Earn to Learn Act
Bill: S.1173 | Sponsor: Sen. Sinema, Kyrsten (D-AZ)
Policy area: Education

Summary:
Earn to Learn Act
This bill directs the Department of Education (ED) to establish a college matched-savings demonstration grant program, through which ED must award competitive grants to states and nonprofit organizations to provide certain low-income students with educational savings accounts (e.g., 529 plans).
Further, ED must (1) develop and make available to grant recipients certain tools, including a training platform, a program guide, an online data portal, and certain trainings (e.g., on college readiness); (2) ensure that participation in the grant program does not affect student eligibility for Federal Pell Grants; and (3) provide technical assistance.
Grant recipients must use funds to (1) select eligible students to participate in the grant program, (2) provide selected students with financial literacy education, (3) establish an educational savings account for each participating student and allow such students and their families to deposit funds in their account to save for attendance at an institution of higher education or an area career and technical education school, and (4) reserve matching funds for participating students. Additionally, grant recipients must ensure that participating students are entitled to withdraw funds from their accounts under certain circumstances.

To establish a matched savings program for low-income students.

    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 ``Earn to Learn Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Skyrocketing costs of higher education are outpacing 
        available financial aid. Individuals in the United States owe 
        more than $1,500,000,000,000 in student loan debt, and more 
        than 3,000 student loan borrowers default on a student loan 
        every day, many of whom left college before finishing a degree.
            (2) The cost of paying for public higher education and 
        workforce training programs continues to rise while the 
        purchasing power of Federal Pell Grant aid has significantly 
        diminished.
            (3) The confluence of these issues forces prospective 
        students to make the tough choice between foregoing 
        postsecondary education and borrowing enough money to pay for 
        college, an amount that is often many times their annual salary 
        and can remain a financial burden for decades after these 
        students graduate.
            (4) The higher rates of loan delinquencies and default 
        among low- and moderate-income populations often lead to 
        increased financial hardship, fewer assets, and lower net 
        worth.
            (5) In 2013, the Brookings Institute found that the 
        increasing debt burden represents a drag on recent graduates 
        and also serves as a deterrent to would-be students who may 
        question the trade-off between the debt burden and the payoff 
        of a college degree.
            (6) During the academic year 2015-2016 the Department of 
        Education found that nearly 3 in 4 students experience unmet 
        need, and that unmet need among college students has risen by 
        23 percent since academic year 2011-2012.
            (7) The Federal Reserve System has determined student loan 
        payments are displacing retirement savings, home ownership, 
        small business development, and other forms of building wealth.
            (8) The Economic Well-Being of U.S. Households in 2018 
        report by the Federal Reserve found that two-thirds of 
        graduates with a bachelor's degree or higher feel that their 
        educational investment paid off financially, but only 3 in 10 
        students who started higher education programs but did not 
        complete a degree share this view.
            (9) The United States urgently needs a new national, 
        innovative approach to financial aid to help low-income 
        students achieve their educational goals, graduate with 
        affordable amounts of student loan debt, and improve their 
        financial capability.

SEC. 3. PURPOSES.

