II 

110TH CONGRESS 

1ST SESSION S. 1401 

To improve the National Student Loan Data System. 

IN THE SENATE OF THE UNITED STATES 

MAY 15, 2007 

Mr. ENZI (for himself, Mr. ALEXANDER, Mr. ALLARD, Mr. BURR, Mr. 

ISAKSON, Mr. ROBERTS, and Ms. MURKOWSKI) introduced the following 

bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To improve the National Student Loan Data System. 

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 ‘‘Student Financial Aid 

5 Data Privacy Protection Act’’. 

6 SEC. 2. NATIONAL STUDENT LOAN DATA SYSTEM. 

7 Section 485B of the Higher Education Act of 1965 

8 (20 U.S.C. 1092b) is amended— 

9 (1) by redesignating subsections (d) through (g) 

10 as subsections (e) through (h), respectively; 


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1 (2) by inserting after subsection (c) the fol2 lowing: 

3 ‘‘(d) PRINCIPLES FOR ADMINISTERING THE DATA

4 SYSTEM.—In managing the National Student Loan Data 

5 System, the Secretary shall take actions necessary to 

6 maintain confidence in the data system, including, at a 

7 minimum— 

8 ‘‘(1) ensuring that the primary purpose of ac9 cess to the data system by guaranty agencies, eligi10 ble lenders, and eligible institutions of higher edu11 cation is for legitimate program operations, such as 

12 the need to verify the eligibility of a student, poten13 tial student, or parent for loans under part B, D, or 

14 E; 

15 ‘‘(2) prohibiting nongovernmental researchers 

16 and policy analysts from accessing personally identi17 fiable information; 

18 ‘‘(3) creating a disclosure form for students and 

19 potential students that is distributed when such stu20 dents complete the common financial reporting form 

21 under section 483, and as a part of the exit coun22 seling process under section 485(b), that— 

23 ‘‘(A) informs the students that any title IV 

24 grant or loan the students receive will be in25 cluded in the National Student Loan Data SysVerDate Aug 31 2005 04:24 May 17, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1401.IS S1401

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1 tem, and instructs the students on how to ac2 cess that information; 

3 ‘‘(B) describes the categories of individuals 

4 or entities that may access the data relating to 

5 such grant or loan through the data system, 

6 and for what purposes access is allowed; 

7 ‘‘(C) defines and explains the categories of 

8 information included in the data system; 

9 ‘‘(D) provides a summary of the provisions 

10 of the Federal Educational Rights and Privacy 

11 Act of 1974 and other applicable Federal pri12 vacy statutes, and a statement of the students’ 

13 rights and responsibilities with respect to such 

14 statutes; 

15 ‘‘(E) explains the measures taken by the 

16 Department to safeguard the students’ data; 

17 and 

18 ‘‘(F) includes other information as deter19 mined appropriate by the Secretary; 

20 ‘‘(4) requiring guaranty agencies, eligible lend21 ers, and eligible institutions of higher education that 

22 enter into an agreement with a potential student, 

23 student, or parent of such student regarding a loan 

24 under part B, D, or E, to inform the student or par25 ent that such loan shall be— 


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1 ‘‘(A) submitted to the data system; and 

2 ‘‘(B) accessible to guaranty agencies, eligi3 ble lenders, and eligible institutions of higher 

4 education determined by the Secretary to be au5 thorized users of the data system; 

6 ‘‘(5) regularly reviewing the data system to— 

7 ‘‘(A) delete inactive users from the data 

8 system; 

9 ‘‘(B) ensure that the data in the data sys10 tem are not being used for marketing purposes; 

11 and 

12 ‘‘(C) monitor the use of the data system by 

13 guaranty agencies and eligible lenders to deter14 mine whether an agency or lender is accessing 

15 the records of students in which the agency or 

16 lender has no existing financial interest; and 

17 ‘‘(6) developing standardized protocols for lim18 iting access to the data system that include— 

19 ‘‘(A) collecting data on the usage of the 

20 data system to monitor whether access has been 

21 or is being used contrary to the purposes of the 

22 data system; 

23 ‘‘(B) defining the steps necessary for de24 termining whether, and how, to deny or restrict 

25 access to the data system; and 


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1 ‘‘(C) determining the steps necessary to re2 open access to the data system following a de3 nial or restriction of access.’’; and 

4 (3) by striking subsection (e) (as redesignated 

5 by paragraph (1)) and inserting the following: 

6 ‘‘(e) REPORTS TO CONGRESS.— 

7 ‘‘(1) ANNUAL REPORT.—Not later than Sep8 tember 30 of each fiscal year, the Secretary shall 

9 prepare and submit to the appropriate committees of 

10 Congress a report describing— 

11 ‘‘(A) the results obtained by the establish12 ment and operation of the National Student 

13 Loan Data System authorized by this section; 

14 ‘‘(B) the effectiveness of existing privacy 

15 safeguards in protecting student and parent in16 formation in the data system; 

17 ‘‘(C) the success of any new authorization 

18 protocols in more effectively preventing abuse of 

19 the data system; 

20 ‘‘(D) the ability of the Secretary to mon21 itor how the system is being used, relative to 

22 the intended purposes of the data system; and 

23 ‘‘(E) any protocols developed under sub24 section (d)(6) during the preceding fiscal year. 

25 ‘‘(2) STUDY.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 conduct a study regarding— 

3 ‘‘(i) available mechanisms for pro4 viding students and parents with the abil5 ity to opt in or opt out of allowing eligible 

6 lenders to access their records in the Na7 tional Student Loan Data System; and 

8 ‘‘(ii) appropriate protocols for limiting 

9 access to the data system, based on the 

10 risk assessment required under subchapter 

11 III of chapter 35 of title 44, United States 

12 Code. 

13 ‘‘(B) SUBMISSION OF STUDY.—Not later 

14 than 3 years after the date of enactment of the 

15 Student Financial Aid Data Privacy Protection 

16 Act, the Secretary shall prepare and submit a 

17 report on the findings of the study to the ap18 propriate committees of Congress.’’. 

Æ 


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