IB 
Union Calendar No. 397 
113TH CONGRESS 
2D SESSION 
H. R. 4984 
[Report No. 113–531] 
To amend the loan counseling requirements under the Higher Education 
Act of 1965, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 26, 2014 
Mr. GUTHRIE (for himself, Mr. HUDSON, and Mr. KLINE) introduced the fol-
lowing bill; which was referred to the Committee on Education and the 
Workforce 
JULY 17, 2014 
Additional sponsors: Mr. KELLY of Pennsylvania, Mr. ROE of Tennessee, Mrs. 
BROOKS of Indiana, Mr. THOMPSON of Pennsylvania, Mr. ROKITA, Mr. 
HECK of Nevada, Mr. BUCSHON, Mr. MESSER, Mrs. CAPITO, Mr. 
ROTHFUS, Ms. BONAMICI, Mr. ROYCE, Mr. SABLAN, Mr. KING of New 
York, and Mr. GEORGE MILLER of California 
JULY 17, 2014 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on June 26, 2014] 
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A BILL 
To amend the loan counseling requirements under the Higher 
Education Act of 1965, and for other purposes. 
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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 ‘‘Empowering Students 
Through Enhanced Financial Counseling Act’’. 
SEC. 2. ANNUAL COUNSELING. 
Section 485(l) of the Higher Education Act of 1965 
(20 U.S.C. 1092(l)) is amended to read as follows: 
‘‘(l) ANNUAL FINANCIAL AID COUNSELING.— 
‘‘(1) ANNUAL DISCLOSURE REQUIRED.— 
‘‘(A) IN GENERAL.—Each eligible institu-
tion shall ensure that each individual who re-
ceives a Federal Pell Grant or a loan made 
under part D (other than a Federal Direct Con-
solidation Loan) receives comprehensive informa-
tion on the terms and conditions of such Federal 
Pell Grant or loan and the responsibilities the 
individual has with respect to such Federal Pell 
Grant or loan. Such information shall be pro-
vided, for each award year for which the indi-
vidual receives such Federal Pell Grant or loan, 
in a simple and understandable manner— 
‘‘(i) during a counseling session con-
ducted in person; 
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‘‘(ii) online, with the borrower ac-
knowledging receipt of the information; or 
‘‘(iii) through the use of the online 
counseling tool described in subsection 
(n)(1)(B). 
‘‘(B) USE OF INTERACTIVE PROGRAMS.—In 
the case of institutions not using the online 
counseling tool described in subsection (n)(1)(B), 
the Secretary shall require such institutions to 
carry out the requirements of subparagraph (A) 
through the use of interactive programs, during 
an annual counseling session that is in-person or 
online, that test the individual’s understanding 
of the terms and conditions of the Federal Pell 
Grant or loan awarded to the student, using 
simple and understandable language and clear 
formatting. 
‘‘(2) ALL INDIVIDUALS.—The information to be 
provided under paragraph (1)(A) to each individual 
receiving counseling under this subsection shall in-
clude the following: 
‘‘(A) An explanation of how the student 
may budget for typical educational expenses and 
a sample budget based on the cost of attendance 
for the institution. 
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‘‘(B) An explanation that an individual has 
a right to annually request a disclosure of infor-
mation collected by a consumer reporting agency 
pursuant to section 612(a) of the Fair Credit Re-
porting Act (15 U.S.C. 1681j(a)). 
‘‘(3) STUDENTS
RECEIVING
FEDERAL
PELL 
GRANTS.—The information to be provided under 
paragraph (1)(A) to each student receiving a Federal 
Pell Grant shall include the following: 
‘‘(A) An explanation of the terms and con-
ditions of the Federal Pell Grant. 
‘‘(B) An explanation of approved edu-
cational expenses for which the student may use 
the Federal Pell Grant. 
‘‘(C) An explanation of why the student 
may have to repay the Federal Pell Grant. 
‘‘(D) An explanation of the maximum num-
ber of semesters or equivalent for which the stu-
dent may be eligible to receive a Federal Pell 
Grant, and a statement of the amount of time re-
maining for which the student may be eligible to 
receive a Federal Pell Grant. 