    It is the purpose of this Act to--
            (1) establish a proven and innovative matched savings 
        program for low-income students that provides the financial 
        resources and support those students need to attain their 
        educational goals;
            (2) provide a much-needed supplement to traditional 
        financial aid options through matched savings;
            (3) give students the tools to succeed by giving students 
        the opportunity to invest in their education and to improve 
        their financial capability through financial empowerment 
        training and success coaching; and
            (4) help students--
                    (A) develop healthy financial habits and life 
                skills;
                    (B) prepare to embark on a lifetime of healthy 
                financial practices after graduation; and
                    (C) minimize or eliminate student loan debt.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) 529 account.--The term ``529 account'' means a 
        qualified tuition program as defined in section 529(b) of the 
        Internal Revenue Code of 1986.
            (2) Cost of attendance.--The term ``cost of attendance'' 
        has the meaning given that term in section 472 of the Higher 
        Education Act of 1965 (20 U.S.C. 1087ll).
            (3) Custodial account.--The term ``custodial account'' 
        means a financial account established for the benefit of an 
        eligible student, which shall be treated as a trust if the 
        assets of the custodial account are held by a bank (as defined 
        in section 408(n) of the Internal Revenue Code of 1986 (26 
        U.S.C. 408(n))) or another person who demonstrates, to the 
        satisfaction of the Secretary, that the manner in which such 
        person will administer the custodial account will be consistent 
        with the requirements of this Act.
            (4) Educational savings account.--The term ``educational 
        savings account'' means an account that is--
                    (A) a custodial account; or
                    (B) a 529 account.
            (5) Eligible educational institution.--The term ``eligible 
        educational institution'' means the following:
                    (A) Institution of higher education.--An 
                institution of higher education, as defined in section 
                101 or 102 of the Higher Education Act of 1965 (20 
                U.S.C. 1001, 1002).
                    (B) Area career and technical education school.--An 
                area career and technical education school, as defined 
                in section 3(3) of the Carl D. Perkins Career and 
                Technical Education Act of 2006 (20 U.S.C. 2302(3)).
            (6) Eligible entity.--The term ``eligible entity'' means a 
        State or a nonprofit organization.
            (7) Eligible student.--
                    (A) In general.--The term ``eligible student'' 
                means an individual who--
                            (i) is selected to participate in a college 
                        match savings program;
                            (ii) has been admitted to an institution of 
                        higher education;
                            (iii) is a student from a low-income 
                        family, as determined by the eligible entity;
                            (iv) successfully completes a required 
                        prerequisite personal finance training program;
                            (v) agrees to contribute savings to the 
                        educational savings account administered by the 
                        eligible entity under this section; and
                            (vi) meets any other eligibility criteria 
                        as defined by the eligible entity.
                    (B) Preliminary eligibility.--Notwithstanding 
                subparagraph (A), a student may be selected to 
                participate in the college match savings program on a 
                preliminary basis and given an educational savings 
                account if the student is from a low-income family, as 
                determined by the eligible entity, who plans to attend 
                an institution of higher education.
            (8) Financial capability training platform.--The term 
        ``Financial Capability Training Platform'' means a program for 
        use by a college match savings program carried out with a grant 
        under this section that--
                    (A) delivers financial capability training to 
                participating students that is designed to help 
                students improve their financial capability and overall 
                financial well-being;
                    (B) includes an initial assessment to identify 
                individual learning goals and objectives;
                    (C) creates a personal and dynamic learning 
                experience for each individual participant, including 
                ongoing assessments as well as interim milestones 
                related to learning objectives and longer-term goals; 
                and
                    (D) includes modules on student loans, financial 
                aid, budgeting and credit, consumer debt, housing 
                costs, retirement, the importance of emergency savings, 
                banking (including checking and savings accounts), 
                credit use and interest rates, predatory lending 
                practices, privacy, and security, which shall be 
                conducted by or at the direction of the eligible 
                entity.
            (9) Program guide.--The term ``Program Guide'' means a 
        guide that includes program policies and procedures, a savings 
        plan agreement template, withdrawal form template, recommended 
        timelines, other key forms, and the structure for implementing 
        and reporting program results for a college match savings 
        program carried out with a grant under this section.
            (10) Reporting dashboard.--The term ``Reporting Dashboard'' 
        means a robust online data portal for college match savings 
        programs carried out with a grant under this section that--
                    (A) allows eligible entities to monitor student 
                progress, track achievement, and measure relevant 
                behavioral change;
                    (B) standardizes and facilitates student evaluation 
                across participating institutions; and
                    (C) is in compliance with the requirements of 
                section 444 of the General Education Provisions Act 
                (commonly known as the `Family Educational Rights and 
                Privacy Act of 1974').
            (11) Success coaching model.--The term ``Success Coaching 
        Model'' includes--
                    (A) financial capability training to address 
                budgeting, managing student debt, savings, debit 
                management, credit cards, retirement readiness, and 
                credit reports;
                    (B) college readiness training that provides 
                mentoring to help students be better prepared for the 
                challenges of postsecondary education; and
                    (C) workforce readiness training to learn 
                interviewing, resume skills, and career exploration.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

SEC. 5. COLLEGE SAVINGS DEMONSTRATION GRANT PROGRAM.

