I 
112TH CONGRESS 
1ST SESSION H. R. 2535 
To require financial literacy and economic education counseling for student 
borrowers, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 14, 2011 
Ms. JACKSON LEE of Texas (for herself, Mr. YOUNG of Florida, Mr. CON-
YERS, Ms. KAPTUR, Mr. ANDREWS, Mr. HASTINGS of Florida, Ms. 
HANABUSA, Mr. MICHAUD, Mrs. MALONEY, Ms. EDDIE BERNICE JOHN-
SON of Texas, Mr. QUIGLEY, Mr. HIGGINS, Mr. CICILLINE, Mr. KILDEE, 
Mr. GUTIERREZ, Mr. MEEKS, Mr. RANGEL, Mr. HINOJOSA, Ms. BASS of 
California, Mr. SIRES, and Mr. TONKO) introduced the following bill; 
which was referred to the Committee on Education and the Workforce 
A BILL 
To require financial literacy and economic education 
counseling for student borrowers, 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 ‘‘College Literacy in 
Finance and Economics Act of 2011’’ or the ‘‘College 
LIFE Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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(1) Student borrowing is widespread in higher 
education, and more than $100,000,000,000 in Fed-
eral education loans are originated each year. In 
2008, 62 percent of recipients of a baccalaureate de-
gree graduated with student debt. 
(2) Forty-eight percent of students at 4-year 
public institutions of higher education borrow money 
to pay for college, as do 57 percent of students at 
4-year private institutions of higher education, and 
96 percent of students at for-profit institutions of 
higher education. 
(3) In 2008, 92 percent of Black students, 85 
percent of Hispanic students, 85 percent of Amer-
ican Indian/Alaska Native students, 82 percent of 
multi-racial students, 80 percent of Native Hawai-
ian/Pacific Islander students, 77 percent of White 
students, and 68 percent of Asian students received 
financial aid. 
(4) Students depart from institutions of higher 
education with significant debt. In 2008, the average 
student loan debt among graduates of institutions of 
higher education was $23,186, and 1 in 10 recipi-
ents of a baccalaureate degree graduated with at 
least $40,000 in debt. In 2008, 57 percent of recipi-
ents of a baccalaureate degree from a for-profit in-
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stitution of higher education owed more than 
$30,000, and the median amount of debt was 
$32,700. Since 2003, the average cumulative debt 
among students at institutions of higher education 
has increased by 5.6 percent each year. 
(5) Students enrolled in for-profit institutions 
of higher education account for 47 percent of all stu-
dent loan defaults, despite representing approxi-
mately 10 percent of all students enrolled in institu-
tions of higher education. Since 2003, the national 
cohort default rate has increased from 4.5 percent to 
7 percent. 
(6) Students rely on access to credit. Fifty-six 
percent of dependent students at institutions of 
higher education had a credit card in their own 
name in 2004. The average credit card balance 
among such students who were carrying a balance 
on their cards was $2,000. 
(7) According to the National Foundation for 
Credit Counseling, the majority of adults (56 per-
cent of adults in the United States, or 127,000,000 
people) do not have a budget or keep close track of 
expenses or spending. 
(8) According to a 2009 National Bankruptcy 
Research Center study, consumers who received fi-
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nancial education through pre-bankruptcy counseling 
had 27.5 percent fewer delinquent accounts and re-
mained current on their accounts for 29 percent 
longer than consumers who did not receive such 
counseling. 
(9) According to the Financial Industry Regu-
latory Authority Investor Education Foundation, 
less than 1⁄3 of young adults (ages 18 to 29) set 
aside emergency savings to weather unexpected fi-
nancial challenges. 
(10) According to a Jump$tart Coalition for 
Personal Financial Literacy survey, 62 percent of 
high school students cannot pass a basic personal fi-
nance exam, and financial literacy scores among fu-
ture higher education students are low. 
(11) According to research by the National En-
dowment for Financial Education and the University 
of Arizona, schools are the institutions that students 
trust most to help increase their knowledge of per-
sonal finance. 
SEC. 3. FINANCIAL LITERACY COUNSELING. 
Section 485 of the Higher Education Act of 1965 (20 
U.S.C. 1092) is amended by adding at the end the fol-
lowing: 
‘‘(n) FINANCIAL LITERACY COUNSELING.— 
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‘‘(1) IN
GENERAL.—Each eligible institution 
shall provide financial literacy counseling to bor-
rowers in accordance with the requirements of this 
subsection, through— 
‘‘(A) financial aid offices; 
‘‘(B) an employee or group of employees 
designated under subsection (c); or 
‘‘(C) a contract or partnership with a non-
profit organization that has substantial experi-
ence developing or administering financial lit-
eracy and economic education curricula, which 
may include an organization that has received 
grant funding under the Excellence in Eco-
nomic Education Act of 2001 (20 U.S.C. 7267 
et seq.). 
‘‘(2) ENTRANCE
AND
EXIT
COUNSELING
RE-
QUIRED.— 
‘‘(A) IN
GENERAL.—Financial literacy 
counseling, as required under this subsection, 
shall be provided to borrowers on the following 
2 occasions: 
‘‘(i) ENTRANCE
COUNSELING.—Such 
counseling shall be provided not later than 
45 days after the first disbursement of a 
borrower’s first loan that is made, insured, 
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or guaranteed under part B, made under 
part D, or made under part E. 
