SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Loan Sun-
shine Act’’. 
SEC. 2. INSTITUTION AND LENDER REPORTING AND DIS-
CLOSURE REQUIREMENTS. 
Title I of the Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.) is amended by adding at the end 
the following: 
‘‘PART E—LENDER AND INSTITUTION REQUIRE-
MENTS RELATING TO EDUCATIONAL LOANS 
‘‘SEC. 151. DEFINITIONS. 
‘‘In this part: 
‘‘(1) COVERED INSTITUTION.—The term ‘cov-
ered institution’—
‘‘(A) means any educational institution 
that offers a postsecondary educational degree, 
certificate, or program of study (including any 
institution of higher education, as such term is 
defined in section 102) and receives any Fed-
eral funding or assistance; and 
‘‘(B) includes an agent of the educational 
institution (including an alumni association, 
booster club, or other organization directly or 
indirectly associated with such institution) or 
employee of such institution.
‘‘(2) EDUCATIONAL
LOAN.—The term ‘edu-
cational loan’ (except when used as part of the term 
‘private educational loan’) means—
‘‘(A) any loan made, insured, or guaran-
teed under title IV; or 
‘‘(B) a private educational loan (as defined 
in paragraph (6)). 
‘‘(3) PREFERRED
LENDER
ARRANGEMENT.—
The term ‘preferred lender arrangement’ means an 
arrangement or agreement between a lender and a 
covered institution—
‘‘(A) under which arrangement or agree-
ment a lender provides or otherwise issues edu-
cational loans to the students attending the cov-
ered institution or the parents of such students; 
and 
‘‘(B) which arrangement or agreement re-
lates to the covered institution recommending, 
promoting, endorsing, or using the educational 
loan product of the lender. 
‘‘(4) LENDER.—
‘‘(A) IN GENERAL.—The term ‘lender’—
‘‘(i) means a creditor, except that 
such term shall not include an issuer of
credit secured by a dwelling or under an 
open end credit plan; and 
‘‘(ii) includes an agent of a lender. 
‘‘(B) INCORPORATION
OF
TILA
DEFINI-
TIONS.—The terms ‘creditor’, ‘dwelling’ and 
‘open end credit plan’ have the meanings given 
such terms in section 103 of the Truth in 
Lending Act (15 U.S.C. 1602). 
‘‘(5) OFFICER.—The term ‘officer’ includes a 
director or trustee of an institution. 
‘‘(6) PRIVATE EDUCATIONAL LOAN.—The term 
‘private educational loan’ means a private loan pro-
vided by a lender that—
‘‘(A) is not made, insured, or guaranteed 
under title IV; and 
‘‘(B) is issued by a lender expressly for 
postsecondary educational expenses to a stu-
dent, or the parent of the student, regardless of 
whether the loan involves enrollment certifi-
cation by the educational institution that the 
student attends. 
‘‘(7) 
POSTSECONDARY
EDUCATIONAL
EX-
PENSES.—The term ‘postsecondary educational ex-
penses’ means any of the expenses that are included
as part of a student’s cost of attendance, as defined 
under section 472. 
‘‘SEC. 152. REQUIREMENTS FOR LENDERS AND INSTITU-
TIONS PARTICIPATING IN PREFERRED LEND-
ER ARRANGEMENTS. 
‘‘(a) CERTIFICATION BY LENDERS.—In addition to 
any other disclosure required under Federal law, each 
lender that participates in one or more preferred lender 
arrangements shall annually certify to the Secretary that 
all of the preferred lender arrangements in which it par-
ticipates is in compliance with the requirements of this 
Act. Such compliance of such preferred lender arrange-
ment shall be reported on and attested to annually by the 
auditor of such lender in the audit conducted pursuant 
to section 428(b)(1)(U)(iii). 
‘‘(b) PROVISION OF LOAN INFORMATION.—A lender 
may not provide a private educational loan to a student 
attending a covered institution with which the lender has 
a preferred lender arrangement, or the parent of such stu-
dent, until the covered institution has informed the stu-
dent or parent of their remaining options for borrowing 
under title IV, including information on any terms and 
conditions of available loans under such title that are more 
favorable to the borrower. 
