EMPOWERING STUDENTS THROUGH ENHANCED FINANCIAL COUNSELING ACT
(House of Representatives - July 24, 2014)

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[Pages H6758-H6767]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     EMPOWERING STUDENTS THROUGH ENHANCED FINANCIAL COUNSELING ACT


                             General Leave

  Mr. KLINE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on H.R. 4984.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Minnesota?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 677 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 4984.
  The Chair appoints the gentlewoman from Tennessee (Mrs. Black) to 
preside over the Committee of the Whole.

                              {time}  1240


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 4984) to amend the loan counseling requirements under the Higher 
Education Act of 1965, and for other purposes, with Mrs. Black in the 
chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Minnesota (Mr. Kline) and the gentlewoman from 
Oregon (Ms. Bonamici) each will control 30 minutes.
  The Chair recognizes the gentleman from Minnesota.
  Mr. KLINE. Madam Chair, I rise today in strong support of the 
Empowering Students Through Enhanced Financial Counseling Act, and I 
yield myself such time as I may consume.
  Madam Chair, every family knows the cost of pursuing a higher 
education is out of control. It is felt intensely each and every day by 
countless Americans, by parents who worry how they will put their kids 
through college, by students who fear they will be left with a pile of 
debt and no job prospects, and by working men and women who hope a 
degree will let them reach the next rung on the economic ladder.
  We know that solutions to the college cost problem must ultimately 
come from States and institutions, but there are things Congress can do 
right now to keep the dream of a postsecondary education within reach.
  Helping students find the right institution is one way we can make a 
difference. Yesterday, the House passed, with strong bipartisan 
support, the Strengthening Transparency in Higher Education Act. The 
legislation will arm students with the best information available in a 
format that is easy to understand, information that includes key facts 
such as an institution's costs, completion rates, and student loan 
debt.
  Students and families currently face a tsunami of information that is 
the

[[Page H6759]]

mostly confusing, conflicting, and unnecessary. The bill streamlines 
the information and how it is delivered, enabling students to be smart 
shoppers in the college marketplace.
  However, picking an institution is only half the challenge. Families 
then have to figure out how to pay for it, and far too many are 
unprepared to make those tough decisions. Some students choose loans 
and debt when other assistance in the form of grants and scholarships 
are readily available. And those that do opt for student loans often 
have no real concept of what they are getting into or what it means for 
their future.
  Clearly, current policies promoting financial literacy are coming up 
short. That is why I am pleased to support the Empowering Students 
Through Enhanced Financial Counseling Act. This bipartisan legislation 
includes a series of reforms that will help students and families make 
wise financial decisions about their postsecondary education.
  For example, the bill ensures borrowers--both students and parents--
receive annual counseling that reflects their personal situations and 
requires consent each year before receiving a Federal loan. The 
legislation also makes sure low-income individuals who rely on Pell 
grants are informed about the terms and conditions of their grant.
  The bill also delivers more robust counseling upon graduation, 
requiring that information on a borrower's loan balance and anticipated 
monthly payments be provided. Finally, the legislation directs the 
Secretary of Education to maintain a consumer-tested, online counseling 
tool that will help institutions put this important information into 
the hands of those who need it.
  Madam Chairman, this legislation is part of a broader effort to 
strengthen our Nation's higher education. Neither this bill nor the 
bills passed earlier this week are a silver bullet to challenges we 
face. However, by working together, we can begin to make a difference 
in the lives of students and families, and that is precisely what the 
House is doing.
  Madam Chairman, I want to thank the bipartisan authors of the 
legislation, Representatives Brett Guthrie, Richard Hudson, and Suzanne 
Bonamici.
  I urge my colleagues to support the bill and reserve the balance of 
my time.

