II 

108TH CONGRESS 

1ST SESSION S. 1968

To amend the Higher Education Act of 1965 to enhance literacy in finance 

and economics, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 25, 2003

Mr. ENZI (for himself, Mr. AKAKA, Mr. CORZINE, and Mr. SARBANES) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL

To amend the Higher Education Act of 1965 to enhance 

literacy in finance and economics, 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 ‘‘Financial Literacy in 

5 Higher Education Act’’. 

6 SEC. 2. AREAS OF EMPHASIS. 

7 Part B of title I of the Higher Education Act of 1965 

8 (20 U.S.C. 1011 et seq.) is amended by adding at the end 

9 the following: 
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1 ‘‘SEC. 123. AREAS OF EMPHASIS. 

2 ‘‘In carrying out activities under this Act related to 

3 improving financial and economic literacy, education, and 

4 counseling, the Secretary shall emphasize, among other 

5 elements, basic personal income and household money 

6 management and financial planning skills, and basic eco7 nomic decision making skills, including how to—

8 ‘‘(1) create household budgets, initiate savings 

9 plans, and make strategic investment decisions for 

10 education, employment, retirement, home ownership, 

11 wealth building, or other savings goals; 

12 ‘‘(2) manage credit and debt effectively, includ13 ing student financial aid and credit card debt, and 

14 understand the merits of establishing and maintain15 ing excellent credit history; 

16 ‘‘(3) understand, evaluate, and compare fair 

17 and favorable financial products, services, and op18 portunities, and avoid abusive, predatory, or decep19 tive financial products, services, and opportunities; 

20 ‘‘(4) complete tax returns and understand tax 

21 consequences when making certain financial deci22 sions, such as placing an investment or purchasing 

23 a home; 

24 ‘‘(5) identify economic problems, alternatives, 

25 benefits, and costs; 
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1 ‘‘(6) analyze the incentives at work in an eco2 nomic situation; 

3 ‘‘(7) examine the consequences of changes in 

4 economic conditions and public policies; 

5 ‘‘(8) collect and organize economic evidence, in6 cluding understanding, evaluating, and making stra7 tegic decisions using economic indicators; 

8 ‘‘(9) compare benefits with costs; and 

9 ‘‘(10) improve financial and economic literacy 

10 and education through all other related skills.’’. 

11 SEC. 3. COORDINATION. 

12 In carrying out the financial and economic literacy 

13 activities authorized under this Act and the amendments 

14 made by this Act, the Secretary of Education, to the great15 est extent practicable, shall coordinate such activities with 

16 the financial and economic literacy efforts of a Federal 

17 commission comprised of the following: 

18 (1) The Secretary of the Treasury. 

19 (2) The respective head of each of the following: 

20 (A) Each of the Federal banking agencies 

21 (as defined in section 3 of the Federal Deposit 

22 Insurance Act (12 U.S.C. 1813)). 

23 (B) The National Credit Union Adminis24 tration. 
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1 (C) The Securities and Exchange Commis2 sion. 

3 (D) Each of the Departments of Edu4 cation, Agriculture, Defense, Health and 

5 Human Services, Housing and Urban Develop6 ment, Labor, and Veterans Affairs. 

7 (E) The Federal Trade Commission. 

8 (F) The General Services Administration. 

9 (G) The Small Business Administration. 

10 (H) The Social Security Administration. 

11 (I) The Commodity Futures Trading Com12 mission. 

13 (J) The Office of Personnel Management. 

14 (3) At the discretion of the President, not more 

15 than 5 individuals appointed by the President from 

16 among the administrative heads of any other Fed17 eral agencies, departments, or other Government en18 tities, whom the President determines to be engaged 

19 in a serious effort to improve financial literacy and 

20 education. 

21 SEC. 4. ENHANCEMENT OF FINANCIAL LITERACY AND ECO22 NOMIC LITERACY. 

23 The Higher Education Act of 1965 (20 U.S.C. 1001 

24 et seq.) is amended—
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1 (1) in section 201(a)(3), by inserting ‘‘personal 

2 finance,’’ after ‘‘economics,’’; 

3 (2) in section 311(c)—

4 (A) by redesignating paragraphs (7) 

5 through (12) as paragraphs (8) through (13), 

6 respectively; and 

7 (B) by inserting after paragraph (6) the 

8 following: 

9 ‘‘(7) Education or counseling services designed 

10 to improve the financial literacy and economic lit11 eracy of students and their parents.’’; 

12 (3) in section 316(c)(2)—

13 (A) by redesignating subparagraphs (G) 

14 through (L) as subparagraphs (H) through 

15 (M), respectively; 