‘‘(c) USE OF INSTITUTION NAME.—
‘‘(1) IN GENERAL.—A covered institution that 
has entered into a preferred lender arrangement 
with a lender regarding private educational loans 
shall not allow the lender to use the name, emblem, 
mascot, or logo of the institution, or other words, 
pictures, or symbols readily identified with the insti-
tution, in the marketing of private educational loans 
to the students attending the institution in any way 
that implies that the institution endorses the private 
educational loans offered by the lender. 
‘‘(2) APPLICABILITY.—Paragraph (1) shall 
apply to any preferred lender arrangement, or exten-
sion of such arrangement, entered into or renewed 
after the date of enactment of the Student Loan 
Sunshine Act. 
‘‘SEC. 153. INTEREST RATE REPORT FOR INSTITUTIONS 
AND 
LENDERS 
PARTICIPATING 
IN 
PRE-
FERRED LENDER ARRANGEMENTS. 
‘‘(a) DUTIES OF THE SECRETARY.—
‘‘(1) REPORT AND MODEL FORMAT.—Not later 
than 180 days after the date of enactment of the 
Student Loan Sunshine Act, the Secretary shall—
‘‘(A) prepare a report on the adequacy of 
the information provided to students and the 
parents of such students about educational
loans, after consulting with students, represent-
atives of covered institutions (including finan-
cial aid administrators, registrars, and business 
officers), lenders, loan servicers, and guaranty 
agencies; 
‘‘(B) develop and prescribe by regulation a 
model disclosure form to be used by lenders and 
covered institutions in carrying out subsections 
(b) and (c) that—
‘‘(i) will be easy for students and par-
ents to read and understand; 
‘‘(ii) will be easily usable by lenders, 
institutions, guaranty agencies, and loan 
servicers; 
‘‘(iii) will provide students and par-
ents with the relevant information about 
the terms and conditions for both Federal 
and private educational loans; 
‘‘(iv) is based on the report’s findings 
and developed in consultation with—
‘‘(I) students; 
‘‘(II) representatives from insti-
tutions of higher education, including 
financial 
aid 
administrators, 
reg-
istrars, business officers, and student 
affairs officials; 
‘‘(III) lenders; 
‘‘(IV) loan servicers; 
‘‘(V) guaranty agencies; and 
‘‘(VI) with respect to the require-
ments of clause (vi) concerning pri-
vate educational loans, the Board of 
Governors of the Federal Reserve Sys-
tem; 
‘‘(v) provides information on the ap-
plicable interest rates and other terms and 
conditions of the educational loans pro-
vided by a lender to students attending the 
institution, or the parents of such stu-
dents, disaggregated by each type of edu-
cational loans provided to such students or 
parents by the lender, including—
‘‘(I) the interest rate of the loan; 
‘‘(II) any fees associated with the 
loan; 
‘‘(III) the repayment terms avail-
able on the loan; 
‘‘(IV) 
the 
opportunity 
for 
deferment or forbearance in repay-
ment of the loan, including whether 
the loan payments can be deferred if 
the student is in school; 
‘‘(V) any additional terms and 
conditions applied to the loan, includ-
ing any benefits that are contingent 
on the repayment behavior of the bor-
rower; 
‘‘(VI) the annual percentage rate 
for such loans, computed determined 
in the manner required under section 
107 of the Truth in Lending Act (15 
U.S.C. 1606) on the basis of the ac-
tual net disbursed amount of the loan; 
‘‘(VII) the average amount bor-
rowed from the lender by students en-
rolled in the institution who obtain 
loans of such type from the lender for 
the preceding academic year; 
‘‘(VIII) the average interest rate 
on such loans provided to such stu-
dents for the preceding academic year; 
‘‘(IX) contact information for the 
lender; and
‘‘(X) any philanthropic contribu-
tions made by the lender to the cov-
ered institution; and 
‘‘(vi) provides, in addition, with re-
spect to private educational loans, the fol-
lowing information with respect to loans 
made by each lender recommended by the 
covered institution: 
‘‘(I) the method of determining 
the interest rate of the loan; 
‘‘(II) whether, and under what 
conditions, early repayment may be 
available without penalty; 
‘‘(III) late payment penalties; 
and 
‘‘(IV) such other information as 
the Secretary may require; and 
‘‘(C)(i) submit the report and model disclo-
sure form to the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate and 
the Committee on Education and Labor of the 
House of Representatives; and 
‘‘(ii) make the report and model disclosure 
form available to covered institutions, lenders, 
and the public.
