[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2877 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 2877
To establish a matched savings program for low-income students.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 21, 2023
Ms. Sinema (for herself and Mr. Romney) introduced the following bill;
which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
A BILL
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 $1,700,000,000,000 in student loan debt, and more
than 3,000 student loan borrowers default on a student loan
every day, many of whom did not complete their educational
program before obtaining 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
it, 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 2015-2016 academic year, the Department of
Education found that nearly 3 in 4 students experienced unmet
need, and that unmet need among postsecondary students had
risen by 23 percent since the 2011-2012 academic year.
(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 Report on the Economic Well-Being of United States
Households in 2018 by the Federal Reserve found that 2 in 3
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, 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. PURPOSE.
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) Eligible educational institution.--The term ``eligible
educational institution'' means--
(A) an institution of higher education, as defined
in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002); or
(B) 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)).
(3) Eligible entity.--The term ``eligible entity'' means a
State or a nonprofit organization.
(4) Eligible student.--The term ``eligible student'' means
an individual who--
(A) is selected to participate in a postsecondary
education match savings account program;
(B) has been admitted to an eligible educational
institution;
(C) is a student from a low-income family, as
determined by the eligible entity;
(D) successfully completes a required prerequisite
personal finance training program;
(E) agrees to contribute savings to the
postsecondary education match savings account
administered by the eligible entity under this section;
and
(F) meets any other eligibility criteria as defined
by the eligible entity.
(5) Financial capability training platform.--The term
``Financial Capability Training Platform'' means a program for
use by a postsecondary education match savings account program
carried out with a grant under section 5 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 and 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.
(6) Postsecondary education match savings account.--The
term ``postsecondary education match savings account'' means an
account that is--
(A) a custodial account; or
(B) a 529 account.
(7) Program guide.--The term ``Program Guide'' means a
guide that includes program policies and procedures, a savings
plan agreement template, a withdrawal form template,
recommended timelines, other key forms, and the structure for
implementing and reporting program results for a postsecondary
education match savings account program carried out with a
grant under this section.
(8) Reporting dashboard.--The term ``Reporting Dashboard''
means a robust online data portal for postsecondary education
match savings account 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 eligible educational 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'') (20 U.S.C. 1232g).
(9) Secretary.--The term ``Secretary'' means the Secretary
of Education.
(10) Student with preliminary eligibility.--The term
``student with preliminary eligibility'' means an individual
who--
(A) is from a low-income family, as determined by
an eligible entity;
(B) plans to attend an eligible educational
institution; and
(C) meets the requirements described in
subparagraphs (E) and (F) of paragraph (4).
(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) postsecondary education 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.
SEC. 5. POSTSECONDARY EDUCATION MATCH SAVINGS ACCOUNT 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
postsecondary education match savings account 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
under section 401 of the Higher Education Act of 1965
(20 U.S.C. 1070a); and
(B) funds deposited in a postsecondary education
match 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 under this section 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 under this section, the
Secretary shall give priority to eligible entities that--
(A) target eligible students and students with
preliminary eligibility at a statewide level with
networks of participating eligible educational
institutions; and
(B) commit to supporting selected students through
the student's graduation from an eligible educational
institution.
(2) Diversity of projects.--The Secretary shall ensure, to
the maximum extent practicable, that the eligible entities
awarded grants 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 with
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 postsecondary education match savings
account, establish a postsecondary education match
savings account for each participating eligible student
or student with 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.--Upon a participating student or
student's family depositing $100 into a postsecondary
education match savings account for the appropriate
academic year, the eligible entity shall provide a
match of $8 into the student's postsecondary education
match savings account for each subsequent dollar
deposited by the student or student's family.
(B) Withdrawal from school.--If a participating
student withdraws from an eligible educational
institution during the drop-add period at that eligible
educational 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 educational
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 eligible student, or a student
with preliminary eligibility, who does not meet or
maintain the requirements of paragraph (4) or (10) of
section 4, respectively, shall be entitled to withdraw
funds that the student or the student's family
contributed to the postsecondary education match
savings account in accordance with the terms and
conditions that are contained in the agreement for that
postsecondary education match savings account, as
described in paragraph (1)(C).
(B) Expiration.--
(i) In general.--The participation of an
eligible student or student with preliminary
eligibility in the postsecondary education
match savings account demonstration grant
program shall terminate on the expiration date
described in clause (ii). 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 a
postsecondary education match savings account
shall be made available for withdrawal in
accordance with subparagraph (A).
(ii) Expiration date.--The expiration date
described in this clause is--
(I) the date that is 8 years after
the date on which a participating
eligible student first enrolled in an
eligible educational institution; or
(II) in the case of a student with
preliminary eligibility, or a
participating eligible student who does
not enroll in an eligible educational
institution, the date that is 4 years
after the date on which the student
first agrees to participate in the
postsecondary education match savings
account demonstration grant program.
(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
section shall enter into a data sharing agreement with eligible
educational 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'') (20 U.S.C.
1232g).
(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
students making a deposit into a postsecondary education match
savings account supported under this section.
(2) Data on program goals and achievements including
enrollment rates, first-year retention rates, program
completion, average Federal student loan debt, and share of
participating eligible 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 postsecondary
education match savings accounts by participating students and
their families.
(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 1 year after the
establishment of the demonstration project under this section, the
Secretary shall prepare and submit to Congress a report containing the
following information:
(1) The effects of incentives and organizational or
institutional support on postsecondary 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 postsecondary education match savings
accounts on savings rates and postsecondary education 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 section and whether a permanent
postsecondary education savings grant program should be
established.
(5) The characteristics of postsecondary education match
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 may reserve not more than
10 percent of the amounts appropriated under section 6 to provide
technical assistance to eligible entities receiving grants under this
section.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this Act
$100,000,000 for fiscal year 2024 and each of the succeeding 4 years.
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