                              {time}  1245

  Ms. BONAMICI. Madam Chair, I yield myself such time as I may consume, 
and I rise today in support of the Empowering Students Through Enhanced 
Financial Counseling Act.
  I would like to start by thanking Chairman Kline, Ranking Member 
Miller, and Congressman Guthrie for their leadership on this bill, 
which will improve the financial counseling that millions of student 
loan borrowers receive. I am pleased that Members are coming together 
to take a meaningful step toward protecting student loan borrowers. I 
also want to thank the Committee on Education and Workforce staff on 
both sides of the aisle for their hard work to include Members' shared 
priorities in a bill that has earned tremendous bipartisan support.
  The need for enhanced financial counseling for students is clear. 
More than 40 million Americans are carrying more than $1.2 trillion in 
student loan debt, and default rates are climbing. At the same time 
there is evidence that student loan debt is a drag on the broader 
economy. Borrowers struggling with debt may delay purchasing a new car, 
a home, or new appliances. They may be unable to access capital to 
start a business, or they may put off saving for retirement.
  Of course, the solution to the mounting burden of student loan debt 
will require a number of changes. We will need to address rising 
tuition, and we will need to do a better job of granting existing 
borrowers access to affordable repayment plans. But we also must help 
current and future students understand their rights and obligations as 
borrowers. And we need to help them forecast their obligations in the 
years after college so they can make informed decisions now and for the 
future.
  One of the frustrations I hear frequently from former students is 
that they didn't understand the jumble of terms and products in the 
student loan market when they were borrowing. Many didn't ask questions 
until after they left college. What kind of loans did they borrow? When 
will they need to begin repayment? What will their monthly payments be, 
and what repayment plans will be available?
  That is why I am especially pleased that H.R. 4984 goes beyond 
entrance counseling for new borrowers and requires annual counseling 
for all student loan borrowers.
  Under this bill, students, whether they are sophomores or seniors, 
will have information about how much they have borrowed, what they are 
expected to borrow to complete their education, how their loans will 
accrue interest, and what they can expect their monthly payments to be 
when they leave college. They will be better able to see their road to 
repayment.
  Importantly, providing annual counseling means that borrowers who 
don't graduate will still receive information about what to expect when 
they leave school and enter repayment. Borrowers will have more clarity 
on their monthly payments under two repayment plans: income-based 
repayment and the standard 10-year option. Streamlining this 
information will simplify the repayment process.
  Borrowers will be reminded each year that they don't have to borrow 
the full amount made available, and they should consider grants, work 
study, and Federal loans before turning to private lenders. Unlike 
current practice, borrowers will receive financial counseling before 
signing their master promissory note, and they will be reminded that 
they can repay interest before it capitalizes.
  H.R. 4984 will provide for the first time important disclosures to 
parents who borrow for their children. Parent borrowers of student 
loans will be given virtually the same information about their loans as 
students receive. And the bill will extend counseling to Pell grant 
recipients so that they understand the limits on eligibility for Pell 
grants, and the circumstances in which they would be asked to repay 
their grants.
  Finally, this bill delivers enhanced student loan information in 
consumer-tested formats to check for student understanding. It will 
ensure that we provide personalized borrower information that the 
borrowers understand.
  Madam Chair, there is another reason why this bill is so important 
right now. Recent consumer complaints suggest that some debt settlement 
companies are using predatory practices to target student loan 
borrowers. These firms target low-income and minority borrowers, but 
also Americans giving back through public service careers, like 
firefighting, teaching, and law enforcement. These firms are reportedly 
charging thousands of dollars to enroll borrowers in Federal income-
based repayment programs, a program that borrowers can enroll in for 
free.
  Until we can address these predatory practices directly, this bill 
will go a long way to ensuring that students fully understand their 
eligibility for income-based repayment. In short, the Empowering 
Students Through Enhanced Financial Counseling Act will help Pell grant 
recipients and student loan borrowers. It will help the borrowers 
anticipate their monthly payments and plan their road to repayment. 
This will make a real positive difference, and I ask my colleagues to 
join me in supporting H.R. 4984.
  I reserve the balance of my time.
  Mr. KLINE. Madam Chair, I am now pleased to yield 3 minutes to the 
gentleman from Kentucky (Mr. Guthrie), a key member of the committee.
  Mr. GUTHRIE. Madam Chair, I rise today in support of H.R. 4984, the 
Empowering Students Through Enhanced Financial Counseling Act.
  But first, I want to say thanks to my friend from Oregon, 
Congresswoman Bonamici, for putting together a coalition of both sides 
where we can come together to address a problem that faces so many of 
the people who sent us here to represent them. And to the chairman, we 
are going to pass three or four bills this week in a bipartisan manner. 
The President signed a bill that passed this committee this week as 
well. It shows that he is putting together where we can find common 
ground to solve problems that really affect the people who sent us here 
to represent them. We appreciate him for that.

[[Page H6760]]

  But to address this bill: with the rising costs of attaining a 
college degree, many students need financial assistance to make that 
dream a reality. This bill will increase financial literacy by 
reforming the current guidelines to require annual counseling for 
student borrowers. In doing so, students will be empowered with the 
knowledge necessary to understand what they are borrowing, which 
financial options to draw from first, and the implication of their 
future debt load in repayment scenarios.
  A June 2014 report from the Federal Reserve Bank of New York reported 
that less than 50 percent of survey respondents with student debt have 
what they consider a high loan literacy.
  Current Federal law only requires colleges and universities to 
provide financial counseling to student borrowers at the beginning of 
their studies. In short, these students get a quick snapshot of their 
loan obligations after they have already committed to the first year's 
loans, and then again once they have accrued their entire loan burden. 
Making matters worse, these counseling sessions tend to be broad and 
not based on information specific to the borrower. Many of today's 
students do not have a clear picture of what their financial obligation 
will look like upon graduation, and aren't necessarily given any 
opportunity to make decisions to alter that course. So will this bill 
make a difference?

