I

107TH CONGRESS

1ST SESSION H. R. 1622

To reduce the costs of Federal student loans to students and their families,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 26, 2001

Mr. GEORGE MILLER of California (for himself, Mrs. MINK of Hawaii, Ms.

WOOLSEY, Ms. SOLIS, Mr. ANDREWS, Mr. WU, Mr. KILDEE, and Mr.

HINOJOSA) introduced the following bill; which was referred to the Committee on Education and the Workforce

A BILL

To reduce the costs of Federal student loans to students

and their families, 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 ‘‘Affordable Student

5 Loans Act of 2001’’.

6 SEC. 2. ELIMINATION OF LOAN FEES TO BORROWERS.

7 (a) FEDERAL FAMILY EDUCATION LOAN PRO8 GRAM.—Section 438(c) of the Higher Education Act of
2

•HR 1622 IH

1 1965 (20 U.S.C. 1087–1(c)) is amended by adding at the

2 end the following new paragraph :

3 ‘‘(9) ORIGINATION FEES TERMINATED.—Not4 withstanding any other provision of this subsection,

5 with respect to any loan made, insured, or guaran6 teed under this part on or after the first July 1 after

7 the date of enactment of the Affordable Student

8 Loans Act of 2001—

9 ‘‘(A) no eligible lender may collect directly

10 or indirectly from any borrower any origination

11 fee with respect to such loan, or any other fee

12 relating to the origination of a loan however de13 scribed; and

14 ‘‘(B) the Secretary shall not collect any

15 origination fee from the lender under this sub16 section.’’.

17 (b) FEDERAL DIRECT LOAN PROGRAM.—Section

18 455(c) of such Act (20 U.S.C. 1087e(c)) is amended to

19 read as follows:

20 ‘‘(c) LOAN FEE.—

21 ‘‘(1) TEMPORARY PROVISION.—Subject to para22 graph (2), the Secretary shall charge the borrower

23 of a loan made under this part an origination fee of

24 4.0 percent of the principal amount of loan.
3

•HR 1622 IH

1 ‘‘(2) TERMINATION OF ORIGINATION FEE.—

2 With respect to any loan made under this part on

3 or after the first July 1 after the date of enactment

4 of Affordable Student Loans Act of 2001, the Sec5 retary shall not collect directly or indirectly from

6 any borrower any origination fee with respect to

7 such loan, or any other fee relating to the origina8 tion of a loan however described.’’.

9 SEC. 3. INSURANCE PREMIUMS.

10 (a) FFEL PROGRAM.—

11 (1) SUBSIDIZED LOANS.—Section 428(b)(1) of

12 the Higher Education Act of 1965 (20 U.S.C.

13 1078(b)(1)) is amended by striking subparagraph

14 (H) and inserting the following:

15 ‘‘(H) does not provide or permit the collec16 tion of any insurance premium directly or indi17 rectly from the borrower or from the proceeds

18 of any loan to the borrower;’’.

19 (2) UNSUBSIDIZED LOANS.—Section 428H of

20 such Act (20 U.S.C. 1078–8) is amended by striking

21 subsection (h) and inserting the following:

22 ‘‘(h) INSURANCE PREMIUMS PROHIBITED.—A State

23 or nonprofit private institution or organization having an

24 agreement with the Secretary under section 428(b)(1)

25 may not collect any insurance premium directly or indi-
4

•HR 1622 IH

1 rectly from the borrower or from the proceeds of any loan

2 to the borrower pursuant to this section.’’.

3 (b) EFFECTIVE DATE.—The amendments made by

4 subsection (a) shall apply with respect to any loan made,

5 insured, or guaranteed under part B of title IV of the

6 Higher Education Act of 1965 on or after the first July

7 1 after the date of enactment of this Act.

8 SEC. 4. EXPANSION OF VOLUNTARY FLEXIBLE AGREE9 MENTS WITH GUARANTY AGENCIES.

10 (a) AMENDMENT.—Section 428A(a) of the Higher

11 Education Act of 1965 (20 U.S.C.1078–1(a)) is amended

12 by striking paragraph (3) and inserting the following:

13 ‘‘(3) ELIGIBILITY.—Any guaranty agency or

14 consortium thereof may enter into a voluntary flexi15 ble agreement with the Secretary.’’.

16 (b) IMMEDIATE EFFECTIVE DATE.—The amendment

17 made by subsection (a) shall take effect on the date of

18 enactment of this Act.

Æ