I 

113TH CONGRESS 

2D SESSION H. R. 4984 

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 

A BILL 

To amend the loan counseling requirements under the Higher 

Education Act of 1965, 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 ‘‘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— 

9 (1) in the subsection heading, by striking ‘‘EN10 TRANCE’’ and inserting ‘‘ANNUAL’’; 


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1 (2) in paragraph (1)— 

2 (A) in the paragraph heading, by striking 

3 ‘‘DISBURSEMENT’’ and inserting ‘‘ACCEPT4 ANCE’’; 

5 (B) in subparagraph (A)— 

6 (i) in the matter preceding clause 

7 (i)— 

8 (I) by striking ‘‘at or prior to’’ 

9 and inserting ‘‘prior to or in conjunc10 tion with’’; and 

11 (II) by striking ‘‘a disbursement 

12 to a first-time borrower of a loan 

13 made, insured, or guaranteed under 

14 part B (other than a loan made pur15 suant to section 428C or a loan made 

16 on behalf of a student pursuant to 

17 section 428B) or’’ and inserting ‘‘ac18 ceptance (in a manner described in 

19 subparagraph (A), (B), or (C) of 

20 paragraph (4)) by a borrower of a 

21 loan’’; and 

22 (ii) in clause (ii)— 

23 (I) in the matter preceding sub24 clause (I)— 


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1 (aa) by striking ‘‘may’’ and 

2 inserting ‘‘shall’’; and 

3 (bb) by inserting ‘‘, for each 

4 award year for which the bor5 rower receives a loan made under 

6 part D’’ after ‘‘provided’’; 

7 (II) in subclause (I), by striking 

8 ‘‘an entrance counseling session con9 duction in person’’ and inserting ‘‘a 

10 counseling session conducted in per11 son’’; 

12 (III) by striking subclause (II); 

13 (IV) by redesignating subclause 

14 (III) as subclause (II); 

15 (V) in subclause (II), as so redes16 ignated, by striking the period at the 

17 end and inserting ‘‘; or’’; and 

18 (VI) by adding at the end the fol19 lowing: 

20 ‘‘(III) through the use of the on21 line counseling tool described in sub22 section (o)(1)(B).’’; and 

23 (C) in subparagraph (B)— 

24 (i) by striking ‘‘The Secretary’’ and 

25 inserting ‘‘In the case of institutions not 


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1 using the online counseling tool described 

2 in subsection (o)(1)(B), the Secretary’’; 

3 (ii) by striking ‘‘encourage institu4 tions’’ and inserting ‘‘require such institu5 tions’’; 

6 (iii) by inserting ‘‘, during an annual 

7 counseling session that is in-person or on8 line,’’ after ‘‘the use’’; and 

9 (iv) by striking ‘‘B or’’; 

10 (3) in paragraph (2)— 

11 (A) by redesignating subparagraphs (C) 

12 through (G) and subparagraphs (H) through 

13 (K), as subparagraphs (H) through (L), respec14 tively, and subparagraphs (N) through (Q), re15 spectively; and 

16 (B) by inserting after subparagraph (B), 

17 the following: 

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

19 not required to accept the full amount of the 

20 loan offered to the borrower. 

21 ‘‘(D) An explanation that the borrower 

22 should consider accepting any grant, scholar23 ship, or State or Federal work-study jobs for 

24 which the borrower is eligible prior to accepting 

25 Federal student loans. 


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

2 exhaust the borrower’s Federal student loan op3 tions prior to taking out private loans and a 

4 warning that private loans may not offer the 

5 same benefits and repayment options as Fed6 eral student loans. 

7 ‘‘(F) An explanation of the approved edu8 cational expenses for which the borrower may 

9 use a loan made under part D. 

10 ‘‘(G) Information on the annual and aggre11 gate loan limits for Federal Direct Stafford 

12 Loans and Federal Direct Unsubsidized Staf13 ford Loans.’’; 

14 (C) in subparagraph (I), as so redesig15 nated— 

16 (i) by striking ‘‘a loan made under 

17 section 428B or 428H,’’; and 

18 (ii) by striking ‘‘, or a’’ and inserting 

19 ‘‘or a’’; 

20 (D) in subparagraph (L), as so redesig21 nated— 

22 (i) in the matter preceding clause (i), 

23 by striking ‘‘Sample’’ and inserting ‘‘For a 

24 first-time borrower, sample’’; 


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1 (ii) in clause (i)(I), by striking ‘‘loans 

2 under section 428 or 428H’’ and inserting 

3 ‘‘Federal Direct Stafford Loans or Federal 

4 Direct Unsubsidized Stafford Loans’’; and 

5 (iii) in clause (i)(II), by striking 

6 ‘‘loans under section 428, 428B, or 428H’’ 

7 and inserting ‘‘Federal Direct PLUS 

8 Loans or Federal Direct Unsubsidized 

9 Stafford Loans’’; 

10 (E) by inserting after subparagraph (L), 

11 as so redesignated and amended, the following: 