  Well, we have an example. Indiana University--being from Kentucky, I 
have to admit, Indiana University has begun a process of educating 
students annually prior to accepting their aid package for the 
following year, similar to our efforts in this bill. IU found that 
Federal undergraduate Stafford loan disbursements dropped by $31 
million, or 11 percent, from the previous year. That is five times the 
decline in the national average. And they still were served in college. 
They just didn't take out too much excess debt.
  Through this bill, we hope to expand upon what institutions like 
Indiana University are doing and reform the current guidelines to 
require annual counseling for student borrowers, and ensure that 
students are empowered with the information they need to take control 
of their financial futures.
  I encourage my colleagues, and I appreciate the bipartisan support, 
and particularly my friend from Oregon, for working together, and I 
encourage my colleagues to support this meaningful legislation so we 
can arm students with the financial knowledge needed and help lower 
their debt burdens.
  Ms. BONAMICI. Madam Chair, I am pleased to yield 3 minutes to the 
gentlewoman from Arizona (Ms. Sinema), a champion for access to higher 
education.
  Ms. SINEMA. Madam Chair, I thank Chairman Kline, Ranking Member 
Miller, and Representative Bonamici for working together to find common 
ground on this bipartisan legislation, and I rise in support of H.R. 
4984.
  This legislation enacts commonsense safeguards and reforms to make 
financial counseling more effective for students and their families. 
Specifically, this legislation ensures that student loan recipients 
receive comprehensive information on an annual basis, detailing the 
terms and conditions, as well as the individual responsibilities 
throughout the life of their loans.
  As an adjunct professor at Arizona State University, I frequently 
hear from my students about how difficult it is to effectively manage 
their student loans. One year ago, I brought stories from my own 
Arizona State University students to the House floor to demonstrate how 
student debt impacts their futures and our community.
  One former student in my district, Brandy, faces over $100,000 in 
student debt. While this legislation will make it easier for her to 
understand the terms of her loan, we shouldn't fool ourselves, because 
this legislation will not make repaying her loan any easier, it won't 
provide relief from rising interest rates, and it doesn't take 
meaningful steps to address the skyrocketing cost of higher education. 
So together, we must do more here in Congress to create quality, higher 
education opportunities for America's students.
  So while this legislation is no substitute for a full reauthorization 
of the Higher Education Act, it is a good step forward. It doesn't yet 
provide a meaningful solution that addresses the rising cost of 
college, but it is very important that we stand today and make the 
important start to ensure students are fully informed about their loans 
and student debt.
  I relied on Pell grants, academic scholarships, and Federal loans all 
through my schooling, just like my Arizona State University students do 
today. I know that students need guidance and assistance to manage 
their student debt.
  I talk to young people who are excited to share their ideas and 
thoughts with me about how to solve some of our world's biggest 
problems, but it concerns me when I see these same young students are 
daunted by the prospect of an expensive education that they want but 
fear they can't afford.
  Rising college costs are putting higher education and the American 
dream out of reach for too many hardworking American families. 
Education is the key to economic growth, job creation, and for many, a 
clear pathway out of poverty. I know this because education was the key 
to my own path from poverty to the middle class. So I urge my 
colleagues to pass this legislation and continue working together to 
make college affordable for Arizona students.
  I thank the gentlewoman from Oregon (Ms. Bonamici) for yielding and 
for her hard work.
  Mr. KLINE. I reserve the balance of my time.
  Ms. BONAMICI. Madam Chair, I am pleased to yield 2 minutes to the 
gentleman from New York (Mr. Bishop), a colleague from the Education 
and the Workforce Committee.
  Mr. BISHOP of New York. Madam Chair, I thank my colleague for 
yielding.
  I rise in support of H.R. 4984, and I want to commend Congressman 
Guthrie and Congresswoman Bonamici for their efforts in bringing this 
bill first to our committee and now to the floor, and I particularly 
want to commend the bipartisan nature with which this legislation has 
been developed. Hopefully it will pass today with the same support that 
it passed out of the Education Committee.
  My other hope is that we can take this same bipartisan spirit that 
attends this legislation and apply it to the really, really important 
work that we have before us with respect to higher education and 
reauthorizing the Higher Ed Act, and that is specifically seeing to it 
that collectively we work together to see to it that the student 
financial aid programs embodied in title IV of the Higher Ed Act are 
reauthorized and, in fact, strengthened, and that they remain as robust 
as they need to be to ensure that students continue to have access to 
the educational institutions of their choice.
  Frankly, title IV is in peril. I hope we can work on that. And let me 
be specific about at least one program in title IV, and that is the 
Perkins Loan Program. We have had the Perkins Loan Program since 1958. 
It was passed in the wake of America's shock that we were beaten into 
space by the Russians, and so there was an effort to make it easier for 
the young men and women of this country to pursue higher education. 
That goal, by the way, and that need that existed in 1958 still exists 
today. And yet under current law, if we do not act, the 2015-2016 
academic year will be the last year that the Perkins loan will be in 
existence.
  Our students across the country borrow $1.4 billion a year.
  The CHAIR. The time of the gentleman has expired.
  Ms. BONAMICI. I yield an additional 1 minute to the gentleman from 
New York (Mr. Bishop).
  Mr. BISHOP of New York. I thank the gentlelady for yielding.
  So $1.4 billion a year will be taken out of the student aid portfolio 
at a time when students can least afford for that to happen. Given 
declining incomes and rising colleges costs, students are caught in a 
squeeze where they are unable to meet the expenses that a higher 
education demands. We simply cannot let this happen, and I very much 
hope that again on a bipartisan basis we can renew not just this 
program, but we can also overcome what appears to be a policy directive 
of our friends on the other side to squeeze the student financial aid 
programs.

