I 
113TH CONGRESS 
1ST SESSION H. R. 3612 
To amend the Truth in Lending Act and the Higher Education Act of 
1965 to require certain creditors to obtain certifications from institutions 
of higher education, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 21, 2013 
Mr. POLIS (for himself, Ms. SCHWARTZ, and Mr. BISHOP of New York) intro-
duced the following bill; which was referred to the Committee on Edu-
cation and the Workforce, and in addition to the Committee on Financial 
Services, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Truth in Lending Act and the Higher Edu-
cation Act of 1965 to require certain creditors to obtain 
certifications from institutions of higher education, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Know Before You Owe 
Private Student Loan Act of 2013’’. 
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SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT. 
(a) IN GENERAL.—Section 128(e) of the Truth in 
Lending Act (15 U.S.C. 1638(e)) is amended— 
(1) by striking paragraph (3) and inserting the 
following: 
‘‘(3) 
INSTITUTIONAL
CERTIFICATION
RE-
QUIRED.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), before a creditor may issue 
any funds with respect to an extension of credit 
described in this subsection, the creditor shall 
obtain from the relevant institution of higher 
education where such loan is to be used for a 
student, such institution’s certification of— 
‘‘(i) the enrollment status of the stu-
dent; 
‘‘(ii) the student’s cost of attendance 
at the institution as determined by the in-
stitution under part F of title IV of the 
Higher Education Act of 1965; and 
‘‘(iii) the difference between— 
‘‘(I) such cost of attendance; and 
‘‘(II) the student’s estimated fi-
nancial assistance, including such as-
sistance received under title IV of the 
Higher Education Act of 1965 and 
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other financial assistance known to 
the institution, as applicable. 
‘‘(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), a creditor may issue funds with 
respect to an extension of credit described in 
this subsection without obtaining from the rel-
evant institution of higher education such insti-
tution’s certification if such institution fails to 
provide within 15 business days of the credi-
tor’s request for such certification— 
‘‘(i) the requested certification; or 
‘‘(ii) notification that the institution 
has received the request for certification 
and will need additional time to comply 
with the certification request. 
‘‘(C) LOANS
DISBURSED
WITHOUT
CER-
TIFICATION.—If a creditor issues funds without 
obtaining a certification, as described in sub-
paragraph (B), such creditor shall report the 
issuance of such funds in a manner determined 
by the Director of the Bureau.’’; 
(2) by redesignating paragraphs (9), (10), and 
(11) as paragraphs (10), (11), and (12), respec-
tively; and 
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(3) by inserting after paragraph (8) the fol-
lowing: 
‘‘(9) PROVISION OF INFORMATION.— 
‘‘(A) PROVISION OF INFORMATION TO STU-
DENTS.— 
‘‘(i) LOAN
STATEMENT.—A creditor 
that issues any funds with respect to an 
extension of credit described in this sub-
section shall send loan statements, where 
such loan is to be used for a student, to 
borrowers of such funds not less than once 
every 3 months during the time that such 
student is enrolled at an institution of 
higher education. 
‘‘(ii) CONTENTS
OF
LOAN
STATE-
MENT.—Each 
statement 
described 
in 
clause (i) shall— 
‘‘(I) report the borrower’s total 
remaining debt to the creditor, includ-
ing accrued but unpaid interest and 
capitalized interest; 
‘‘(II) report any debt increases 
since the last statement; and 
‘‘(III) list the current interest 
rate for each loan. 
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‘‘(B) NOTIFICATION OF LOANS DISBURSED 
WITHOUT
CERTIFICATION.—On or before the 
date a creditor issues any funds with respect to 
an extension of credit described in this sub-
section, the creditor shall notify the relevant in-
stitution of higher education, in writing, of the 
amount of the extension of credit and the stu-
dent on whose behalf credit is extended. The 
form of such written notification shall be sub-
ject to the regulations of the Bureau. 
‘‘(C) ANNUAL
REPORT.—A creditor that 
issues funds with respect to an extension of 
credit described in this subsection shall prepare 
and submit an annual report to the Bureau 
containing the required information about pri-
vate student loans to be determined by the Bu-
reau, in consultation with the Secretary of Edu-
cation.’’. 
