I 114th CONGRESS 2d Session H. R. 5755 IN THE HOUSE OF REPRESENTATIVES July 13, 2016 Mr. Messer (for himself, Ms. Stefanik , Mr. Rokita , Mrs. Brooks of Indiana , Mr. Bucshon , Mr. Swalwell of California , and Mr. Young of Indiana ) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To amend the Higher Education Act of 1965 to require institutions of higher education to provide students with annual estimates of student loan borrowing costs.

1. Short title This Act may be cited as the Letter of Estimated Annual Debt for Students Act of 2016 or the LEADS Act of 2016 . 2. Annual estimate of student loan borrowing costs Section 485 of the Higher Education Act of 1965 ( 20 U.S.C. 1092 ) is amended by adding at the end the following: (n) Annual estimate of student loan borrowing costs (1) In general Beginning on July 1, 2018, each eligible institution shall provide a cost estimate described in paragraph (2) to each enrolled student who receives an education loan to attend the institution, not later than 30 days before the first day of each academic year beginning after the academic year for which the student first received such a loan to attend such institution. (2) Contents of estimate The estimate under paragraph (1) shall contain the following information: (A) Cumulative balances and monthly payments A notice to the student of— (i) the cumulative balance of education loans owed by the student as of the date of the notice; (ii) the amount of any new education loans expected to be disbursed during such academic year; (iii) the projected cumulative balance of education loans that will be owed by the student after the completion of the student’s course of study at the institution; and (iv) projected monthly payment amounts based on the cumulative balances described in clauses (i), (ii), and (iii), respectively, assuming a standard repayment schedule. (B) Interest rates The interest rate of each education loan, except that interest rates for a private education loan may be based on average private education loan interest rates if the institution cannot reasonably determine the actual interest rate of such loan. (C) Disclaimer A clear and conspicuous notice stating that any information provided under paragraph (1) is an estimate, accurate to the best of the institution’s knowledge, and that an interest rate provided under subparagraph (B)— (i) in the case of a loan described in paragraph (6)(A)(i), is the applicable rate of interest of such loan; (ii) in the case of a private education loan, may be based on average private education loan interest rates; and (iii) does not include private education loans of which the institution is not aware. (3) Form of estimate The estimate under paragraph (1) shall be— (A) provided to the student in hard copy format on the letterhead of the institution, by electronic mail or by another method the Secretary may prescribe; and (B) delivered to the student separately from any other disclosures required under this Act. (4) Limitation of liability An institution that provides the estimate under paragraph (1) in good faith shall not be liable to any person for inaccuracies contained in such estimate. (5) Student debt letter template Not later than July 1, 2017, and as necessary thereafter, the Secretary shall provide the following to eligible institutions: (A) Examples of estimates required under paragraph (2). (B) Technical assistance on how to comply with the requirements of this subsection. (C) Preliminary approvals in a timely manner of estimate formats proposed for use by an institution, at the request of the institution. (D) The formula (which shall take into consideration a student’s past borrowing rates and other criteria the Secretary may determine) to be used in making the projections under clauses (iii) and (iv) of paragraph (2)(A) with respect to loans described in paragraph (6)(A)(i). (E) Encryption technology software to enable institutions to provide the estimate under paragraph (2) to students in a secure format for institutions that choose to provide the estimate to students in an electronic format. (6) Definitions In this subsection: (A) Education loan The term education loan means— (i) a loan made under part D (other than a Federal Direct Consolidation Loan or a Federal Direct PLUS loan made on behalf of a student); (ii) a loan made under a State-sponsored loan program for the purpose of paying a student’s cost of attendance at an institution of higher education; and (iii) a private education loan with respect to which the institution should reasonably be aware. (B) Private education loan The term private education loan has the meaning given the term in section 140 of the Truth in Lending Act. (C) Student The term student , when used with respect to an eligible institution, does not include any student who has transferred to the institution more than 60 days before the first day of the academic year involved. . 3. Annual provision of information by the Secretary of Education Not later than April 1, 2018, and annually thereafter, the Secretary of Education shall provide to institutions of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) the following information: (1) The amount of any loans made under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) (other than a Federal Direct Consolidation Loan or a Federal Direct PLUS loan made on behalf of a student) expected to be disbursed to any borrower for the next academic year. (2) The projected cumulative balance of such loans, as determined in accordance with section 485(n)(5)(D) of such Act ( 20 U.S.C. 1092(n)(5)(D) ), as added by this Act, that will be owed by any borrower after the completion of the borrower’s course of study at an institution of higher education. (3) The projected monthly payment amounts of such loans, as determined in accordance with section 485(n)(5) of the Higher Education Act of 1965 ( 20 U.S.C. 1092(n)(5) ), assuming a standard repayment schedule (as described in section 455(d)(1)(A) of such Act ( 20 U.S.C. 1087e(d)(1)(A) )).