                              {time}  1300

  The budget resolution that passed the House of Representatives 
freezes

[[Page H6761]]

Pell grants at $5,700 for the next 10 years. That means, 10 years from 
now, if that were to ever take on the force of law, the buying power of 
the Pell grant will be severely diminished.
  That same budget resolution essentially eliminates the SEOG program 
and puts enormous restrictions on the college workstudy program. These 
are programs that are absolutely essential to a student's ability to 
finance their education. I very much hope we can work together to see 
to it that they remain as robust as they need to be.
  Mr. KLINE. Madam Chair, we have no further speakers on this side, and 
I am prepared to close, so I reserve the balance of my time.
  Ms. BONAMICI. Madam Chair, H.R. 4984, the Empowering Students Through 
Enhanced Financial Counseling Act, will give student loan borrowers a 
much better understanding of their road to repayment. It does this by 
helping students track the amount they borrowed, predict monthly 
payments, and access affordable repayment plans.
  As I mentioned, this bill is not a cure-all for the problems student 
loan borrowers face, which include rising tuition and opaque servicing 
contracts, but the bill serves a very important purpose, and it is 
especially important because of the cost of college and the challenges 
of managing student debt.
  Greater transparency about what it means to borrow student loans will 
help students anticipate their obligations and advocate for their 
rights as borrowers, and perhaps greater transparency will elevate the 
conversation about the underlying need to address college costs.
  Again, I want to thank Chairman Kline, Ranking Member Miller, and 
Representative Guthrie for their bipartisan effort on this important 
bill. It has been delightful to work with them. I look forward to more 
bipartisanship in the Education and the Workforce Committee.
  I ask all of my colleagues to join me in supporting H.R. 4984, and I 
yield back the balance of my time.
  Mr. KLINE. Madam Chair, I yield myself such time as I may consume.
  Again, I want to thank my colleagues from the committee, the 
principal authors of this bill--Ms. Bonamici, Mr. Hudson, and Mr. 
Guthrie--for their fine work here and for the spirit of enthusiasm and 
bipartisanship which they have brought to this effort.
  I would remind all of my colleagues, as we move forward towards 
reauthorizing the Higher Education Act, this is absolutely not the 
whole thing, but it is another important step down that road.
  I urge my colleagues to support this important legislation, and I 
yield back the balance of my time.
  The CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule.
  In lieu of the amendment in the nature of a substitute recommended by 
the Committee on Education and the Workforce, printed in the bill, it 
shall be in order to consider as an original bill for the purpose of 
the amendment under the 5-minute rule an amendment in the nature of a 
substitute consisting of the text of the Rules Committee Print 113-53. 
That amendment in the nature of a substitute shall be considered as 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

                               H.R. 4984

       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 ``Empowering Students Through 
     Enhanced Financial Counseling Act''.

     SEC. 2. ANNUAL COUNSELING.

       Section 485(l) of the Higher Education Act of 1965 (20 
     U.S.C. 1092(l)) is amended to read as follows:
       ``(l) Annual Financial Aid Counseling.--
       ``(1) Annual disclosure required.--
       ``(A) In general.--Each eligible institution shall ensure 
     that each individual who receives a Federal Pell Grant or a 
     loan made under part D (other than a Federal Direct 
     Consolidation Loan) receives comprehensive information on the 
     terms and conditions of such Federal Pell Grant or loan and 
     the responsibilities the individual has with respect to such 
     Federal Pell Grant or loan. Such information shall be 
     provided, for each award year for which the individual 
     receives such Federal Pell Grant or loan, in a simple and 
     understandable manner--
       ``(i) during a counseling session conducted in person;
       ``(ii) online, with the borrower acknowledging receipt of 
     the information; or
       ``(iii) through the use of the online counseling tool 
     described in subsection (n)(1)(B).
       ``(B) Use of interactive programs.--In the case of 
     institutions not using the online counseling tool described 
     in subsection (n)(1)(B), the Secretary shall require such 
     institutions to carry out the requirements of subparagraph 
     (A) through the use of interactive programs, during an annual 
     counseling session that is in-person or online, that test the 
     individual's understanding of the terms and conditions of the 
     Federal Pell Grant or loan awarded to the student, using 
     simple and understandable language and clear formatting.
       ``(2) All individuals.--The information to be provided 
     under paragraph (1)(A) to each individual receiving 
     counseling under this subsection shall include the following:
       ``(A) An explanation of how the student may budget for 
     typical educational expenses and a sample budget based on the 
     cost of attendance for the institution.
       ``(B) An explanation that an individual has a right to 
     annually request a disclosure of information collected by a 
     consumer reporting agency pursuant to section 612(a) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681j(a)).
       ``(3) Students receiving federal pell grants.--The 
     information to be provided under paragraph (1)(A) to each 
     student receiving a Federal Pell Grant shall include the 
     following:
       ``(A) An explanation of the terms and conditions of the 
     Federal Pell Grant.
       ``(B) An explanation of approved educational expenses for 
     which the student may use the Federal Pell Grant.
       ``(C) An explanation of why the student may have to repay 
     the Federal Pell Grant.
       ``(D) An explanation of the maximum number of semesters or 
     equivalent for which the student may be eligible to receive a 
     Federal Pell Grant, and a statement of the amount of time 
     remaining for which the student may be eligible to receive a 
     Federal Pell Grant.
       ``(E) An explanation of how the student may seek additional 
     financial assistance from the institution's financial aid 
     office due to a change in the student's financial 
     circumstances, and the contact information for such office.
       ``(4) Borrowers receiving loans made under part d (other 
     than parent plus loans).--The information to be provided 
     under paragraph (1)(A) to a borrower of a loan made under 
     part D (other than a Federal Direct PLUS Loan made on behalf 
     of a dependent student) shall include the following:
       ``(A) To the extent practicable, the effect of accepting 
     the loan to be disbursed on the eligibility of the borrower 
     for other forms of student financial assistance.
       ``(B) An explanation of the use of the master promissory 
     note.
       ``(C) An explanation that the borrower is not required to 
     accept the full amount of the loan offered to the borrower.
       ``(D) An explanation that the borrower should consider 
     accepting any grant, scholarship, or State or Federal work-
     study jobs for which the borrower is eligible prior to 
     accepting Federal student loans.
       ``(E) A recommendation to the borrower to exhaust the 
     borrower's Federal student loan options prior to taking out 
     private loans, an explanation that Federal student loans 
     typically offer better terms and conditions than private 
     loans, and an explanation that if a borrower decides to take 
     out a private education loan--
       ``(i) the borrower has the ability to select a private 
     educational lender of the borrower's choice;
       ``(ii) the proposed private education loan may impact the 
     borrower's potential eligibility for other financial 
     assistance, including Federal financial assistance under this 
     title; and
       ``(iii) the borrower has a right--