‘‘(2) MODEL FORM UPDATE.—Not later than 1 
year after the submission of the report and model 
disclosure form described in paragraph (1)(B), the 
Secretary shall—
‘‘(A) assess the adequacy of the model dis-
closure form; 
‘‘(B) after consulting with students, rep-
resentatives of covered institutions (including fi-
nancial aid administrators, registrars, and busi-
ness officers), lenders, loan servicers, and guar-
anty agencies—
‘‘(i) prepare a list of any improve-
ments to the model disclosure form that 
have been identified as beneficial to bor-
rowers; and 
‘‘(ii) update the model disclosure form 
after taking such improvements into con-
sideration; and 
‘‘(C)(i) submit the list of improvements 
and updated model disclosure form to the Com-
mittee on Health, Education, Labor, and Pen-
sions of the Senate and the Committee on Edu-
cation and Labor of the House of Representa-
tives; and
‘‘(ii) make updated model disclosure form 
available to covered institutions, lenders, and 
the public. 
‘‘(3) USE OF FORM.—The Secretary shall take 
such steps as necessary to make the model disclo-
sure form, and any updated model disclosure form, 
available to covered institutions and to encourage—
‘‘(A) lenders subject to subsection (b) to 
use the model disclosure form or updated model 
disclosure form (if available) in providing the 
information required under subsection (b); and 
‘‘(B) covered institutions to use such for-
mat in preparing the information reported 
under subsection (c). 
‘‘(4) PROCEDURES.—Sections 482(c) and 492 
of this Act shall not apply to the model disclosure 
form in the regulations prescribed under paragraph 
(1)(B), but shall apply to the updating of such form 
under paragraph (2). 
‘‘(b) LENDER DUTIES.—Each lender that has a pre-
ferred lender arrangement with a covered institution shall 
annually, by a date determined by the Secretary, provide 
to the covered institution and to the Secretary the infor-
mation included on the model disclosure form or an up-
dated model disclosure form (if available) for each type
of educational loan provided by the lender to students at-
tending the covered institution, or the parents of such stu-
dents, for the preceding academic year. 
‘‘(c) COVERED INSTITUTION REPORTS.—Each cov-
ered institution shall—
‘‘(1) prepare and submit to the Secretary an 
annual report, by a date determined by the Sec-
retary, that includes, for each lender that has a pre-
ferred lender arrangement with the covered institu-
tion and that has submitted to the institution the in-
formation required under subsection (b)—
‘‘(A) the information included on the 
model disclosure form or updated model disclo-
sure form (if available) for each type of edu-
cational loan provided by the lender to students 
attending the covered institution, or the parents 
of such students; and 
‘‘(B) a detailed explanation of why the cov-
ered institution believes the terms and condi-
tions of each type of educational loan provided 
pursuant to the agreement are beneficial for 
students attending the covered institution, or 
the parents of such students; and 
‘‘(2) ensure that the report required under 
paragraph (1) is made available to the public and
provided to students attending or planning to attend 
the covered institution, and the parents of such stu-
dents, in time for the student or parent to take such 
information into account before applying for or se-
lecting an educational loan. 
