State Loan Access and Student Protection Act

To exempt certain education loans made by States from certain preferred lender requirements under the Higher Education Act of 1965. 1. Short title This Act may be cited as the State Loan Access and Student Protection Act 2. Exception for certain education loans made by States Section 487(h) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(h) (1) in paragraph (1)(B)— (A) in clause (i), by striking and (B) by inserting and (C) by inserting after clause (ii), the following: (iii) in the case of education loans made by a State (and whose terms and conditions are established by the State), which are recommended, promoted, or endorsed by the institution, and that do not meet the requirement of clause (i) with respect to having not less than two lenders of such loans who are not affiliates of each other included on the preferred lender list— (I) the institution’s only actions to recommend, promote, or endorse such loans are— (aa) informing students and the families of such students about such loans; and (bb) providing financial aid packages that include such loans to students who have previously been awarded such loans; (II) the terms and conditions of such loans (including interest rates, fees, available repayment and forgiveness options, and such other information as the Secretary determines necessary) are— (aa) using the form developed by the Secretary under paragraph (3), disclosed to the borrower and compared to the terms and conditions of a loan made under part D; and (bb) at least as favorable to borrowers as the terms and conditions of a loan under made under part D, as determined in accordance with such criteria as may be established by the Secretary; and (III) the institution prominently discloses to borrowers the methods and criteria used by the institution to select such loans for the recommendation, promotion, or endorsement described in clause (I). ; and (2) by adding at the end the following: (3) Comparison form Not later than 6 months after the date of the enactment of the State Loan Access and Student Protection Act, the Secretary shall develop a form for the purposes of the disclosure and comparison required under paragraph (1)(B)(iii)(II)(aa). (4) Rule of construction Nothing in this subsection shall be construed to require an institution to carry out the actions described in items (aa) and (bb) of paragraph (1)(B)(iii)(I). . 3. Inapplicability of title IV negotiated rulemaking requirement and master calendar exception Sections 482(c) and 492 of the Higher Education Act of 1965 ( 20 U.S.C. 1089(c) 4. Effective date The amendments made by section 2(1) shall be effective with respect to academic year 2014–2015 and each succeeding academic year.

Summary: State Loan Access and Student Protection Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to exempt certain state education loans from the requirement that when an institution of higher education (IHE) recommends, promotes, or endorses such loans, there need to be at least two unaffiliated lenders of those loans on the school's preferred lender list. Conditions that exemption on the IHE: only recommending, promoting, or endorsing such loans by providing students and families with information about the loans and providing financial aid packages that include such loans to students who have previously been awarded such loans; using a form, to be developed by the Secretary of Education, to disclose the terms and conditions of such loans to borrowers and compare them to the terms and conditions of Direct loans under part D (William D. Ford Federal Direct Loan Program) of title IV; placing such loans on their preferred list only if the loans' terms and conditions are at least as favorable as the terms and conditions on Direct loans; and prominently disclosing to borrowers the methods and criteria it used in deciding to recommend, promote, or endorse such loans.