16 (B) by inserting after subparagraph (F) 

17 the following: 

18 ‘‘(G) education or counseling services de19 signed to improve the financial literacy and eco20 nomic literacy of students and their parents;’’; 

21 and 

22 (C) in subparagraph (M), as redesignated 

23 by subparagraph (A), by striking ‘‘subpara24 graphs (A) through (K)’’ and inserting ‘‘sub25 paragraphs (A) through (L)’’;
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1 (4) in section 317(c)(2)—

2 (A) in subparagraph (G), by striking 

3 ‘‘and’’ after the semicolon; 

4 (B) in subparagraph (H), by striking the 

5 period at the end and inserting ‘‘; and’’; and 

6 (C) by adding at the end the following: 

7 ‘‘(I) education or counseling services de8 signed to improve the financial literacy and eco9 nomic literacy of students and their parents.’’; 

10 (5) in section 323(a)—

11 (A) by redesignating paragraphs (7) 

12 through (12) as paragraphs (8) through (13), 

13 respectively; and 

14 (B) by inserting after paragraph (6) the 

15 following: 

16 ‘‘(7) Education or counseling services designed 

17 to improve the financial literacy and economic lit18 eracy of students and their parents.’’; 

19 (6) in section 326(c)—

20 (A) by redesignating paragraphs (5) 

21 through (7) as paragraphs (6) through (8), re22 spectively; and 

23 (B) by inserting after paragraph (4) the 

24 following: 
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1 ‘‘(5) education or counseling services designed 

2 to improve the financial literacy and economic lit3 eracy of students and their parents;’’; 

4 (7) in section 503(b)—

5 (A) by redesignating paragraphs (5) 

6 through (14) as paragraphs (6) through (15), 

7 respectively; and 

8 (B) by inserting after paragraph (4) the 

9 following: 

10 ‘‘(5) Education or counseling services designed 

11 to improve the financial literacy and economic lit12 eracy of students and their parents.’’; 

13 (8) in section 402B(b)—

14 (A) by redesignating paragraphs (3) 

15 through (10) as paragraphs (4) through (11), 

16 respectively; 

17 (B) by inserting after paragraph (2) the 

18 following: 

19 ‘‘(3) education or counseling services designed 

20 to improve the financial literacy and economic lit21 eracy of students and their parents;’’; and 

22 (C) in paragraph (11), as redesignated by 

23 subparagraph (A), by striking ‘‘paragraphs (1) 

24 through (9)’’ and inserting ‘‘paragraphs (1) 

25 through (10)’’; 
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1 (9) in section 402C—

2 (A) in subsection (b)—

3 (i) by redesignating paragraphs (2) 

4 through (12) as paragraphs (3) through 

5 (13), respectively; 

6 (ii) by inserting after paragraph (1) 

7 the following: 

8 ‘‘(2) education or counseling services designed 

9 to improve the financial literacy and economic lit10 eracy of students and their parents;’’; and 

11 (iii) in paragraph (13), as redesig12 nated by clause (i), by striking ‘‘para13 graphs (1) through (11)’’ and inserting 

14 ‘‘paragraphs (1) through (12)’’; and 

15 (B) in subsection (e), by striking ‘‘sub16 section (b)(10)’’ and inserting ‘‘subsection 

17 (b)(11)’’; 

18 (10) in section 402D(b)—

19 (A) by redesignating paragraphs (2) 

20 through (10) as paragraphs (3) through (11), 

21 respectively; 

22 (B) by inserting after paragraph (1) the 

23 following: 
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1 ‘‘(2) education or counseling services designed 

2 to improve the financial literacy and economic lit3 eracy of students and their parents;’’; and 

4 (C) in paragraph (11), as redesignated by 

5 subparagraph (A), by striking ‘‘paragraphs (1) 

6 through (9)’’ and inserting ‘‘paragraphs (1) 

7 through (10)’’; 

8 (11) in section 402E(b)—

9 (A) by redesignating paragraphs (7) and 

10 (8) as paragraphs (8) and (9), respectively; and 

11 (B) by inserting after paragraph (6) the 

12 following: 

13 ‘‘(7) education or counseling services designed 

14 to improve the financial literacy and economic lit15 eracy of students and their parents;’’; 

16 (12) in section 402F(b)—

17 (A) by redesignating paragraphs (4) 

18 through (10) as paragraphs (5) through (11), 

19 respectively; 

20 (B) by inserting after paragraph (3) the 

21 following: 

22 ‘‘(4) education or counseling services designed 

23 to improve the financial literacy and economic lit24 eracy of students and their parents;’’; and 
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1 (C) in paragraph (11), as redesignated by 

