IB 
Union Calendar No. 523 
114TH CONGRESS 
2D SESSION 
H. R. 3179 
[Report No. 114–675] 
To amend the loan counseling requirements under the Higher Education 
Act of 1965, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 23, 2015 
Mr. GUTHRIE (for himself, Mr. ALLEN, Ms. BONAMICI, Mr. KLINE, Mr. 
SCOTT of Virginia, Mr. HUNTER, Mr. WALBERG, Mr. HECK of Nevada, 
Mr. MESSER, Mr. CARTER of Georgia, Ms. STEFANIK, Mrs. DAVIS of 
California, Mr. GRIJALVA, Mr. SABLAN, Mr. POCAN, Mr. TAKANO, Ms. 
CLARK of Massachusetts, Mr. DESAULNIER, and Mr. HUDSON) intro-
duced the following bill; which was referred to the Committee on Edu-
cation and the Workforce 
JULY 11, 2016 
Additional sponsors: Mr. ROE of Tennessee, Mr. ROKITA, Mr. POLIS, Mr. 
MACARTHUR, Mr. DOLD, Mr. KEATING, Ms. KUSTER, Mr. BARLETTA, 
Mr. RODNEY DAVIS of Illinois, Mrs. ELLMERS of North Carolina, Mr. 
BLUMENAUER, Mr. COFFMAN, Mr. CURBELO of Florida, Mr. BEYER, Mr. 
THOMPSON of Pennsylvania, Mr. HINOJOSA, Mr. COURTNEY, Ms. FUDGE, 
Ms. ADAMS, and Ms. WILSON of Florida 
JULY 11, 2016 
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 23, 2015] 
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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 individual 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 individual, 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 individual 
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)). 
‘‘(C) Based on the most recent data avail-
able from the American Community Survey 
available from the Department of Commerce, the 
estimated average income and percentage of em-
ployment in the State of domicile of the indi-
vidual for individuals with— 
‘‘(i) a high school diploma or equiva-
lent; 
‘‘(ii) some post-secondary education 
without completion of a degree or certifi-
cate; and 
‘‘(iii) a bachelor’s degree. 
‘‘(D) An introduction to the financial man-
agement resources provided by the Financial Lit-
eracy and Education Commission. 
‘‘(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: 
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‘‘(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 that if the student 
transfers to another institution not all of the stu-
dent’s courses may be acceptable in transfer to-
ward meeting specific degree or program require-
ments at such institution, but the amount of 
time remaining for which a student may be eli-
gible to receive a Federal Pell Grant, as provided 
under subparagraph (D), will not change. 
‘‘(F) 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 education loans, 
an explanation that Federal student loans typi-
cally offer better terms and conditions than pri-
vate education loans, an explanation of treat-
ment of loans made under part D and private 
education loans in bankruptcy, and an expla-
nation 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) of the Truth in Lending 
Act (15 U.S.C. 1638(e)); and 
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‘‘(II) to cancel such loan within 3 
business days of the date on which the 
loan is consummated, pursuant to sec-
tion 128(e)(7) of such Act (15 U.S.C. 
1638(e)(7)). 
‘‘(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. 
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‘‘(K) An explanation of the importance of 
contacting the appropriate offices at the institu-
tion of higher education if the borrower with-
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— 
‘‘(i) a statement of the anticipated bal-
ance on the loan for which the borrower is 
receiving counseling under this subsection; 
‘‘(ii) based on such anticipated bal-
ance, the anticipated monthly payment 
amount under, at minimum— 
‘‘(I) the standard repayment plan; 
and 
‘‘(II) an income-based repayment 
plan under section 493C, as deter-
mined using regionally available data 
from the Bureau of Labor Statistics of 
the average starting salary for the oc-
cupation in which the borrower has an 
interest in or intends to be employed; 
and 
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‘‘(iii) an estimate of the projected 
monthly payment amount under each re-
payment plan described in clause (ii), based 
on the average cumulative indebtedness at 
graduation for borrowers of loans made 
under part D who are in the same program 
of study as the borrower. 
‘‘(M) For a borrower with an outstanding 
balance of principal or interest due on a loan 
made under this title— 
‘‘(i) a current statement of the amount 
of such outstanding balance and interest ac-
crued; 
‘‘(ii) based on such outstanding bal-
ance, the anticipated monthly payment 
amount under, at minimum, the standard 
repayment plan and, using regionally 
available data from the Bureau of Labor 
Statistics of the average starting salary for 
the occupation the borrower intends to be 
employed, an income-based repayment plan 
under section 493C; and 
‘‘(iii) an estimate of the projected 
monthly payment amount under each re-
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payment plan described in clause (ii), based 
on— 
‘‘(I) the outstanding balance de-
scribed in clause (i); 
‘‘(II) the anticipated outstanding 
balance on the loan for which the stu-
dent is receiving counseling under this 
subsection; and 
‘‘(III) a projection for any other 
loans made under part D that the bor-
rower is reasonably expected to accept 
during the borrower’s program of study 
based on at least the expected increase 
in the cost of attendance of such pro-
gram. 
‘‘(N) The obligation of the borrower to 
repay the full amount of the loan, regardless of 
whether the borrower completes or does not com-
plete the program in which the borrower is en-
rolled within the regular time for program com-
pletion. 
‘‘(O) The likely consequences of default on 
the loan, including adverse credit reports, delin-
quent debt collection procedures under Federal 
law, and litigation, and a notice of the institu-
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tion’s most recent cohort default rate (defined in 
section 435(m)), an explanation of the cohort de-
fault rate, the most recent national average co-
hort default rate, and the most recent national 
average cohort default rate for the category of in-
stitution described in section 435(m)(4) to which 
the institution belongs. 
