In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

SECTION 1. SHORT TITLE.

This Act may be cited as the ''Student Financial Aid Data Privacy
Protection Act''.

SEC. 2. NATIONAL STUDENT LOAN DATA SYSTEM.

Section 485B of the Higher Education Act of 1965 (20 U.S.C. 1092b)
is amended--
(1) by redesignating subsections (d) through (g) as
subsections (e) through (h), respectively;
(2) by inserting after subsection (c) the following:
''(d) Principles for Administering the Data System.--In managing
the National Student Loan Data System, the Secretary shall take actions
necessary to maintain confidence in the data system, including, at a
minimum--
''(1) ensuring that the primary purpose of access to the
data system by guaranty agencies, eligible lenders, and
eligible institutions of higher education is for legitimate
program operations, such as the need to verify the eligibility
of a student, potential student, or parent for loans under part
B, D, or E;
''(2) prohibiting nongovernmental researchers and policy
analysts from accessing personally identifiable information;
''(3) creating a disclosure form for students and potential
students that is distributed when such students complete the
common financial reporting form under section 483, and as a
part of the exit counseling process under section 485(b),
that--
''(A) informs the students that any title IV grant
or loan the students receive will be included in the
National Student Loan Data System, and instructs the
students on how to access that information;
''(B) describes the categories of individuals or
entities that may access the data relating to such
grant or loan through the data system, and for what
purposes access is allowed;
''(C) defines and explains the categories of
information included in the data system;
''(D) provides a summary of the provisions of the
Federal Educational Rights and Privacy Act of 1974 and
other applicable Federal privacy statutes, and a
statement of the students' rights and responsibilities
with respect to such statutes;
''(E) explains the measures taken by the Department
to safeguard the students' data; and
''(F) includes other information as determined
appropriate by the Secretary;
''(4) requiring guaranty agencies, eligible lenders, and
eligible institutions of higher education that enter into an
agreement with a potential student, student, or parent of such
student regarding a loan under part B, D, or E, to inform the
student or parent that such loan shall be--
''(A) submitted to the data system; and
''(B) accessible to guaranty agencies, eligible
lenders, and eligible institutions of higher education
determined by the Secretary to be authorized users of
the data system;
''(5) regularly reviewing the data system to--
''(A) delete inactive users from the data system;
''(B) ensure that the data in the data system are
not being used for marketing purposes; and
''(C) monitor the use of the data system by
guaranty agencies and eligible lenders to determine
whether an agency or lender is accessing the records of
students in which the agency or lender has no existing
financial interest; and
''(6) developing standardized protocols for limiting access
to the data system that include--
''(A) collecting data on the usage of the data
system to monitor whether access has been or is being
used contrary to the purposes of the data system;
''(B) defining the steps necessary for determining
whether, and how, to deny or restrict access to the
data system; and
''(C) determining the steps necessary to reopen
access to the data system following a denial or
restriction of access.''; and
(3) by striking subsection (e) (as redesignated by
paragraph (1)) and inserting the following:
''(e) Reports to Congress.--
''(1) Annual report.--Not later than September 30 of each
fiscal year, the Secretary shall prepare and submit to the
appropriate committees of Congress a report describing--
''(A) the results obtained by the establishment and
operation of the National Student Loan Data System
authorized by this section;
''(B) the effectiveness of existing privacy
safeguards in protecting student and parent information
in the data system;
''(C) the success of any new authorization
protocols in more effectively preventing abuse of the
data system;
''(D) the ability of the Secretary to monitor how
the system is being used, relative to the intended
purposes of the data system; and
''(E) any protocols developed under subsection
(d)(6) during the preceding fiscal year.
''(2) Study.--
''(A) In general.--The Secretary shall conduct a
study regarding--
''(i) available mechanisms for providing
students and parents with the ability to opt in
or opt out of allowing eligible lenders to
access their records in the National Student
Loan Data System; and
''(ii) appropriate protocols for limiting
access to the data system, based on the risk
assessment required under subchapter III of
chapter 35 of title 44, United States Code.
''(B) Submission of study.--Not later than 3 years
after the date of enactment of the Student Financial
Aid Data Privacy Protection Act, the Secretary shall
prepare and submit a report on the findings of the
study to the appropriate committees of Congress.''.
Student Financial Aid Data Privacy Protection Act - Amends the Higher Education Act of 1965 to direct the Secretary of Education to take actions necessary to maintain confidence in the National Student Loan Data System, at a minimum: (1) ensuring that guaranty agencies, lenders, and schools primarily access it for legitimate program operations; (2) prohibiting nongovernmental researchers or policy analysts from accessing personally identifiable information; (3) creating a disclosure form for actual and potential students describing the contents of, and access to, the system; (4) requiring guaranty agencies, lenders, and schools to inform borrowers of Federal Family Education Loans, Direct Loans, and Perkins Loans that such a loan will be submitted to the system and accessible to such entities; (5) regularly review the system to delete inactive users, monitor use, and ensure that data is not used for marketing purposes; and (6) developing standardized protocols for limiting access.

Requires the Secretary to study and report to Congress on: (1) mechanisms giving borrowers the option of restricting lender access to their system records; and (2) appropriate risk-based protocols for limiting access.