‘‘(d) DISCLOSURES BY COVERED INSTITUTIONS.—A 
covered institution shall disclose, on its website and in the 
informational materials described in subsection (e)—
‘‘(1) a statement that—
‘‘(A) indicates that students are not lim-
ited to or required to use the lenders the insti-
tutions recommends; and 
‘‘(B) the institution is required to process 
the documents required to obtain a loan from 
any eligible lender the student selects; 
‘‘(2) at a minimum, all of the information pro-
vided by the model disclosure form prescribed under 
subsection (a)(1)(B) with respect to any lender rec-
ommended by the institution for Federal student 
loans and, as applicable, private educational loans; 
‘‘(3) the maximum amount of Federal grant 
and loan aid available to students in an easy-to-un-
derstand format; and 
‘‘(4) the institution’s cost of attendance (as de-
termined under section 472).
‘‘(e) INFORMATIONAL MATERIALS.—The informa-
tional materials described in this subsection are any publi-
cations, mailings, or electronic messages or media distrib-
uted to prospective or current students and parents of stu-
dents that describe, discuss, or relate to the financial aid 
opportunities available to students at an institution of 
higher education. 
‘‘SEC. 154. PRIVATE EDUCATIONAL LOAN DISCLOSURE RE-
QUIREMENTS FOR COVERED INSTITUTIONS. 
‘‘A covered institution that provides information to 
any student, or the parent of such student, regarding a 
private educational loan from a lender shall, prior to or 
concurrent with such information—
‘‘(1) inform the student or parent of—
‘‘(A) the student or parent’s eligibility for 
assistance and loans under title IV; and 
‘‘(B) the terms and conditions of such pri-
vate educational loan that are less favorable 
than the terms and conditions of educational 
loans for which the student or parent is eligible, 
including interest rates, repayment options, and 
loan forgiveness; and 
‘‘(2) ensure that information regarding such 
private educational loan is presented in such a man-
ner as to be distinct from information regarding
loans that are made, insured, or guaranteed under 
title IV. 
‘‘SEC. 155. INTEGRITY PROVISIONS. 
‘‘(a) INSTITUTION CODE OF CONDUCT REQUIRED.—
‘‘(1) CODE OF CONDUCT.—Each institution of 
higher education that participates in the Federal 
student loan programs under title IV or has stu-
dents that obtain private educational loans shall—
‘‘(A) develop a code of conduct in accord-
ance with paragraph (2) with which its officers, 
employees, and agents shall comply with respect 
to educational loans; 
‘‘(B) publish the code of conduct promi-
nently on its website; and 
‘‘(C) administer and enforce such code in 
accordance with the requirements of this sub-
section. 
‘‘(2) CONTENTS OF CODE.—The code required 
by this section shall—
‘‘(A) prohibit a conflict of interest or the 
appearance of a conflict of interest with the re-
sponsibilities of such officer, employee, or agent 
with respect to student loans or other financial 
aid; and
‘‘(B) at a minimum, include provisions in 
compliance with the provisions of the following 
subsections of this section. 
‘‘(3) TRAINING AND COMPLIANCE.—An institu-
tion of higher education shall administer and enforce 
a code of conduct required by this section by, at a 
minimum, requiring all of its officers, employees, 
and agents with responsibilities with respect to stu-
dent loans or other financial aid to obtain training 
annually in compliance with the code. 
‘‘(b) GIFT BAN.—
‘‘(1) PROHIBITION.—A lender, guarantor, or 
servicer of educational loans shall not offer any gift 
to an officer, employee, or agent of a covered institu-
tion. 
‘‘(2) INSPECTOR GENERAL REPORT.—The In-
spector General of the Department of Education 
shall investigate any reported violation of this sub-
section and shall annually submit a report to the 
Committee on Health, Education, Labor, and Pen-
sions of the Senate and the Committee on Education 
and Labor of the House of Representatives identi-
fying all reported violations of the gift ban under 
paragraph (1), including the lenders involved in each 
such violation, for the preceding year.
‘‘(iii) Favorable terms, conditions, and 
borrower benefits on an educational loan 
provided to a student employed by the cov-
ered institution if such terms, conditions, 
or benefits are comparable to those pro-
vided to all students of the institution. 