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

13 balance of principal or interest due on a loan 

14 made under this title— 

15 ‘‘(i) a statement of the amount of 

16 such outstanding balance; 

17 ‘‘(ii) based on such outstanding bal18 ance, the anticipated monthly payment 

19 amount under each repayment plan that 

20 may be available to the borrower; and 

21 ‘‘(iii) based on such outstanding bal22 ance plus the anticipated outstanding bal23 ance on the loan for which the student is 

24 receiving counseling under this subsection 

25 and on any other Federal student loans 


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1 that the borrower may accept during the 

2 borrower’s course of study for which the 

3 borrower enrolled at the institution, an es4 timate of the projected monthly payment 

5 amount under each such repayment plan.’’; 

6 and 

7 (F) in subparagraph (Q), as so redesig8 nated— 

9 (i) by striking ‘‘name of and’’; and 

10 (ii) by striking ‘‘individual’’ and in11 serting ‘‘institution’s financial aid office or 

12 other appropriate office at the institution’’; 

13 and 

14 (4) by adding at the end the following: 

15 ‘‘(3) ANNUAL LOAN ACCEPTANCE.—Prior to 

16 making the first disbursement of a loan made under 

17 part D (other than a Federal Direct Consolidation 

18 Loan or a Federal Direct PLUS loan made on be19 half of a student) to a borrower for an award year, 

20 an eligible institution, shall, as part of carrying out 

21 the counseling requirements of this subsection for 

22 the loan, ensure that the borrower accepts the loan 

23 for such award year by— 

24 ‘‘(A) signing the master promissory note 

25 for the loan; 


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1 ‘‘(B) signing and returning to the institu2 tion a separate written statement that affirma3 tively states that the borrower accepts the loan; 

4 or 

5 ‘‘(C) electronically signing an electronic 

6 version of the statement described in subpara7 graph (B).’’. 

8 SEC. 3. EXIT COUNSELING. 

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

10 (20 U.S.C. 1092(b)) is amended— 

11 (1) in paragraph (1)(A)— 

12 (A) in the matter preceding clause (i)— 

13 (i) by striking ‘‘through financial aid 

14 offices or otherwise’’ and inserting 

15 ‘‘through the use of an interactive pro16 gram, during an exit counseling session 

17 that is in-person or online, or through the 

18 use of the online counseling tool described 

19 in subsection (o)(1)(A)’’; 

20 (ii) by redesignating clauses (i) 

21 through (ix) as clauses (iv) through (xii), 

22 respectively; 

23 (iii) by inserting before clause (iv), as 

24 so redesignated, the following: 


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1 ‘‘(i) a summary of the outstanding 

2 balance of principal and interest due on 

3 the loans made to the borrower under part 

4 B, D, or E; 

5 ‘‘(ii) an explanation of the grace pe6 riod preceding repayment and the expected 

7 date that the borrower will enter repay8 ment; 

9 ‘‘(iii) an explanation that the borrower 

10 has the option to pay any interest that has 

11 accrued while the borrower was in school 

12 or that may accrue during the grace period 

13 preceding repayment or during an author14 ized period of deferment or forbearance, 

15 prior to the capitalization of the interest;’’; 

16 (iv) in clause (iv), as so redesignated, 

17 by striking ‘‘sample information showing 

18 the average’’ and inserting ‘‘information, 

19 based on the borrower’s outstanding bal20 ance described in clause (i), showing the 

21 borrower’s’’; 

22 (v) in clause (x), as so redesignated, 

23 by striking ‘‘consolidation loan under sec24 tion 428C or a’’; and 


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1 (vi) by adding at the end the fol2 lowing: 

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

4 made under part B, D, or E for which the 

5 borrower is receiving counseling under this 

6 subsection, the contact information for the 

7 loan servicer of the loan and a link to such 

8 servicer’s Website.’’; 

9 (2) in paragraph (1)(B)— 

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

11 writing’’; and 

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

13 the following: ‘‘, except that in the case of an 

14 institution using the online counseling tool de15 scribed in subsection (o)(1)(A), the Secretary 

16 shall attempt to provide such information to the 

17 student in the manner described in subsection 

18 (o)(3)(C)’’; and 

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

20 the online counseling tool described in subsection 

21 (o)(1)(A),’’ after ‘‘electronic means’’. 


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1 SEC. 4. ANNUAL COUNSELING FOR FEDERAL PELL GRANT 

2 RECIPIENTS. 

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

4 U.S.C. 1092) is amended by adding at the end the fol5 lowing: 

6 ‘‘(n) ANNUAL COUNSELING FOR FEDERAL PELL

7 GRANT RECIPIENTS.— 

8 ‘‘(1) DISCLOSURE REQUIRED PRIOR TO DIS9 BURSEMENT OF FEDERAL PELL GRANT.— 

10 ‘‘(A) IN GENERAL.—Each eligible institu11 tion shall, prior to the first payment of a Fed12 eral Pell Grant to a student for an award year, 

13 ensure that the student receives comprehensive 

14 information on the terms and conditions of the 

15 Federal Pell Grant in accordance with para16 graph (2). Such information— 

17 ‘‘(i) shall be provided in a simple and 

18 understandable manner; and 

19 ‘‘(ii) shall be provided, for each award 

20 year for which the student receives a Fed21 eral Pell Grant— 

22 ‘‘(I) during a counseling session 

23 conducted in person; 

24 ‘‘(II) online, with the student ac25 knowledging receipt of the informa26 tion; or 


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1 ‘‘(III) through the use of the on2 line counseling tool described in sub3 section (o)(1)(C). 