‘‘(P) Information on the National Student 
Loan Data System and how the borrower can 
access the borrower’s records. 
‘‘(Q) The contact information for the insti-
tution’s financial aid office or other appropriate 
office at the institution the borrower may contact 
if the borrower has any questions about the bor-
rower’s rights and responsibilities or the terms 
and conditions of the loan. 
‘‘(5) BORROWERS
RECEIVING
PARENT
PLUS 
LOANS FOR DEPENDENT STUDENTS.—The information 
to be provided under paragraph (1)(A) to a borrower 
of a Federal Direct PLUS Loan made on behalf of a 
dependent student shall include the following: 
‘‘(A) The information described in subpara-
graphs (A) through (C) and (N) through (Q) of 
paragraph (4). 
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‘‘(B) The option of the borrower to pay the 
interest on the loan while the loan is in 
deferment. 
‘‘(C) For a first-time borrower of such 
loan— 
‘‘(i) a statement of the anticipated bal-
ance on the loan for which the borrower is 
receiving counseling under this subsection; 
‘‘(ii) based on such anticipated bal-
ance, the anticipated monthly payment 
amount under the standard repayment 
plan; and 
‘‘(iii) an estimate of the projected 
monthly payment amount under the stand-
ard repayment plan, based on the average 
cumulative indebtedness of other borrowers 
of Federal Direct PLUS Loans made on be-
half of dependent students who are in the 
same program of study as the student on 
whose behalf the borrower borrowed the 
loan. 
‘‘(D) For a borrower with an outstanding 
balance of principal or interest due on such 
loan— 
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‘‘(i) a statement of the amount of such 
outstanding balance; 
‘‘(ii) based on such outstanding bal-
ance, the anticipated monthly payment 
amount under the standard repayment 
plan; and 
‘‘(iii) an estimate of the projected 
monthly payment amount under the stand-
ard repayment plan, based on— 
‘‘(I) the outstanding balance de-
scribed in clause (i); 
‘‘(II) the anticipated outstanding 
balance on the loan for which the bor-
rower is receiving counseling under 
this subsection; and 
‘‘(III) a projection for any other 
Federal Direct PLUS Loan made on 
behalf of the dependent student that the 
borrower is reasonably expected to ac-
cept during the program of study of 
such student based on at least the ex-
pected increase in the cost of attend-
ance of such program. 
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‘‘(E) Debt management strategies that are 
designed to facilitate the repayment of such in-
debtedness. 
‘‘(F) An explanation that the borrower has 
the options to prepay each loan, pay each loan 
on a shorter schedule, and change repayment 
plans. 
‘‘(G) For each Federal Direct PLUS Loan 
made on behalf of a dependent student for which 
the borrower is receiving counseling under this 
subsection, the contact information for the loan 
servicer of the loan and a link to such servicer’s 
Website. 
‘‘(6) ANNUAL LOAN ACCEPTANCE.—Prior to mak-
ing the first disbursement of a loan made under part 
D (other than a Federal Direct Consolidation Loan) 
to a borrower for an award year, an eligible institu-
tion, shall, as part of carrying out the counseling re-
quirements of this subsection for the loan, ensure that 
after receiving the applicable counseling under para-
graphs (2), (4), and (5) for the loan the borrower ac-
cepts the loan for such award year by— 
‘‘(A) signing the master promissory note for 
the loan; 
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‘‘(B) signing and returning to the institu-
tion a separate written statement that affirma-
tively states that the borrower accepts the loan; 
or 
‘‘(C) electronically signing an electronic 
version of the statement described in subpara-
graph (B).’’. 
SEC. 3. EXIT COUNSELING. 
Section 485(b) of the Higher Education Act of 1965 
(20 U.S.C. 1092(b)) is amended— 
(1) in paragraph (1)(A)— 
(A) in the matter preceding clause (i), by 
striking ‘‘through financial aid offices or other-
wise’’ and inserting ‘‘through the use of an inter-
active program, during an exit counseling ses-
sion that is in-person or online, or through the 
use of the online counseling tool described in sub-
section (n)(1)(A)’’; 
(B) by redesignating clauses (i) through (ix) 
as clauses (iv) through (xii), respectively; 
(C) by inserting before clause (iv), as so re-
designated, the following: 
‘‘(i) a summary of the outstanding balance of 
principal and interest due on the loans made to the 
borrower under part B, D, or E; 
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‘‘(ii) an explanation of the grace period pre-
ceding repayment and the expected date that the bor-
rower will enter repayment; 
‘‘(iii) an explanation that the borrower has the 
option to pay any interest that has accrued while the 
borrower was in school or that may accrue during the 
grace period preceding repayment or during an au-
thorized period of deferment or forbearance, prior to 
the capitalization of the interest;’’; 
(D) in clause (iv), as so redesignated— 
(i) by striking ‘‘sample information 
showing the average’’ and inserting ‘‘infor-
mation, based on the borrower’s outstanding 
balance described in clause (i), showing the 
borrower’s’’; and 
(ii) by striking ‘‘of each plan’’ and in-
serting ‘‘of at least the standard repayment 
plan and the income-based repayment plan 
under section 493C’’; 
(E) in clause (ix), as so redesignated— 
(i) by inserting ‘‘decreased credit 
score,’’ after ‘‘credit reports,’’; and 
(ii) by inserting ‘‘reduced ability to 
rent or purchase a home or car, potential 
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