (1)(B)— 

22 (A) by inserting ‘‘online or’’ before ‘‘in 

23 writing’’; and 

24 (B) by adding before the period at the end 

25 the following: ‘‘, except that in the case of an inVerDate Mar 15 2010 22:36 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6203 E:\BILLS\H4984.RH H4984

tkelley on DSK3SPTVN1PROD with BILLS
18 

•HR 4984 RH

1 stitution using the online counseling tool de2 scribed in subsection (n)(1)(A), the Secretary 

3 shall attempt to provide such information to the 

4 student in the manner described in subsection 

5 (n)(3)(C)’’; and 

6 (3) in paragraph (2)(C), by inserting ‘‘, such as 

7 the online counseling tool described in subsection 

8 (n)(1)(A),’’ after ‘‘electronic means’’. 

9 SEC. 4. ONLINE COUNSELING TOOLS. 

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

11 U.S.C. 1092) is further amended by adding at the end the 

12 following: 

13 ‘‘(n) ONLINE COUNSELING TOOLS.— 

14 ‘‘(1) IN GENERAL.—Beginning not later than 1 

15 year after the date of enactment of the Empowering 

16 Students Through Enhanced Financial Counseling 

17 Act, the Secretary shall maintain— 

18 ‘‘(A) an online counseling tool that provides 

19 the exit counseling required under subsection (b) 

20 and meets the applicable requirements of this 

21 subsection; and 

22 ‘‘(B) an online counseling tool that provides 

23 the annual counseling required under subsection 

24 (l) and meets the applicable requirements of this 

25 subsection. 


tkelley on DSK3SPTVN1PROD with BILLS
19 

•HR 4984 RH

1 ‘‘(2) REQUIREMENTS OF TOOLS.—In maintain2 ing the online counseling tools described in paragraph 

3 (1), the Secretary shall ensure that each such tool is— 

4 ‘‘(A) consumer tested, in consultation with 

5 other relevant Federal agencies, to ensure that 

6 the tool is effective in helping individuals under7 stand their rights and obligations with respect to 

8 borrowing a loan made under part D or receiv9 ing a Federal Pell Grant; 

10 ‘‘(B) understandable to students receiving 

11 Federal Pell Grants and borrowers of loans made 

12 under part D; and 

13 ‘‘(C) freely available to all eligible institu14 tions. 

15 ‘‘(3) RECORD OF COUNSELING COMPLETION.— 

16 The Secretary shall— 

17 ‘‘(A) use each online counseling tool de18 scribed in paragraph (1) to keep a record of 

19 which individuals have received counseling using 

20 the tool, and notify the applicable institutions of 

21 the individual’s completion of such counseling; 

22 ‘‘(B) in the case of a borrower who receives 

23 annual counseling for a loan made under part D 

24 using the tool described in paragraph (1)(B), no25 tify the borrower by when the borrower should 


tkelley on DSK3SPTVN1PROD with BILLS
20 

•HR 4984 RH

1 accept, in a manner described in section 

2 485(l)(6), the loan for which the borrower has re3 ceived such counseling; and 

4 ‘‘(C) in the case of a borrower described in 

5 subsection (b)(1)(B) at an institution that uses 

6 the online counseling tool described in paragraph 

7 (1)(A) of this subsection, the Secretary shall at8 tempt to provide the information described in 

9 subsection (b)(1)(A) to the borrower through such 

10 tool.’’. 

11 SEC. 5. AVAILABILITY OF FUNDS. 

12 (a) USE OF EXISTING FUNDS.—Of the amount author13 ized to be appropriated for maintaining the Department 

14 of Education’s Financial Awareness Counseling Tool, 

15 $2,000,000 shall be available to carry out this Act and the 

16 amendments made by this Act. 

17 (b) NO ADDITIONAL FUNDS AUTHORIZED.—No funds 

18 are authorized to be appropriated by this Act to carry out 

19 this Act or the amendments made by this Act. 


tkelley on DSK3SPTVN1PROD with BILLS

tkelley on DSK3SPTVN1PROD with BILLS
Union Calendar No. 397 

113TH CONGRESS 

2D SESSION H. R. 4984 

[Report No. 113–531] 

A BILL 

To amend the loan counseling requirements under 

purposes. the Higher Education Act of 1965, and for other 

JULY 17, 2014 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


tkelley on DSK3SPTVN1PROD with BILLS