II 

113TH CONGRESS 

2D SESSION S. 2459 

To revise counseling requirements for certain borrowers of student loans 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 10, 2014 

Mr. GRASSLEY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To revise counseling requirements for certain borrowers of 

student loans 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 ‘‘Know Before You Owe 

5 Federal Student Loan Act of 2014’’. 

6 SEC. 2. PRE-LOAN COUNSELING AND CERTIFICATION OF 

7 LOAN AMOUNT. 

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

9 (20 U.S.C. 1092(l)) is amended— 


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1 (1) in the subsection heading, by striking ‘‘EN2 TRANCE COUNSELING’’ and inserting ‘‘PRE-LOAN

3 COUNSELING’’; 

4 (2) in paragraph (1)— 

5 (A) in subparagraph (A)— 

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

7 by striking ‘‘a disbursement to a first-time 

8 borrower of a loan’’ and inserting ‘‘the 

9 first disbursement of each new loan (or the 

10 first disbursement in each award year if 

11 more than one new loan is obtained in the 

12 same award year)’’; and 

13 (B) in clause (ii)(I), by striking ‘‘an en14 trance counseling’’ and inserting ‘‘a coun15 seling’’; 

16 (3) in paragraph (2)— 

17 (A) by striking clause (i) of subparagraph 

18 (G) and inserting the following: 

19 ‘‘(i) an estimate of the borrower’s pro20 jected loan debt-to-income ratio upon grad21 uation, calculated using the best available 

22 data on starting wages for the borrower’s 

23 program of study and the estimated total 

24 student loan debt, including Federal and 

25 private loan debt already incurred and the 


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1 estimated future debt required to complete 

2 the program of study; and’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(L) A statement that the borrower should 

5 borrow the minimum amount necessary to cover 

6 expenses and that the borrower does not have 

7 to accept the full amount of loans for which the 

8 borrower is eligible. 

9 ‘‘(M) Information about the default risk of 

10 having a projected loan debt-to-income ratio 

11 greater than 12 percent. 

12 ‘‘(N) Options for reducing borrowing 

13 through scholarships, reduced expenses, work14 study, or other work opportunities. 

15 ‘‘(O) An explanation of the importance of 

16 graduating on time to avoid additional bor17 rowing, and information on how adding an ad18 ditional year of study impacts total indebted19 ness.’’; and 

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

21 ‘‘(3) In addition to the other requirements of 

22 this subsection, each eligible institution shall, prior 

23 to certifying a Federal direct loan under part D for 

24 disbursement to a student (other than a Federal Di25 rect Consolidation Loan or a Federal Direct PLUS 


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1 loan made on behalf of a student), ensure that the 

2 student manually enter, either in writing or through 

3 electronic means, the exact dollar amount of Federal 

4 direct loan funding under part D that such student 

5 desires to borrow.’’. 

6 SEC. 3. CONFORMING AMENDMENTS. 

7 (a) PROGRAM PARTICIPATION AGREEMENTS.—Sec8 tion 487(e)(2)(B)(ii)(IV) of Higher Education Act of 1965 

9 (20 U.S.C. 1094(e)(2)(B)(ii)(IV)) is amended— 

10 (1) by striking ‘‘Entrance and exit counseling’’ 

11 and inserting ‘‘Pre-loan and exit counseling’’; and 

12 (2) by striking ‘‘entrance and exit counseling’’ 

13 and inserting ‘‘pre-loan and exit counseling’’. 

14 (b) REGULATORY RELIEF AND IMPROVEMENT.—Sec15 tion 487A of Higher Education Act of 1965 (20 U.S.C. 

16 1094a) is amended by striking ‘‘entrance and exit inter17 views’’ and inserting ‘‘pre-loan and exit interviews’’ each 

18 place the term appears. 

Æ 


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