       ``(I) to accept the terms of the private education loan 
     within 30 calendar days following the date on which the 
     application for such loan is approved and the borrower 
     receives the required disclosure documents, pursuant to 
     section 128(e)(6) of the Truth in Lending Act; and
       ``(II) to cancel such loan within 3 business days of the 
     date on which the loan is consummated, pursuant to section 
     128(e)(7) of such Act.

       ``(F) An explanation of the approved educational expenses 
     for which the borrower may use a loan made under part D.
       ``(G) Information on the annual and aggregate loan limits 
     for Federal Direct Stafford Loans and Federal Direct 
     Unsubsidized Stafford Loans.
       ``(H) Information on how interest accrues and is 
     capitalized during periods when the interest is not paid by 
     either the borrower or the Secretary.
       ``(I) In the case of a Federal Direct PLUS Loan or a 
     Federal Direct Unsubsidized Stafford Loan, the option of the 
     borrower to pay the interest while the borrower is in school.
       ``(J) The definition of half-time enrollment at the 
     institution, during regular terms and summer school, if 
     applicable, and the consequences of not maintaining at least 
     half-time enrollment.
       ``(K) An explanation of the importance of contacting the 
     appropriate offices at the institution of higher education if 
     the borrower withdraws prior to completing the borrower's 
     program of study so that the institution can provide exit 
     counseling, including information regarding the borrower's 
     repayment options and loan consolidation.
       ``(L) For a first-time borrower, the anticipated monthly 
     payment amount under, at minimum, a standard repayment plan 
     and, using the regionally available data from the Bureau of 
     Labor Statistics of the average starting salary for the 
     occupation the borrower intends to be employed, an income-
     based repayment plan under section 493C, and based on--

[[Page H6762]]

       ``(i) a range of levels of indebtedness of--

       ``(I) borrowers of Federal Direct Stafford Loans or Federal 
     Direct Unsubsidized Stafford Loans; and
       ``(II) as appropriate, graduate borrowers of Federal Direct 
     PLUS Loans or Federal Direct Unsubsidized Stafford Loans; or

       ``(ii) the average cumulative indebtedness at graduation 
     for students who borrowed loans made under part D and who are 
     in the same program of study as the borrower.
       ``(M) For a borrower with an outstanding balance of 
     principal or interest due on a loan made under this title--
       ``(i) a current statement of the amount of such outstanding 
     balance and interest accrued;
       ``(ii) based on such outstanding balance, the anticipated 
     monthly payment amount under, at minimum, the standard 
     repayment plan and, using regionally available data from the 
     Bureau of Labor Statistics of the average starting salary for 
     the occupation the borrower intends to be employed, an 
     income-based repayment plan under section 493C; and
       ``(iii) an estimate of the projected monthly payment amount 
     under each repayment plan described in clause (ii), based 
     on--

       ``(I) the outstanding balance described in clause (i);
       ``(II) the anticipated outstanding balance on the loan for 
     which the student is receiving counseling under this 
     subsection; and
       ``(III) a projection for any other loans made under part D 
     that the borrower is reasonably expected to accept during the 
     borrower's program of study based on at least the expected 
     increase in the cost of attendance of such program.