‘‘(ii) EXIT COUNSELING.—Such coun-
seling shall be provided, in addition to the 
counseling provided under clause (i), prior 
to the completion of the course of study for 
which the borrower enrolled at the institu-
tion or at the time of departure from such 
institution, to each borrower of a loan that 
is made, insured, or guaranteed under part 
B, made under part D, or made under part 
E. 
‘‘(B) EXCEPTIONS.—The requirements of 
subparagraph (A) shall not apply to borrowers 
of— 
‘‘(i) a loan made, insured, or guaran-
teed pursuant to section 428C; 
‘‘(ii) a loan made, insured, or guaran-
teed on behalf of a student pursuant to 
section 428B; or 
‘‘(iii) a loan made under part D that 
is a Federal Direct Consolidation Loan or 
a Federal Direct PLUS loan made on be-
half of a student. 
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‘‘(C) MINIMUM
COUNSELING
REQUIRE-
MENTS.—Such financial literacy counseling 
shall include a total of not less than 4 hours of 
counseling on the occasion described in sub-
paragraph (A)(i), and an additional period of 
not less than 4 hours of counseling on the occa-
sion described in subparagraph (A)(ii). A total 
of not more than 2 hours of counseling for each 
of the occasions described in subparagraph (A) 
shall be provided electronically. 
‘‘(D) 
EARLY
DEPARTURE.—Notwith-
standing subparagraph (C), if a borrower leaves 
an eligible institution without the prior knowl-
edge of such institution, the institution shall at-
tempt to provide the information required under 
this subsection to the student in writing. 
‘‘(3) INFORMATION TO BE PROVIDED.—Finan-
cial literacy counseling, as required under this sub-
section, shall include information on the following: 
‘‘(A) Student financial aid, including— 
‘‘(i) general information about edu-
cational loans, grants, tax credits, and 
scholarships; 
‘‘(ii) the difference between grants, 
scholarships, and loans, the difference be-
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tween Federal loans under this title and 
private educational loans, and the dif-
ference between loans under this title and 
other loan products; and 
‘‘(iii) information about educational 
loan management, including repayment, 
deferment, consolidation, cancellation, dis-
charge, and defaults. 
‘‘(B) Banking basics, including— 
‘‘(i) the types of financial institutions; 
‘‘(ii) the roles, purposes, and uses of 
mainstream financial institutions; and 
‘‘(iii) the fundamentals of opening, 
using, and managing basic savings and 
checking 
accounts, 
including 
common 
rates, fees, and borrower pitfalls. 
‘‘(C) Budgeting and saving, including— 
‘‘(i) the main components of a budget; 
‘‘(ii) designating and prioritizing in-
come, expenses, and personal expenditures; 
and 
‘‘(iii) 
developing 
and 
maintaining 
matching goals and savings plans. 
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‘‘(D) Credit and debt management, includ-
ing responsible use of credit and the pitfalls of 
credit card debt. 
‘‘(E) Credit cards and other common cred-
it products (such as debit cards, student loan 
debit and refund cards, charge cards, pre-paid 
cards, and secured cards linked to checking ac-
counts), including— 
‘‘(i) features, terms, and conditions of 
credit agreements; 
‘‘(ii) responsible use of such cards and 
products; 
‘‘(iii) repayment; and 
‘‘(iv) the consequences of making only 
required minimum payments. 
‘‘(F) Investing, including— 
‘‘(i) common investment products; 
‘‘(ii) establishing investment goals 
(such as education, homeownership, wealth 
building, and retirement); 
‘‘(iii) risks and benefits of investing; 
and 
‘‘(iv) assessing and establishing risk 
tolerance. 
‘‘(G) Credit scores, including— 
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‘‘(i) functions and uses of credit 
scores; 
‘‘(ii) calculation of credit scores; 
‘‘(iii) factors that may improve or 
worsen credit scores; and 
‘‘(iv) how to build a strong credit his-
tory. 
‘‘(H) Housing, including information on— 
‘‘(i) renting; 
‘‘(ii) 
pre-homeownership 
education 
(such as assessing homeownership readi-
ness and capability); and 
‘‘(iii) the basics of mortgage bor-
rowing (such as common mortgage prod-
ucts and qualifying for and obtaining a 
mortgage). 
‘‘(I) Taxes, including— 
‘‘(i) tax filing and planning; and 
‘‘(ii) the tax consequences of financial 
decisions (such as placing an investment or 
purchasing a home). 
‘‘(J) Responsible financial decision making, 
including identifying and analyzing costs, bene-
fits, economic incentives, and alternatives. 
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‘‘(4) USE
OF
INTERACTIVE
PROGRAMS.—The 
Secretary may encourage institutions to carry out 
the requirements of this subsection through the use 
of interactive programs that test the borrower’s un-
derstanding of the financial literacy information pro-
vided through counseling under this subsection, 
using simple and understandable language and clear 
formatting. 
‘‘(5) MODEL FINANCIAL LITERACY COUNSELING 
CURRICULUM.—Not later than 1 year after the date 
of enactment of the College Literacy in Finance and 
Economics Act of 2011, the Secretary shall develop 
a curriculum in accordance with the requirements of 
paragraph (3), which eligible institutions may use to 
fulfill the requirements of this subsection. In devel-
oping such curriculum, the Secretary may consult 
with members of the Financial Literacy and Edu-
cation Commission.’’. 
Æ 
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