‘‘(iv) Exit counseling services provided 
to borrowers to meet a covered institution’s 
responsibilities for exit counseling as re-
quired by section 485(b) provided that—
‘‘(I) a covered institution’s staff 
are in control of the counseling 
(whether in person or via electronic 
capabilities); and 
‘‘(II) such counseling does not 
promote the products or services of 
any lender. 
‘‘(C) RULE FOR GIFTS TO FAMILY MEM-
BERS.—For purposes of this section, a gift to 
a family member of an officer, employee, or 
agent of a covered institution, or a gift to any 
other individual based on that individual’s rela-
tionship with the officer, employee, or agent, 
shall be considered a gift to the officer, em-
ployee, or agent if—
‘‘(i) the gift is given with the knowl-
edge and acquiescence of the officer, em-
ployee, or agent; and 
‘‘(ii) the officer, employee, or agent 
has reason to believe the gift was given be-
cause of the official position of the officer, 
employee, or agent. 
‘‘(c) FEES FROM LENDERS FOR SERVICE PROHIB-
ITED.—An officer, employee, or agent who is employed in 
the financial aid office of the institution, or who otherwise 
has responsibilities with respect to educational loans or 
other financial aid, shall not accept from any lender or 
affiliate of any lender (as the term affiliate is defined in 
section 487(a)) any fee, payment, or other financial ben-
efit (including the opportunity to purchase stock) as com-
pensation for consulting services, serving on an advisory 
council, or otherwise advising such lender or affiliate. 
‘‘(d) BAN
ON
EDUCATIONAL
LOAN
ARRANGE-
MENTS.—
‘‘(1) PROHIBITION.—An institution of higher 
education shall not enter into any educational loan 
arrangement with any lender. 
‘‘(2) DEFINITION.—For purposes of this sub-
section, an educational loan arrangement is an ar-
rangement between an institution of higher edu-
cation (or an agent of the institution) and a lender 
under which—
‘‘(A) a lender provides or issues edu-
cational loans to students attending the institu-
tion or to parents of such students; 
‘‘(B) the institution recommends the lender 
or the loan products of the lender; and 
‘‘(C) the lender pays a fee or provides 
other material benefits, including profit or rev-
enue sharing, to the institution or officers, em-
ployees, or agents of the institution. 
‘‘(e) BAN ON STAFFING ASSISTANCE.—
‘‘(1) PROHIBITION.—An institution of higher 
education shall not request or accept from any lend-
er any assistance with call center staffing or finan-
cial aid office staffing. 
‘‘(2) CERTAIN ASSISTANCE PERMITTED.—Noth-
ing in paragraph (1) shall be construed to prohibit 
an institution from requesting or accepting assist-
ance from a lender related to—
‘‘(A) professional development training for 
financial aid administrators; or 
‘‘(B) providing educational counseling ma-
terials, financial literacy materials, or debt 
management materials to borrowers, provided
that such materials disclose to borrowers the 
identification of any lender that assisted in pre-
paring or providing such materials. 
‘‘(f) BAN ON OPPORTUNITY POOLS.—An institution 
of higher education shall not request, accept, or consider 
from any lender any offer of funds to be used for private 
educational loans to students in exchange for the covered 
institution providing concessions or promises to the lender, 
and a lender shall not make any such offer. 
‘‘(g) BAN ON PARTICIPATION ON ADVISORY COUN-
CILS.—An officer, employee, or agent who is employed in 
the financial aid office of a covered institution, or who oth-
erwise has responsibilities with respect to educational 
loans or other financial aid, shall not serve on or otherwise 
participate with advisory councils of lenders or affiliates 
of lenders. Nothing in this subsection shall prohibit lend-
ers from seeking advice from covered institutions or 
groups of covered institutions (including through tele-
phonic or electronic means, or a meeting) in order to im-
prove products and services for borrowers, provided there 
are no gifts or compensation (including for transportation, 
lodging, or related expenses) provided by lenders in con-
nection with seeking this advice from such institutions.
‘‘SEC. 156. COMPLIANCE AND ENFORCEMENT. 