2 subparagraph (A), by striking ‘‘paragraphs (1) 

3 through (9)’’ and inserting ‘‘paragraphs (1) 

4 through (10)’’; 

5 (13) in section 404D(b)(2)(A)(ii), by striking 

6 ‘‘and academic counseling’’ and inserting ‘‘academic 

7 counseling, and financial literacy and economic lit8 eracy education or counseling’’; 

9 (14) by striking section 418A(c)(1)(B)(i) and 

10 inserting the following: 

11 ‘‘(i) personal, academic, career, and eco12 nomic education or personal finance counseling 

13 as an ongoing part of the program;’’; 

14 (15) in section 428F, by adding at the end the 

15 following: 

16 ‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where 

17 appropriate, each program described under subsection (b) 

18 shall include making available financial and economic edu19 cation materials for the borrower.’’; 

20 (16) in section 432(k)(1), by striking ‘‘and of21 fering’’ and all that follows through the period and 

22 inserting ‘‘, offering loan repayment matching provi23 sions as part of employee benefit packages, and pro24 viding employees with financial and economic edu25 cation and counseling.’’;
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1 (17) in section 441(c)—

2 (A) in paragraph (1), by inserting ‘‘finan3 cial literacy and economic literacy,’’ after ‘‘so4 cial services,’’; and 

5 (B) in paragraph (4)(C), by striking the 

6 period at the end and inserting ‘‘and counseling 

7 for the purposes of improving financial literacy 

8 and economic literacy.’’; 

9 (18) in section 485—

10 (A) in subsection (a)(1)(D), by striking the 

11 semicolon at the end and inserting ‘‘, including 

12 the merits of taking a personal finance course, 

13 if the institution offers such a course, and of 

14 the student reviewing the student’s personal 

15 credit profile not less frequently than once a 

16 year;’’; 

17 (B) in subsection (b)—

18 (i) in paragraph (1)(A)—

19 (I) in clause (i), by striking 

20 ‘‘and’’ after the semicolon; 

21 (II) in clause (ii), by striking the 

22 period at the end and inserting ‘‘; 

23 and’’; and 

24 (III) by adding at the end the 

25 following: 
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1 ‘‘(iii) if it is determined during the 

2 counseling that the borrower is not con3 nected to a mainstream financial institu4 tion, information about low-cost financial 

5 services and the benefits of using such 

6 services, and where and how the borrower 

7 could open a low-cost account in a feder8 ally insured credit union or bank.’’; and 

9 (ii) by adding at the end the fol10 lowing: 

11 ‘‘(3) PILOT PROGRAM.—

12 ‘‘(A) AUTHORIZATION.—

13 ‘‘(i) IN GENERAL.—The Secretary 

14 shall establish a pilot program that awards 

15 a total of 5 grants to 5 different institu16 tions of higher education that are located 

17 in geographically different parts of the 

18 United States to enable the institutions to 

19 provide annual personal finance counseling 

20 for students enrolled at such institutions. 

21 ‘‘(ii) MINORITY SERVING INSTITU22 TIONS.—In awarding grants under this 

23 paragraph, the Secretary shall award not 

24 less than 2 of the 5 grants to institutions 
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1 of higher education that are eligible to re2 ceive assistance under title III or title V. 

3 ‘‘(B) APPLICATION.—An institution of 

4 higher education that desires to receive a grant 

5 under this paragraph shall submit an applica6 tion to the Secretary at such time, in such man7 ner, and containing such information as the 

8 Secretary may require. 

9 ‘‘(C) USE OF FUNDS.—

10 ‘‘(i) COUNSELING.—

11 ‘‘(I) IN GENERAL.—In addition 

12 to making available exit counseling 

13 under paragraph (1), an institution of 

14 higher education that receives a grant 

15 under this paragraph shall through fi16 nancial aid officers or otherwise, make 

17 available counseling to borrowers of 

18 loans which are made, insured, or 

19 guaranteed under part B (other than 

20 loans made pursuant to section 428B) 

21 of this title or made under part D or 

22 E of this title at the commencement 

23 of the borrower’s course of study at 

24 the institution, not less frequently 

25 than once annually while the borrower 
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1 is enrolled at the institution, and not 

2 later than 30 days after completion of 

3 the course of study for which the bor4 rower enrolled at the institution or at 

5 the time of departure from such insti6 tution. 