‘‘(E) An explanation of how the student 
may seek additional financial assistance from 
the institution’s financial aid office due to a 
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change in the student’s financial circumstances, 
and the contact information for such office. 
‘‘(4) 
BORROWERS
RECEIVING
LOANS
MADE 
UNDER
PART
D
(OTHER
THAN
PARENT
PLUS 
LOANS).—The information to be provided under para-
graph (1)(A) to a borrower of a loan made under part 
D (other than a Federal Direct PLUS Loan made on 
behalf of a dependent student) shall include the fol-
lowing: 
‘‘(A) To the extent practicable, the effect of 
accepting the loan to be disbursed on the eligi-
bility of the borrower for other forms of student 
financial assistance. 
‘‘(B) An explanation of the use of the mas-
ter promissory note. 
‘‘(C) An explanation that the borrower is 
not required to accept the full amount of the loan 
offered to the borrower. 
‘‘(D) An explanation that the borrower 
should consider accepting any grant, scholarship, 
or State or Federal work-study jobs for which the 
borrower is eligible prior to accepting Federal 
student loans. 
‘‘(E) A recommendation to the borrower to 
exhaust the borrower’s Federal student loan op-
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tions prior to taking out private loans, an expla-
nation that Federal student loans typically offer 
better terms and conditions than private loans, 
and an explanation that if a borrower decides to 
take out a private education loan— 
‘‘(i) the borrower has the ability to se-
lect a private educational lender of the bor-
rower’s choice; 
‘‘(ii) the proposed private education 
loan may impact the borrower’s potential 
eligibility for other financial assistance, in-
cluding Federal financial assistance under 
this title; and 
‘‘(iii) the borrower has a right— 
‘‘(I) to accept the terms of the pri-
vate education loan within 30 calendar 
days following the date on which the 
application for such loan is approved 
and the borrower receives the required 
disclosure documents, pursuant to sec-
tion 128(e)(6) of the Truth in Lending 
Act; and 
‘‘(II) to cancel such loan within 3 
business days of the date on which the 
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loan is consummated, pursuant to sec-
tion 128(e)(7) of such Act. 
‘‘(F) An explanation of the approved edu-
cational expenses for which the borrower may use 
a loan made under part D. 
‘‘(G) Information on the annual and aggre-
gate loan limits for Federal Direct Stafford 
Loans and Federal Direct Unsubsidized Stafford 
Loans. 
‘‘(H) Information on how interest accrues 
and is capitalized during periods when the inter-
est is not paid by either the borrower or the Sec-
retary. 
‘‘(I) In the case of a Federal Direct PLUS 
Loan or a Federal Direct Unsubsidized Stafford 
Loan, the option of the borrower to pay the in-
terest while the borrower is in school. 
‘‘(J) The definition of half-time enrollment 
at the institution, during regular terms and 
summer school, if applicable, and the con-
sequences of not maintaining at least half-time 
enrollment. 
‘‘(K) An explanation of the importance of 
contacting the appropriate offices at the institu-
tion of higher education if the borrower with-
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draws prior to completing the borrower’s pro-
gram of study so that the institution can provide 
exit counseling, including information regarding 
the borrower’s repayment options and loan con-
solidation. 
‘‘(L) For a first-time borrower, the antici-
pated monthly payment amount under, at min-
imum, a standard repayment plan and, using 
the regionally available data from the Bureau of 
Labor Statistics of the average starting salary 
for the occupation the borrower intends to be em-
ployed, an income-based repayment plan under 
section 493C, and based on— 
‘‘(i) a range of levels of indebtedness 
of— 
‘‘(I) borrowers of Federal Direct 
Stafford Loans or Federal Direct Un-
subsidized Stafford Loans; and 
‘‘(II) as appropriate, graduate 
borrowers of Federal Direct PLUS 
Loans or Federal Direct Unsubsidized 
Stafford Loans; or 
‘‘(ii) the average cumulative indebted-
ness at graduation for students who bor-
rowed loans made under part D and who 
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