       ``(N) The obligation of the borrower to repay the full 
     amount of the loan, regardless of whether the borrower 
     completes or does not complete the program in which the 
     borrower is enrolled within the regular time for program 
     completion.
       ``(O) The likely consequences of default on the loan, 
     including adverse credit reports, delinquent debt collection 
     procedures under Federal law, and litigation, and a notice of 
     the institution's most recent cohort default rate (defined in 
     section 435(m)), an explanation of the cohort default rate, 
     and the most recent national average cohort default rate for 
     the category of institution described in section 435(m)(4) to 
     which the institution belongs.
       ``(P) Information on the National Student Loan Data System 
     and how the borrower can access the borrower's records.
       ``(Q) The contact information for the institution's 
     financial aid office or other appropriate office at the 
     institution the borrower may contact if the borrower has any 
     questions about the borrower's rights and responsibilities or 
     the terms and conditions of the loan.
       ``(5) Borrowers receiving parent plus loans for dependent 
     students.--The information to be provided under paragraph 
     (1)(A) to a borrower of a Federal Direct PLUS Loan made on 
     behalf of a dependent student shall include the following:
       ``(A) The information described in subparagraphs (A) 
     through (C) and (N) through (Q) of paragraph (4).
       ``(B) The option of the borrower to pay the interest on the 
     loan while the loan is in deferment.
       ``(C) For a first-time borrower of such loan, sample 
     monthly repayment amounts under the standard repayment plan 
     based on--
       ``(i) a range of levels of indebtedness of borrowers of 
     Federal Direct PLUS Loans made on behalf of a dependent 
     student; or
       ``(ii) the average cumulative indebtedness of other 
     borrowers of Federal Direct PLUS Loans made on behalf of 
     dependent students who are in the same program of study as 
     the student on whose behalf the borrower borrowed the loan.
       ``(D) For a borrower with an outstanding balance of 
     principal or interest due on such loan--
       ``(i) a statement of the amount of such outstanding 
     balance;
       ``(ii) based on such outstanding balance, the anticipated 
     monthly payment amount under the standard repayment plan; and
       ``(iii) an estimate of the projected monthly payment amount 
     under the standard repayment plan, based on--

       ``(I) the outstanding balance described in clause (i);
       ``(II) the anticipated outstanding balance on the loan for 
     which the borrower is receiving counseling under this 
     subsection; and
       ``(III) a projection for any other Federal Direct PLUS Loan 
     made on behalf of the dependent student that the borrower is 
     reasonably expected to accept during the program of study of 
     such student based on at least the expected increase in the 
     cost of attendance of such program.

       ``(E) Debt management strategies that are designed to 
     facilitate the repayment of such indebtedness.
       ``(F) An explanation that the borrower has the options to 
     prepay each loan, pay each loan on a shorter schedule, and 
     change repayment plans.
       ``(G) For each Federal Direct PLUS Loan made on behalf of a 
     dependent student for which the borrower is receiving 
     counseling under this subsection, the contact information for 
     the loan servicer of the loan and a link to such servicer's 
     Website.
       ``(6) Annual loan acceptance.--Prior to making the first 
     disbursement of a loan made under part D (other than a 
     Federal Direct Consolidation Loan) to a borrower for an award 
     year, an eligible institution, shall, as part of carrying out 
     the counseling requirements of this subsection for the loan, 
     ensure that the borrower accepts the loan for such award year 
     by--
       ``(A) signing the master promissory note for the loan;
       ``(B) signing and returning to the institution a separate 
     written statement that affirmatively states that the borrower 
     accepts the loan; or
       ``(C) electronically signing an electronic version of the 
     statement described in subparagraph (B).''.

     SEC. 3. EXIT COUNSELING.

       Section 485(b) of the Higher Education Act of 1965 (20 
     U.S.C. 1092(b)) is amended--
       (1) in paragraph (1)(A)--
       (A) in the matter preceding clause (i), by striking 
     ``through financial aid offices or otherwise'' and inserting 
     ``through the use of an interactive program, during an exit 
     counseling session that is in-person or online, or through 
     the use of the online counseling tool described in subsection 
     (n)(1)(A)'';
       (B) by redesignating clauses (i) through (ix) as clauses 
     (iv) through (xii), respectively;
       (C) by inserting before clause (iv), as so redesignated, 
     the following:
       ``(i) a summary of the outstanding balance of principal and 
     interest due on the loans made to the borrower under part B, 
     D, or E;
       ``(ii) an explanation of the grace period preceding 
     repayment and the expected date that the borrower will enter 
     repayment;
       ``(iii) an explanation that the borrower has the option to 
     pay any interest that has accrued while the borrower was in 
     school or that may accrue during the grace period preceding 
     repayment or during an authorized period of deferment or 
     forbearance, prior to the capitalization of the interest;'';
       (D) in clause (iv), as so redesignated--
       (i) by striking ``sample information showing the average'' 
     and inserting ``information, based on the borrower's 
     outstanding balance described in clause (i), showing the 
     borrower's''; and
       (ii) by striking ``of each plan'' and inserting ``of at 
     least the standard repayment plan and the income-based 
     repayment plan under section 493C'';
       (E) in clause (x), as so redesignated, by striking 
     ``consolidation loan under section 428C or a'';
       (F) in clauses (xi) and (xii), as so redesignated, by 
     striking ``and'' at the end; and
       (G) by adding at the end the following:
       ``(xiii) for each of the borrower's loans made under part 
     B, D, or E for which the borrower is receiving counseling 
     under this subsection, the contact information for the loan 
     servicer of the loan and a link to such servicer's Website; 
     and
       ``(xiv) an explanation that an individual has a right to 
     annually request a disclosure of information collected by a 
     consumer reporting agency pursuant to section 612(a) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681j(a)).'';
       (2) in paragraph (1)(B)--
       (A) by inserting ``online or'' before ``in writing''; and
       (B) by adding before the period at the end the following: 
     ``, except that in the case of an institution using the 
     online counseling tool described in subsection (n)(1)(A), the 
     Secretary shall attempt to provide such information to the 
     student in the manner described in subsection (n)(3)(C)''; 
     and
       (3) in paragraph (2)(C), by inserting ``, such as the 
     online counseling tool described in subsection (n)(1)(A),'' 
     after ``electronic means''.

