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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4984 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Empowering Students Through Enhanced 
Financial Counseling Act''.

SEC. 2. ANNUAL COUNSELING.

    Section 485(l) of the Higher Education Act of 1965 (20 U.S.C. 
1092(l)) is amended--
            (1) in the subsection heading, by striking ``Entrance'' and 
        inserting ``Annual'';
            (2) in paragraph (1)--
                    (A) in the paragraph heading, by striking 
                ``disbursement'' and inserting ``acceptance'';
                    (B) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by striking ``at or prior to'' 
                                and inserting ``prior to or in 
                                conjunction with''; and
                                    (II) by striking ``a disbursement 
                                to a first-time borrower of a loan 
                                made, insured, or guaranteed under part 
                                B (other than a loan made pursuant to 
                                section 428C or a loan made on behalf 
                                of a student pursuant to section 428B) 
                                or'' and inserting ``acceptance (in a 
                                manner described in subparagraph (A), 
                                (B), or (C) of paragraph (4)) by a 
                                borrower of a loan''; and
                            (ii) in clause (ii)--
                                    (I) in the matter preceding 
                                subclause (I)--
                                            (aa) by striking ``may'' 
                                        and inserting ``shall''; and
                                            (bb) by inserting ``, for 
                                        each award year for which the 
                                        borrower receives a loan made 
                                        under part D'' after 
                                        ``provided'';
                                    (II) in subclause (I), by striking 
                                ``an entrance counseling session 
                                conduction in person'' and inserting 
                                ``a counseling session conducted in 
                                person'';
                                    (III) by striking subclause (II);
                                    (IV) by redesignating subclause 
                                (III) as subclause (II);
                                    (V) in subclause (II), as so 
                                redesignated, by striking the period at 
                                the end and inserting ``; or''; and
                                    (VI) by adding at the end the 
                                following:
                                    ``(III) through the use of the 
                                online counseling tool described in 
                                subsection (o)(1)(B).''; and
                    (C) in subparagraph (B)--
                            (i) by striking ``The Secretary'' and 
                        inserting ``In the case of institutions not 
                        using the online counseling tool described in 
                        subsection (o)(1)(B), the Secretary'';
                            (ii) by striking ``encourage institutions'' 
                        and inserting ``require such institutions'';
                            (iii) by inserting ``, during an annual 
                        counseling session that is in-person or 
                        online,'' after ``the use''; and
                            (iv) by striking ``B or'';
            (3) in paragraph (2)--
                    (A) by redesignating subparagraphs (C) through (G) 
                and subparagraphs (H) through (K), as subparagraphs (H) 
                through (L), respectively, and subparagraphs (N) 
                through (Q), respectively; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) An explanation that the borrower is not 
                required to accept the full amount of the loan offered 
                to the borrower.
                    ``(D) An explanation that the borrower should 
                consider accepting any grant, scholarship, or State or 
                Federal work-study jobs for which the borrower is 
                eligible prior to accepting Federal student loans.
                    ``(E) A recommendation to the borrower to exhaust 
                the borrower's Federal student loan options prior to 
                taking out private loans and a warning that private 
                loans may not offer the same benefits and repayment 
                options as Federal student loans.
                    ``(F) An explanation of the approved educational 
                expenses for which the borrower may use a loan made 
                under part D.
                    ``(G) Information on the annual and aggregate loan 
                limits for Federal Direct Stafford Loans and Federal 
                Direct Unsubsidized Stafford Loans.'';
                    (C) in subparagraph (I), as so redesignated--
                            (i) by striking ``a loan made under section 
                        428B or 428H,''; and
                            (ii) by striking ``, or a'' and inserting 
                        ``or a'';
                    (D) in subparagraph (L), as so redesignated--
                            (i) in the matter preceding clause (i), by 
                        striking ``Sample'' and inserting ``For a 
                        first-time borrower, sample'';
                            (ii) in clause (i)(I), by striking ``loans 
                        under section 428 or 428H'' and inserting 
                        ``Federal Direct Stafford Loans or Federal 
                        Direct Unsubsidized Stafford Loans''; and
                            (iii) in clause (i)(II), by striking 
                        ``loans under section 428, 428B, or 428H'' and 
                        inserting ``Federal Direct PLUS Loans or 
                        Federal Direct Unsubsidized Stafford Loans'';
                    (E) by inserting after subparagraph (L), as so 
                redesignated and amended, the following:
                    ``(M) For a borrower with an outstanding balance of 
                principal or interest due on a loan made under this 
                title--
                            ``(i) a statement of the amount of such 
                        outstanding balance;
                            ``(ii) based on such outstanding balance, 
                        the anticipated monthly payment amount under 
                        each repayment plan that may be available to 
                        the borrower; and
                            ``(iii) based on such outstanding balance 
                        plus the anticipated outstanding balance on the 
                        loan for which the student is receiving 
                        counseling under this subsection and on any 
                        other Federal student loans that the borrower 
                        may accept during the borrower's course of 
                        study for which the borrower enrolled at the 
                        institution, an estimate of the projected 
                        monthly payment amount under each such 
                        repayment plan.''; and
                    (F) in subparagraph (Q), as so redesignated--
                            (i) by striking ``name of and''; and
                            (ii) by striking ``individual'' and 
                        inserting ``institution's financial aid office 
                        or other appropriate office at the 
                        institution''; and
            (4) by adding at the end the following:
            ``(3) Annual loan acceptance.--Prior to making the first 
        disbursement of a loan made under part D (other than a Federal 
        Direct Consolidation Loan or a Federal Direct PLUS loan made on 
        behalf of a student) to a borrower for an award year, an 
        eligible institution, shall, as part of carrying out the 
        counseling requirements of this subsection for the loan, ensure 
        that the borrower accepts the loan for such award year by--
                    ``(A) signing the master promissory note for the 
                loan;
                    ``(B) signing and returning to the institution a 
                separate written statement that affirmatively states 
                that the borrower accepts the loan; or
                    ``(C) electronically signing an electronic version 
                of the statement described in subparagraph (B).''.

