State-Based Education Loan Awareness Act
Bill: H.R.7588 | Sponsor: Rep. Sessions, Pete (R-TX)
Policy area: Education

Summary:
State-Based Education Loan Awareness Act
This bill excludes certain arrangements or agreements regarding education loans from the definition of a preferred lender arrangement.
A preferred lender arrangement is an arrangement or agreement between a lender and an institution of higher education (IHE) that receives federal funding or assistance (1) under which a lender issues education loans to students attending the IHE; and (2) that relates to the IHE recommending, promoting, or endorsing the education loan products of the lender.
The bill provides that arrangements or agreements made under a state-based education loan program or that are funded, insured, or guaranteed by any federal agency other than the Department of Education do not meet the definition of a preferred lender agreement for purposes of certain required disclosures to student borrowers.

To establish that a State-based education loan program is excluded from 
    certain requirements relating to a preferred lender arrangement.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State-Based Education Loan Awareness 
Act''.

SEC. 2. STATE-BASED EDUCATION LOAN PROGRAMS.

    Section 151 of the Higher Education Act of 1965 (20 U.S.C. 1019) is 
amended--
            (1) in paragraph (8)(B)--
                    (A) in clause (i), by striking ``or'' after the 
                semicolon;
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) arrangements or agreements with 
                        respect to education loans made under a State-
                        based education loan program; or
                            ``(iv) arrangements or agreements with 
                        respect to education loans funded, insured, or 
                        guaranteed by any other Federal agency that is 
                        not the Department of Education.''; and
            (2) by adding at the end the following:
            ``(10) State-based education loan program.--The term 
        `State-based education loan program' means an education loan 
        program that--
                    ``(A) is provided by a State agency, State 
                authority, or nonprofit organization, separately or 
                jointly;
                    ``(B) makes loans that are not funded, insured, or 
                guaranteed by the Federal Government;
                    ``(C) is authorized, established, or chartered by 
                State law, or otherwise approved by the State;
                    ``(D) offers one or more loans for which the 
                interest rate and fees, as calculated in accordance 
                with sections 106 and 107 of the Truth in Lending Act 
                (15 U.S.C. 1605; 1606), are at least as favorable as 
                the interest rate and fees of the Direct PLUS loans 
                authorized under part D of title IV at the time such 
                loan is originated; and
                    ``(E) is available only to a borrower who has been 
                advised by an institution of higher education (as 
                defined under section 102)--
                            ``(i) that the borrower has the opportunity 
                        to exhaust eligibility for Federal education 
                        loans made under part D of title IV prior to 
                        accepting a private education loan; and
                            ``(ii) of the interest rates, fees, and 
                        benefits of such Federal education loans, 
                        including income-driven repayment options, 
                        opportunities for loan forgiveness, forbearance 
                        or deferment options, interest subsidies, and 
                        tax benefits.''.
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