4 ‘‘(B) USE OF INTERACTIVE PROGRAMS; 

5 JOINT COUNSELING PERMITTED.—In the case 

6 of institutions not using the online counseling 

7 tool described in subsection (o)(1)(C)— 

8 ‘‘(i) the Secretary shall require such 

9 institutions to carry out the requirements 

10 of subparagraph (A) through the use, dur11 ing an annual counseling session that is in12 person or online, of interactive programs 

13 that test the student’s understanding of 

14 the terms and conditions of the Federal 

15 Pell Grant paid to the student, using sim16 ple and understandable language and clear 

17 formatting; and 

18 ‘‘(ii) an annual counseling session de19 scribed in subclause (I) or (II) of subpara20 graph (A)(ii) for a student may be con21 ducted in conjunction with an annual coun22 seling session described in subclause (I) or 

23 (II) of subsection (l)(1)(A)(ii) for such stu24 dent. 


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1 ‘‘(2) INFORMATION TO BE PROVIDED.—The in2 formation to be provided to the student under para3 graph (1)(A) shall include the following: 

4 ‘‘(A) An explanation of a Federal Pell 

5 Grant. 

6 ‘‘(B) An explanation of approved edu7 cational expenses for which the student may use 

8 a Federal Pell Grant. 

9 ‘‘(C) An explanation of why a student may 

10 have to repay the Federal Pell Grant. 

11 ‘‘(D) An explanation of the maximum 

12 number of semesters or equivalent for which the 

13 student may be eligible to receive a Federal Pell 

14 Grant, and a statement of the amount of time 

15 remaining for which the student may be eligible 

16 to receive a Federal Pell Grant. 

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

18 may budget for typical educational expenses 

19 and a sample budget based on the cost of at20 tendance for the institution. 

21 ‘‘(F) An explanation of how the student 

22 may seek additional financial assistance from 

23 the institution’s financial aid office due to a 

24 change in the student’s financial circumstances, 

25 and the contact information for such office.’’. 


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1 SEC. 5. ONLINE COUNSELING TOOLS. 

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

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

4 the following: 

5 ‘‘(o) ONLINE COUNSELING TOOLS.— 

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

7 year after the date of enactment of the Empowering 

8 Students Through Enhanced Financial Counseling 

9 Act, the Secretary shall maintain— 

10 ‘‘(A) an online counseling tool that pro11 vides the exit counseling required under sub12 section (b) and meets the applicable require13 ments of this subsection; 

14 ‘‘(B) an online counseling tool that pro15 vides the annual counseling required under sub16 section (l) and meets the applicable require17 ments of this subsection; and 

18 ‘‘(C) an online counseling tool that pro19 vides the Federal Pell Grant counseling re20 quired under subsection (n) and meets the ap21 plicable requirements of this subsection. 

22 ‘‘(2) REQUIREMENTS OF TOOLS.—In maintain23 ing the online counseling tools described in para24 graph (1), the Secretary shall ensure— 

25 ‘‘(A) in the case of the online counseling 

26 tools described in subparagraphs (A) and (B) of 


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1 paragraph (1), each such tool is consumer test2 ed to ensure that the tool is effective in helping 

3 students understand their rights and obligations 

4 with respect to borrowing a loan made under 

5 part D; 

6 ‘‘(B) in the case of the online tool de7 scribed in paragraph (1)(C), the tool is con8 sumer tested to ensure that such tool is effec9 tive in helping students understand their rights 

10 and obligations with respect to receiving a Fed11 eral Pell Grant; and 

12 ‘‘(C) each such tool is understandable to 

13 students and freely available to all eligible insti14 tutions. 

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 students have received counseling using 

20 the tool, and notify the applicable institutions 

21 of the students’ completion of such counseling; 

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

23 annual counseling using the tool described in 

24 paragraph (1)(B), notify the student by when 

25 the student should accept, in a manner deVerDate Mar 15 2010 20:23 Jul 07, 2014 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H4984.IH H4984

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1 scribed in section 485(l)(3), the loan for which 

2 the student has received such counseling; and 

3 ‘‘(C) in the case of a student described in 

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

5 the online counseling tool described in para6 graph (1)(A) of this subsection, the Secretary 

7 shall attempt to provide the information de8 scribed in subsection (b)(1)(A) to the student 

9 through such tool.’’. 

Æ 


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