     SEC. 4. ONLINE COUNSELING TOOLS.

       Section 485 of the Higher Education Act of 1965 (20 U.S.C. 
     1092) is further amended by adding at the end the following:
       ``(n) Online Counseling Tools.--
       ``(1) In general.--Beginning not later than 1 year after 
     the date of enactment of the Empowering Students Through 
     Enhanced Financial Counseling Act, the Secretary shall 
     maintain--
       ``(A) an online counseling tool that provides the exit 
     counseling required under subsection (b) and meets the 
     applicable requirements of this subsection; and
       ``(B) an online counseling tool that provides the annual 
     counseling required under subsection (l) and meets the 
     applicable requirements of this subsection.
       ``(2) Requirements of tools.--In maintaining the online 
     counseling tools described in paragraph (1), the Secretary 
     shall ensure that each such tool is--
       ``(A) consumer tested, in consultation with other relevant 
     Federal agencies, to ensure that the tool is effective in 
     helping individuals understand their rights and obligations 
     with respect to borrowing a loan made under part D or 
     receiving a Federal Pell Grant;
       ``(B) understandable to students receiving Federal Pell 
     Grants and borrowers of loans made under part D; and
       ``(C) freely available to all eligible institutions.
       ``(3) Record of counseling completion.--The Secretary 
     shall--
       ``(A) use each online counseling tool described in 
     paragraph (1) to keep a record of which individuals have 
     received counseling using the tool, and notify the applicable 
     institutions of the individual's completion of such 
     counseling;
       ``(B) in the case of a borrower who receives annual 
     counseling for a loan made under part D using the tool 
     described in paragraph (1)(B), notify the borrower by when 
     the borrower should accept, in a manner described in section 
     485(l)(6), the loan for which the borrower has received such 
     counseling; and
       ``(C) in the case of a borrower described in subsection 
     (b)(1)(B) at an institution that uses the online counseling 
     tool described in paragraph (1)(A) of this subsection, the 
     Secretary shall attempt to provide the information described 
     in subsection (b)(1)(A) to the borrower through such tool.''.

     SEC. 5. AVAILABILITY OF FUNDS.

       (a) Use of Existing Funds.--Of the amount authorized to be 
     appropriated for maintaining the Department of Education's 
     Financial Awareness Counseling Tool, $2,000,000 shall be 
     available to carry out this Act and the amendments made by 
     this Act.
       (b) No Additional Funds Authorized.--No funds are 
     authorized to be appropriated by this

[[Page H6763]]

     Act to carry out this Act or the amendments made by this Act.

  The CHAIR. No amendment to that amendment in the nature of a 
substitute shall be in order except those printed in part B of House 
Report 113-546. Each such amendment may be offered only in the order 
printed in the report, by a Member designated in the report, shall be 
considered as read, shall be debatable for the time specified in the 
report equally divided and controlled by the proponent and an opponent, 
shall not be subject to amendment, and shall not be subject to a demand 
for division of the question.


                  Amendment No. 1 Offered by Mr. Kline

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
part B of House Report 113-546.
  Mr. KLINE. Madam Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 2, line 7, strike ``borrower'' and insert 
     ``individual''.
       Beginning page 7, line 12, amend subparagraph (L) to read 
     as follows:
       ``(L) For a first-time borrower--
       ``(i) a statement of the anticipated balance on the loan 
     for which the borrower is receiving counseling under this 
     subsection;
       ``(ii) based on such anticipated balance, the anticipated 
     monthly payment amount under, at minimum--

       ``(I) the standard repayment plan; and
       ``(II) an income-based repayment plan under section 493C, 
     as determined using regionally available data from the Bureau 
     of Labor Statistics of the average starting salary for the 
     occupation in which the borrower has an interest in or 
     intends to be employed; and