    (a) Grant Established.--
            (1) In general.--Not later than 9 months after the date of 
        enactment of this Act, the Secretary shall establish a college 
        matched savings demonstration grant program described in this 
        section, through which the Secretary shall award grants, on a 
        competitive basis, to eligible entities to enable those 
        eligible entities to carry out the activities described in 
        subsection (e).
            (2) Tools for grantees.--The Secretary shall develop the 
        Reporting Dashboard, Financial Capability Training Platform, 
        Program Guide, and Success Coaching Model and make those tools 
        available to grantees.
            (3) Pell eligibility not affected.--The Secretary shall 
        ensure that, notwithstanding any other provision of law--
                    (A) participation in the grant program shall not 
                affect a student's eligibility for a Federal Pell 
                Grant; and
                    (B) funds deposited in an educational savings 
                account by a participating student, as well as any 
                matching funds under this section, shall not be 
                considered when a determination is made about that 
                student's eligibility for Federal student aid under 
                title IV of the Higher Education Act of 1965 (20 U.S.C. 
                1070 et seq.), including for a Federal Pell Grant.
    (b) Application.--An eligible entity that desires to participate in 
the grant program shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may determine, including, at a minimum--
            (1) a demonstration of--
                    (A) a commitment of non-Federal matching funds at a 
                ratio of 1:1 (which non-Federal funds may be provided 
                by an entity other than the eligible entity);
                    (B) the ability to launch and implement the 
                program; and
                    (C) a plan for compliance with evaluation and 
                program monitoring; and
            (2) an assurance that the applicant will utilize the 
        Reporting Dashboard, Financial Capability Training Platform, 
        and Success Coaching Model developed by the Secretary under 
        subsection (a)(2).
    (c) Selection.--
            (1) Priority.--In selecting eligible entities to 
        participate in the grant program, the Secretary shall give 
        priority to eligible entities that--
                    (A) target individuals at a statewide level with 
                networks of participating eligible educational 
                institutions; and
                    (B) commit to supporting selected eligible students 
                through the student's graduation from an institution of 
                higher education.
            (2) Diversity of projects.--The Secretary shall ensure, to 
        the maximum extent practical, that the grants awarded under 
        this section include eligible entities that represent a range 
        of communities (both rural and urban) and diverse populations.
    (d) Amount.--A grant awarded under this section shall be in an 
amount not to exceed the lesser of--
            (1) the aggregate amount of funds committed as matching 
        contributions from non-Federal public or private sector 
        sources; or
            (2) $10,000,000.
    (e) Uses of Funds.--
            (1) In general.--An eligible entity receiving a grant under 
        this section shall use the grant funds to--
                    (A) select eligible students, or students who may 
                have preliminary eligibility, in the State in which the 
                eligible entity is located to participate in the grant 
                program;
                    (B) provide selected students with financial 
                literacy education using the Success Coaching Model;
                    (C) after ensuring that a selected eligible student 
                or selected student with preliminary eligibility has 
                completed an agreement regarding the terms and 
                conditions of the educational savings account, 
                establish an educational savings account for each 
                participating eligible student or student who has 
                preliminary eligibility and allow students and their 
                families to deposit funds in that account to save for 
                attendance at an eligible educational institution; and
                    (D) reserve matching funds for participating 
                students in accordance with paragraph (2).
            (2) Matching funds.--
                    (A) In general.--After a student or student's 
                family meets a $500 savings threshold, for every 
                additional $1 a student or student's family contributes 
                to an educational savings account, that amount shall be 
                matched by an additional $8 that the eligible entity 
                will pay to the student's individual account at the 
                student's eligible educational institution once that 
                student meets the requirements of section 4(7)(A), 
                including being accepted to an eligible educational 
                institution.
                    (B) Withdrawal from school.--If a participating 
                student withdraws from an eligible institution during 
                the drop-add period at that eligible institution, the 
                student shall be responsible for any amounts owed for 
                that academic period and will not receive matching 
                funds for that academic period.
                    (C) Delay of attendance; extenuating 
                circumstances.--Subject to paragraph (3), each eligible 