‘‘(a) CONDITION OF ANY FEDERAL ASSISTANCE.—
Notwithstanding any other provision of law, a covered in-
stitution or lender shall comply with this part as a condi-
tion of receiving Federal funds or assistance provided after 
the date of enactment of the Student Loan Sunshine Act. 
‘‘(b) PENALTIES.—Notwithstanding any other provi-
sion of law, if the Secretary determines, after providing 
notice and an opportunity for a hearing for a covered insti-
tution or lender, that the covered institution or lender has 
violated subsection (a)—
‘‘(1) in the case of a covered institution, or a 
lender that does not participate in a loan program 
under title IV, the Secretary may impose a civil pen-
alty in an amount of not more than $25,000; and 
‘‘(2) in the case of a lender that does partici-
pate in a program under title IV, the Secretary may 
limit, terminate, or suspend the lender’s participa-
tion in such program. 
‘‘(c) CONSIDERATIONS.—In taking any action against 
a covered institution or lender under subsection (b), the 
Secretary shall take into consideration the nature and se-
verity of the violation of subsection (a).’’.
SEC. 3. PROGRAM PARTICIPATION AGREEMENTS. 
Section 487(a) of the Higher Education Act of 1965 
(20 U.S.C. 1094(a)) is amended by adding at the end the 
following: 
‘‘(24)(A) In the case of an institution (including 
an officer (including a director or trustee), employee, 
or agent of an institution) that maintains a pre-
ferred lender list, in print or any other medium, 
through which the institution recommends 1 or more 
specific lenders for educational loans (as such term 
is defined in section 151 of this Act, but excluding 
loans under part D of this title) to the students at-
tending the institution (or the parents of such stu-
dents), the institution will—
‘‘(i) clearly and fully disclose on the pre-
ferred lender list—
‘‘(I) why the institution has included 
each lender as a preferred lender, espe-
cially with respect to terms and conditions 
favorable to the borrower; and 
‘‘(II) that the students attending the 
institution (or the parents of such stu-
dents) do not have to borrow from a lender 
on the preferred lender list;
‘‘(ii) ensure, through the use of the list 
provided by the Secretary under subparagraph 
(C), that—
‘‘(I) there are not less than 3 lenders 
named on the each preferred lending list 
offered by the institution that are not af-
filiates of each other; and 
‘‘(II) the preferred lender list—
‘‘(aa) specifically indicates, for 
each lender on the list, whether the 
lender is or is not an affiliate of each 
other lender on the list; and 
‘‘(bb) if the lender is an affiliate 
of another lender on the list, describes 
the specifics of such affiliation; 
‘‘(iii) establish and prominently disclose a 
process to ensure that lenders are placed upon 
the preferred lender list on the basis of the ben-
efits provided to borrowers, including—
‘‘(I) highly competitive interest rates, 
terms, or conditions for loans made under 
part B; 
‘‘(II) high-quality servicing for such 
loans; or
‘‘(III) additional benefits beyond the 
standard terms and conditions for such 
loans; 
‘‘(iv) exercise a duty of care and a duty of 
loyalty to compile the preferred lender list with-
out prejudice and for the sole benefit of the stu-
dent; 
‘‘(v) not deny or otherwise impede the bor-
rower’s choice of a lender or cause unnecessary 
delays in loan certification under this title for 
those borrowers who choose a lender than has 
not been recommended or suggested by the in-
stitution. 
‘‘(B) For the purposes of subparagraph 
(A)(ii)—
‘‘(i) the term ‘affiliate’ means a person 
that controls, is controlled by, or is under com-
mon control with another person; and 
‘‘(ii) a person controls, is controlled by, or 
is under common control with another person 
if—
‘‘(I) the person directly or indirectly, 
or acting through 1 or more others, owns, 
controls, or has the power to vote 5 per-
110TH CONGRESS 
1ST SESSION 
H. R. 890
AN ACT 
To establish requirements for lenders and institu-
tions of higher education in order to protect stu-
dents and other borrowers receiving educational 
loans.