(b) DEFINITION OF PRIVATE EDUCATION LOAN.— 
Section 140(a)(7)(A) of the Truth in Lending Act (15 
U.S.C. 1650(a)(7)(A)) is amended— 
(1) by redesignating clause (ii) as clause (iii); 
(2) in clause (i), by striking ‘‘and’’ after the 
semicolon; and 
(3) by adding after clause (i) the following: 
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‘‘(ii) is not made, insured, or guaran-
teed under title VII or title VIII of the 
Public Health Service Act (42 U.S.C. 292 
et seq. and 296 et seq.); and’’. 
(c) REGULATIONS.—Not later than 365 days after 
the date of enactment of this Act, the Bureau of Consumer 
Financial Protection shall issue regulations in final form 
to implement paragraphs (3) and (9) of section 128(e) of 
the Truth in Lending Act (15 U.S.C. 1638(e)), as amend-
ed by subsection (a). Such regulations shall become effec-
tive not later than 6 months after their date of issuance. 
SEC. 3. AMENDMENT TO THE HIGHER EDUCATION ACT OF 
1965. 
(a) AMENDMENT TO THE HIGHER EDUCATION ACT 
OF 1965.—Section 487(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1094(a)) is amended by striking para-
graph (28) and inserting the following: 
‘‘(28)(A) The institution shall— 
‘‘(i) upon the request of a private edu-
cational lender, acting in connection with 
an application initiated by a borrower for 
a private education loan in accordance with 
section 128(e)(3) of the Truth in Lending 
Act, provide certification to such private 
educational lender— 
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‘‘(I) that the student who initi-
ated the application for the private 
education loan, or on whose behalf the 
application was initiated, is enrolled 
or is scheduled to enroll at the institu-
tion; 
‘‘(II) of such student’s cost of at-
tendance at the institution as deter-
mined under part F of this title; and 
‘‘(III) 
of 
the 
difference 
be-
tween— 
‘‘(aa) the cost of attendance 
at the institution; and 
‘‘(bb) the student’s esti-
mated financial assistance re-
ceived under this title and other 
assistance known to the institu-
tion, as applicable; and 
‘‘(ii) provide the certification de-
scribed in clause (i), or notify the creditor 
that the institution has received the re-
quest for certification and will need addi-
tional time to comply with the certification 
request— 
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‘‘(I) within 15 business days of 
receipt of such certification request; 
and 
‘‘(II) only after the institution 
has completed the activities described 
in subparagraph (B). 
‘‘(B) The institution shall, upon receipt of 
a certification request described in subpara-
graph (A)(i), and prior to providing such cer-
tification— 
‘‘(i) determine whether the student 
who initiated the application for the pri-
vate education loan, or on whose behalf the 
application was initiated, has applied for 
and exhausted the Federal financial assist-
ance available to such student under this 
title and inform the student accordingly; 
and 
‘‘(ii) provide the borrower whose loan 
application has prompted the certification 
request by a private education lender, as 
described in subparagraph (A)(i), with the 
following information and disclosures: 
‘‘(I) The availability of, and the 
borrower’s potential eligibility for, 
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Federal financial assistance under this 
title, including disclosing the terms, 
conditions, interest rates, and repay-
ment options and programs of Federal 
student loans. 
‘‘(II) The borrower’s ability to 
select a private educational lender of 
the borrower’s choice. 
‘‘(III) The impact of a proposed 
private education loan on the bor-
rower’s potential eligibility for other 
financial assistance, including Federal 
financial assistance under this title. 
‘‘(IV) The borrower’s right to ac-
cept or reject a private education loan 
within the 30-day period following a 
private educational lender’s approval 
of a borrower’s application and about 
a borrower’s 3-day right to cancel pe-
riod. 
‘‘(C) For purposes of this paragraph, the 
terms ‘private educational lender’ and ‘private 
education loan’ have the meanings given such 
terms in section 140 of the Truth in Lending 
Act (15 U.S.C. 1650).’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the effective date of the 
regulations described in section 2(c). 
SEC. 4. REPORT. 
Not later than 24 months after the issuance of regu-
lations under section 2(c), the Director of the Bureau of 
Consumer Financial Protection and the Secretary of Edu-
cation shall jointly submit to Congress a report on the 
compliance of institutions of higher education and private 
educational lenders with section 128(e)(3) of the Truth 
in Lending Act (15 U.S.C. 1638(e)), as amended by sec-
tion 2, and section 487(a)(28) of the Higher Education 
Act of 1965 (20 U.S.C. 1094(a)), as amended by section 
3. Such report shall include information about the degree 
to which specific institutions utilize certifications in effec-
tively encouraging the exhaustion of Federal student loan 
eligibility and lowering student private education loan 
debt. 
Æ 
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