                entity shall describe in the agreement under paragraph 
                (1)(C) the eligible entity's policy regarding the 
                availability of matching funds in the event a student 
                decides to delay attendance at an eligible institution 
                or in the case of extenuating circumstances, such as 
                illness of a student.
            (3) Return of deposited funds.--
                    (A) In general.--Each eligible entity shall ensure 
                that a participating student, including a student with 
                preliminary eligibility, who does not meet or maintain 
                the requirements of section 4(7)(A) shall be entitled 
                to withdraw funds that the student or the student's 
                family contributed to the educational savings account 
                in accordance with the terms and conditions that are 
                contained in the agreement for that educational savings 
                account, as described in paragraph (1)(C).
                    (B) Expiration.--On the date that is 6 years after 
                the date on which a participating eligible student 
                first enrolled in an eligible educational institution, 
                that student's participation in the college matched 
                savings demonstration grant program shall terminate. 
                The eligible entity shall cease reserving matching 
                funds on behalf of that student as described in 
                paragraph (1)(D). Any remaining funds that the student 
                or the student's family deposited in an educational 
                savings account shall be made available for withdrawal 
                in accordance with subparagraph (A).
            (4) Management costs.--An eligible entity receiving a grant 
        under this section may use not more than 5 percent of grant 
        funds for management costs, which may include nonadministrative 
        and administrative functions, including program management, 
        reporting requirements, recruitment and enrollment of 
        individuals, and monitoring.
    (f) Data Sharing.--An eligible entity receiving a grant under this 
Act shall enter into a data sharing agreement with eligible 
institutions in order to exchange data necessary to carry out the 
activities described in this section. Such data sharing shall be 
carried out in a manner that complies with the requirements of section 
444 of the General Education Provisions Act (commonly known as the 
`Family Educational Rights and Privacy Act of 1974').
    (g) Annual Progress Reports.--Each eligible entity receiving a 
grant under this section shall prepare and submit to the Secretary an 
annual progress report containing the following information, in the 
aggregate and in a manner that protects personally identifiable 
information in accordance with Federal privacy laws:
            (1) The number and characteristics of participating 
        eligible students making a deposit into an educational savings 
        account.
            (2) Data on program goals and achievements including 
        enrollment rates, first-year retention rates, program 
        completion, average Federal student loan debt, and share of 
        students borrowing Federal student loans.
            (3) The amount that the eligible entity has reserved in 
        accordance with subsection (e)(1)(D).
            (4) The aggregate amounts deposited in educational savings 
        accounts by students and their families, without including any 
        personally identifiable information.
            (5) What service configurations of the eligible entity 
        (such as configurations relating to peer support, structured 
        planning exercises, mentoring, and case management) increased 
        the rate and consistency of participation in the demonstration 
        project and how such configurations varied among different 
        populations or communities.
            (6) Such other information as the Secretary may require to 
        evaluate the demonstration project.
    (h) Report to Congress.--Not later than 12 months after the 
establishment of this demonstration project, the Secretary of Education 
shall prepare and submit to Congress a report containing the following 
information:
            (1) The effects of incentives and organizational or 
        institutional support on college retention in the demonstration 
        project.
            (2) The savings rates of individuals in the demonstration 
        project, in the aggregate and disaggregated by demographic 
        characteristics including gender, age, family size, race or 
        ethnic background, and income.
            (3) The effects of educational savings accounts on savings 
        rates, college retention and completion, and how such effects 
        vary among different populations or communities.
            (4) The lessons to be learned from the demonstration 
        projects conducted under this Act and whether a permanent 
        college savings grant program should be established.
            (5) The characteristics of educational savings accounts 
        (such as threshold amounts and match rates) required to 
        stimulate participation in the demonstration project, and how 
        such characteristics vary among different populations or 
        communities.
            (6) Such other factors as may be prescribed by the 
        Secretary.
    (i) Technical Assistance.--The Secretary of Education may reserve 
not more than 10 percent of the amounts appropriated under section to 
provide technical assistance to eligible entities receiving grants 
under this Act.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act 
$100,000,000 for fiscal year 2021 and each of the succeeding 4 years.
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