SEC. 3. EXIT COUNSELING.

    Section 485(b) of the Higher Education Act of 1965 (20 U.S.C. 
1092(b)) is amended--
            (1) in paragraph (1)(A)--
                    (A) in the matter preceding clause (i)--
                            (i) by striking ``through financial aid 
                        offices or otherwise'' and inserting ``through 
                        the use of an interactive program, during an 
                        exit counseling session that is in-person or 
                        online, or through the use of the online 
                        counseling tool described in subsection 
                        (o)(1)(A)'';
                            (ii) by redesignating clauses (i) through 
                        (ix) as clauses (iv) through (xii), 
                        respectively;
                            (iii) by inserting before clause (iv), as 
                        so redesignated, the following:
                            ``(i) a summary of the outstanding balance 
                        of principal and interest due on the loans made 
                        to the borrower under part B, D, or E;
                            ``(ii) an explanation of the grace period 
                        preceding repayment and the expected date that 
                        the borrower will enter repayment;
                            ``(iii) an explanation that the borrower 
                        has the option to pay any interest that has 
                        accrued while the borrower was in school or 
                        that may accrue during the grace period 
                        preceding repayment or during an authorized 
                        period of deferment or forbearance, prior to 
                        the capitalization of the interest;'';
                            (iv) in clause (iv), as so redesignated, by 
                        striking ``sample information showing the 
                        average'' and inserting ``information, based on 
                        the borrower's outstanding balance described in 
                        clause (i), showing the borrower's'';
                            (v) in clause (x), as so redesignated, by 
                        striking ``consolidation loan under section 
                        428C or a''; and
                            (vi) by adding at the end the following:
                            ``(xiii) for each of the borrower's loans 
                        made under part B, D, or E for which the 
                        borrower is receiving counseling under this 
                        subsection, the contact information for the 
                        loan servicer of the loan and a link to such 
                        servicer's Website.'';
            (2) in paragraph (1)(B)--
                    (A) by inserting ``online or'' before ``in 
                writing''; and
                    (B) by adding before the period at the end the 
                following: ``, except that in the case of an 
                institution using the online counseling tool described 
                in subsection (o)(1)(A), the Secretary shall attempt to 
                provide such information to the student in the manner 
                described in subsection (o)(3)(C)''; and
            (3) in paragraph (2)(C), by inserting ``, such as the 
        online counseling tool described in subsection (o)(1)(A),'' 
        after ``electronic means''.

SEC. 4. ANNUAL COUNSELING FOR FEDERAL PELL GRANT RECIPIENTS.

    Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is 
amended by adding at the end the following:
    ``(n) Annual Counseling for Federal Pell Grant Recipients.--
            ``(1) Disclosure required prior to disbursement of federal 
        pell grant.--
                    ``(A) In general.--Each eligible institution shall, 
                prior to the first payment of a Federal Pell Grant to a 
                student for an award year, ensure that the student 
                receives comprehensive information on the terms and 
                conditions of the Federal Pell Grant in accordance with 
                paragraph (2). Such information--
                            ``(i) shall be provided in a simple and 
                        understandable manner; and
                            ``(ii) shall be provided, for each award 
                        year for which the student receives a Federal 
                        Pell Grant--
                                    ``(I) during a counseling session 
                                conducted in person;
                                    ``(II) online, with the student 
                                acknowledging receipt of the 
                                information; or
                                    ``(III) through the use of the 
                                online counseling tool described in 
                                subsection (o)(1)(C).
                    ``(B) Use of interactive programs; joint counseling 
                permitted.--In the case of institutions not using the 
                online counseling tool described in subsection 
                (o)(1)(C)--
                            ``(i) the Secretary shall require such 
                        institutions to carry out the requirements of 
                        subparagraph (A) through the use, during an 
                        annual counseling session that is in-person or 
                        online, of interactive programs that test the 
                        student's understanding of the terms and 
                        conditions of the Federal Pell Grant paid to 
                        the student, using simple and understandable 
                        language and clear formatting; and
                            ``(ii) an annual counseling session 
                        described in subclause (I) or (II) of 
                        subparagraph (A)(ii) for a student may be 
                        conducted in conjunction with an annual 
                        counseling session described in subclause (I) 
                        or (II) of subsection (l)(1)(A)(ii) for such 
                        student.
            ``(2) Information to be provided.--The information to be 
        provided to the student under paragraph (1)(A) shall include 
        the following:
                    ``(A) An explanation of a Federal Pell Grant.
                    ``(B) An explanation of approved educational 
                expenses for which the student may use a Federal Pell 
                Grant.
                    ``(C) An explanation of why a student may have to 
                repay the Federal Pell Grant.
                    ``(D) An explanation of the maximum number of 
                semesters or equivalent for which the student may be 
                eligible to receive a Federal Pell Grant, and a 
                statement of the amount of time remaining for which the 
                student may be eligible to receive a Federal Pell 
                Grant.
                    ``(E) An explanation of how the student may budget 
                for typical educational expenses and a sample budget 
                based on the cost of attendance for the institution.
                    ``(F) An explanation of how the student may seek 
                additional financial assistance from the institution's 
                financial aid office due to a change in the student's 
                financial circumstances, and the contact information 
                for such office.''.

SEC. 5. ONLINE COUNSELING TOOLS.

    Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is 
further amended by adding at the end the following:
    ``(o) Online Counseling Tools.--
            ``(1) In general.--Beginning not later than 1 year after 
        the date of enactment of the Empowering Students Through 
        Enhanced Financial Counseling Act, the Secretary shall 
        maintain--
                    ``(A) an online counseling tool that provides the 
                exit counseling required under subsection (b) and meets 
                the applicable requirements of this subsection;
                    ``(B) an online counseling tool that provides the 
                annual counseling required under subsection (l) and 
                meets the applicable requirements of this subsection; 
                and
                    ``(C) an online counseling tool that provides the 
                Federal Pell Grant counseling required under subsection 
                (n) and meets the applicable requirements of this 
                subsection.
            ``(2) Requirements of tools.--In maintaining the online 
        counseling tools described in paragraph (1), the Secretary 
        shall ensure--
                    ``(A) in the case of the online counseling tools 
                described in subparagraphs (A) and (B) of paragraph 
                (1), each such tool is consumer tested to ensure that 
                the tool is effective in helping students understand 
                their rights and obligations with respect to borrowing 
                a loan made under part D;
                    ``(B) in the case of the online tool described in 
                paragraph (1)(C), the tool is consumer tested to ensure 
                that such tool is effective in helping students 
                understand their rights and obligations with respect to 
                receiving a Federal Pell Grant; and
                    ``(C) each such tool is understandable to students 
                and freely available to all eligible institutions.
            ``(3) Record of counseling completion.--The Secretary 
        shall--
                    ``(A) use each online counseling tool described in 
                paragraph (1) to keep a record of which students have 
                received counseling using the tool, and notify the 
                applicable institutions of the students' completion of 
                such counseling;
                    ``(B) in the case of a student who receives annual 
                counseling using the tool described in paragraph 
                (1)(B), notify the student by when the student should 
                accept, in a manner described in section 485(l)(3), the 
                loan for which the student has received such 
                counseling; and
                    ``(C) in the case of a student described in 
                subsection (b)(1)(B) at an institution that uses the 
                online counseling tool described in paragraph (1)(A) of 
                this subsection, the Secretary shall attempt to provide 
                the information described in subsection (b)(1)(A) to 
                the student through such tool.''.
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