Financial Fitness Act

Bill: 118-hr-8944
Sponsor: full_name: Rep. Leger Fernandez, Teresa [D-NM-3]
Introduced: 2024-07-08
Policy area: Education
Latest action: action_date: 2024-07-08
text: Referred to the House Committee on Education and the Workforce.

Summaries:

tv_txt: I 118th CONGRESS 2d Session H. R. 8944 IN THE HOUSE OF REPRESENTATIVES July 8, 2024 Ms. Leger Fernandez introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To direct the Secretary of Education to establish a personal finance education portal on a centralized website of the Department of Education pertaining to Federal financial aid.

1. Short title This Act may be cited as the Financial Fitness Act . 2. Findings Congress finds the following: (1) Nearly 45,300,000 people owe an average of $37,338 in Federal student loans, and student loan debt in the United States totals $1,765,000,000,000. The average student loan debt has tripled since 2007. (2) Student debt has significant racial equity implications. Approximately half of Black college students are using Federal student loans to cover educational costs, and Black college graduates are still substantially more likely than white college graduates to default on their debt within 4 years of graduation. In addition, the default rate for Black borrowers is substantially higher than white borrowers (17 percent versus 9 percent). Students who are veterans, parents, first-generation college students, or low income are also likely to face higher risk of default. (3) As of 2022, 18 percent of Hispanic and Latino college graduates who had taken out loans for tuition and school expenses were behind on their payments, in contrast with 9 percent of White student borrowers. Hispanic and Latino borrowers also were the most likely to delay getting married and having children due to student loan debt. (4) Native American financial status remains among the lowest of all minority populations in the Nation. Native people are the least likely of all population groups, including other minorities, to plan for retirement, have an emergency fund, or have a checking account. (5) Among college graduates with any outstanding debt for their education, first-generation college graduates tend to owe more. (6) Student debt among older adults has steadily increased, with many individuals taking on debt to finance higher education for their children and grandchildren. (7) Despite the fact that many students and families must make substantial and highly consequential decisions about student loan borrowing and face growing college affordability challenges, only 17 States make personal finance a required part of basic education. (8) Of non-retired American adults, 42 percent age 18–29 have no retirement savings; 26 percent of those age 30–44; 17 percent of those age 45–59; and 13 percent of those over age 60. (9) People with self-directed retirement savings (nearly 7 in 10 non-retired adults) must make decisions about how the money is invested. Six in 10 non-retirees with these self-directed accounts express low levels of comfort in making investment decisions with their retirement savings. (10) The COVID–19 pandemic exacerbated the need to provide families with better tools to weather financial challenges, with a rapid spike in unemployment occurring in mid-2020, along with significant shifts to individuals’ housing and transportation needs. (11) Nearly 1 in 10 student loan borrowers end up in default, and even more struggle to repay their loans, indicating an important need to ensure borrowers can access information to help them navigate repayment and succeed financially. 3. Personal finance education portal (a) In general Not later than 3 years after the date of enactment of this Act, the Secretary of Education, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue, shall establish a personal finance education portal on a centralized and publicly available website of the Department of Education pertaining to Federal financial aid for the voluntary use by recipients of aid awarded under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ). (b) Content of personal finance education portal The personal finance education portal established under subsection (a) shall include information on personal finance concepts, including the following: (1) Core personal finance concepts, such as earning, saving, investing, spending, and borrowing, including— (A) the concept of compound growth as it applies to savings and retirement savings, with information about the different types of retirement savings accounts; and (B) budgeting and credit usage. (2) Managing student loan repayment, including— (A) the interaction between savings and retirement decisions and Federal student loan repayment plans; (B) Federal student loan discharge or forgiveness options; (C) the types of voluntary benefits employers may use to help workers while they are paying down student loan debt; (D) tax credits or deductions that are relevant to student loan borrowers in repayment; (E) how to interpret loan terms and conditions; (F) how to distinguish between Federal student loans and private student loans and their benefits; and (G) any other Federal policies that significantly impact student loan borrowers in repayment, as determined by the Secretary of Education. (3) Any other personal finance concepts determined relevant by the Secretary of Education, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue. (c) Provision of content The personal finance content included under subsection (b) may be provided in an interactive format through text or video. (d) Analytics The Secretary of Education, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue, shall review not less than once every three years the utilization of the portal established under subsection (a) and make such findings publicly available. (e) Authorization of appropriations There are authorized to be appropriated to carry out this Act $5,000,000 for the period of fiscal years 2024 through 2027.