7 ‘‘(II) CONTENT.—The counseling 

8 required under subclause (I) shall in9 clude the average anticipated monthly 

10 repayments, a review of the repay11 ment options available, the total 

12 amount of interest that would be paid 

13 over a range of possible interest rates 

14 and the amount of interest in the 

15 monthly payments, information on the 

16 availability and content of a personal 

17 finance course if such course is of18 fered by the institution and if not al19 ready completed by the individual, and 

20 such debt and management strategies 

21 as the institution determines are de22 signed to facilitate the repayment of 

23 such indebtedness, which may be im24 plemented in partnership with State 

25 or local public, private, and nonprofit
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1 entities approved by the local edu2 cational agency that serves schools in 

3 the area where the institution is lo4 cated, or a campus committee formed 

5 for the purpose of evaluating the 

6 qualifications of such entities. If it is 

7 determined during the counseling that 

8 the borrower is not connected to a 

9 mainstream financial institution, the 

10 counseling shall include information 

11 about low-cost financial services and 

12 the benefits of using such services, 

13 and where and how the borrower 

14 could open a low-cost account in a 

15 federally insured credit union or bank. 

16 ‘‘(ii) PERMISSIVE USE.—Grant funds 

17 received under this paragraph may be used 

18 to pay for additional financial aid per19 sonnel or for training for existing financial 

20 aid personnel. 

21 ‘‘(iii) STUDY.—

22 ‘‘(I) IN GENERAL.—An institu23 tion of higher education that receives 

24 a grant under this paragraph shall 

25 conduct a study to evaluate the im-
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1 pacts, if any, of the financial and eco2 nomic literacy and counseling activi3 ties on students’ levels of savings and 

4 indebtedness, and creditworthiness, 

5 and such activities’ effectiveness in re6 ducing the incidence of problems with 

7 handling credit, including bankruptcy 

8 filing and student financial loan de9 fault. 

10 ‘‘(II) ASSISTANCE.—An institu11 tion of higher education may conduct 

12 the study under subclause (I) with the 

13 assistance of appropriate Federal 

14 agencies or other entities approved by 

15 the Secretary. 

16 ‘‘(III) REPORT.—Not later than 

17 6 months after completion of the 

18 study under subclause (I), the institu19 tion of higher education shall report 

20 the results of such study to the Sec21 retary, the Secretary of the Treasury, 

22 the Committee on Health, Education, 

23 Labor, and Pensions of the Senate, 

24 the Committee on Banking, Housing, 

25 and Urban Affairs of the Senate, the 
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1 Committee on Education and the 

2 Workforce of the House of Represent3 atives, and the Committee on Finan4 cial Services of the House of Rep5 resentatives. 

6 ‘‘(D) DURATION.—Grants awarded under 

7 this paragraph shall be for a period of 3 years. 

8 ‘‘(E) AMOUNT.—The Secretary shall award 

9 grants of not more than $1,000,000 annually to 

10 each institution of higher education awarded a 

11 grant under this paragraph. The Secretary may 

12 determine the grant award amount based on 

13 the number of students to be counseled at the 

14 institution of higher education. 

15 ‘‘(F) REPORT.—Not later than 90 days 

16 after the date of completion of the pilot pro17 gram under this paragraph, the Secretary shall 

18 submit a report to Congress on the effectiveness 

19 of the program. 

20 ‘‘(G) AUTHORIZATION OF APPROPRIA21 TIONS.—There is authorized to be appropriated 

22 to carry out this paragraph such sums as may 

23 be necessary for each of fiscal years 2005 

24 through 2009.’’; and 
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1 (C) in subsection (c), by adding at the end 

2 the following: ‘‘Appropriate Federal agencies 

3 shall provide material developed by such agen4 cies for the purpose of financial education, to fi5 nancial assistance information personnel at in6 stitutions of higher education for the use of 

7 such personnel in financial aid counseling.’’; 

8 and 

9 (19) in section 491(d)(8), by inserting ‘‘, in10 cluding those related to financial literacy activities,’’ 

11 after ‘‘resources and services’’. 

12 SEC. 5. EVALUATION. 

13 Not later than 6 years after the date of enactment 

14 of this Act, the Comptroller General of the United States 

15 shall submit to the Committee on Health, Education, 

16 Labor, and Pensions of the Senate, the Committee on 

17 Banking, Housing, and Urban Affairs of the Senate, the 

18 Committee on Education and the Workforce of the House 

19 of Representatives, and the Committee on Financial Serv20 ices of the House of Representatives, an evaluation of the 

21 range and effectiveness of financial and economic edu22 cation and financial aid counseling activities of institutions 

23 of higher education, lenders, servicers, and guaranty agen-
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1 cies as emphasized by the Secretary of Education pursu2 ant to section 123 of the Higher Education Act of 1965.

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