       ``(iii) an estimate of the projected monthly payment amount 
     under each repayment plan described in clause (ii), based on 
     the average cumulative indebtedness at graduation for 
     borrowers of loans made under part D who are in the same 
     program of study as the borrower.''.
       Page 11, beginning line 7, amend subparagraph (C) to read 
     as follows:
       ``(C) For a first-time borrower of such loan--
       ``(i) a statement of the anticipated balance on the loan 
     for which the borrower is receiving counseling under this 
     subsection;
       ``(ii) based on such anticipated balance, the anticipated 
     monthly payment amount under the standard repayment plan; and
       ``(iii) an estimate of the projected monthly payment amount 
     under the standard repayment plan, based on the average 
     cumulative indebtedness of other borrowers of Federal Direct 
     PLUS Loans made on behalf of dependent students who are in 
     the same program of study as the student on whose behalf the 
     borrower borrowed the loan.''.
       Page 13, line 17, insert ``after receiving the applicable 
     counseling under paragraphs (2), (4), and (5) for the loan'' 
     after ``ensure that''.
       Page 19, beginning line 1, redesignate section 5 as section 
     6.
       Page 18, after line 24, insert the following:

     SEC. 5. LONGITUDINAL STUDY ON THE EFFECTIVENESS OF STUDENT 
                   LOAN COUNSELING.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Education, acting 
     through the Director of the Institute of Education Sciences, 
     shall begin conducting a rigorous, longitudinal study of the 
     impact and effectiveness of the student loan counseling--
       (1) provided under subsections (b), (l), and (n) of section 
     485 of the Higher Education Act of 1965 (20 U.S.C. 1092), as 
     amended by this Act; and
       (2) provided through such other means as the Secretary of 
     Education may determine.
       (b) Contents.--
       (1) Borrower information.--The longitudinal study carried 
     out under subsection (a) shall include borrower information, 
     in the aggregate and disaggregated by race, ethnicity, 
     gender, income, and status as an individual with a 
     disability, on--
       (A) student persistence;
       (B) degree attainment;
       (C) program completion;
       (D) successful entry into student loan repayment;
       (E) cumulative borrowing levels; and
       (F) such other factors as the Secretary of Education may 
     determine.
       (2) Exception.--The disaggregation under paragraph (1) 
     shall not be required in a case in which the number of 
     borrowers in a category is insufficient to yield 
     statistically reliable information or the results would 
     reveal personally identifiable information about an 
     individual borrower.
       (c) Interim Reports.--Not later than 18 months after the 
     commencement of the study under subsection (a), and annually 
     thereafter, the Secretary of Education shall evaluate the 
     progress of the study and report any short-term findings to 
     the appropriate committees of Congress.

  The CHAIR. Pursuant to House Resolution 677, the gentleman from 
Minnesota (Mr. Kline) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Minnesota.
  Mr. KLINE. Madam Chair, I rise in support of the manager's amendment. 
This amendment is brought forth in close cooperation with the ranking 
member of the committee, my friend George Miller.
  This amendment will improve the information provided to first-time 
student loan borrowers and clarify that borrowers must accept their 
loans annually after they have completed their counseling.
  The amendment will also require the Director of the Institute of 
Education Sciences to collect a study of the impact and effectiveness 
of the student loan counseling required under this act.
  This amendment ensures borrowers are getting the information they 
need prior to making their final decisions on how to pay for their 
college education. It also ensures policymakers have information on how 
well financial aid counseling is working to prevent overborrowing and 
what can be improved to make it even more effective.
  The underlying bill, which received unanimous support coming out of 
the committee, will deliver students and parents the tools and 
information they need to borrow and repay their student loans in a 
responsible way. This amendment improves the bill.
  I urge my colleagues to support this amendment, and I reserve the 
balance of my time.
  Ms. BONAMICI. Madam Chair, I rise in opposition to this amendment, 
but I do not oppose the amendment.
  The CHAIR. Without objection, the gentlewoman from Oregon is 
recognized for 5 minutes.
  There was no objection.
  Ms. BONAMICI. Madam Chair, the manager's amendment, which I support 
and encourage my colleagues to support, helps bolster counseling for 
first-time borrowers, so that they are fully aware of the financing 
they may be required to use over their entire college education.
  The manager's amendment also ensures that students needing to borrow 
a student loan receive counseling before they sign the master 
promissory note.
  I am also pleased that this manager's amendment includes my proposal 
for the Department of Education to do a comprehensive, longitudinal 
study on the impact and effectiveness of current student loan 
counseling practices, so we know what actually works.
  We owe it to student loan borrowers and higher education institutions 
to find out if the counseling requirements affect borrowers' 
understanding and their decisions.
  In particular, we need to know if the programs we create in Congress 
improve outcomes for students. Will enhanced financial counseling help 
more students earn degrees, borrow less, and successfully enter 
repayment? We need to know if these outcomes benefit equally students 
of different races, ethnicities, genders, and income levels.
  I urge my colleagues to vote ``yes'' on this bipartisan manager's 
amendment, so that students can have more and better and high-quality 
information about their student loans.
  Madam Chair, I yield back the balance of my time.
  Mr. KLINE. Madam Chair, I thank the gentlewoman from Oregon for her 
support of this amendment. She is a principal author of the underlying 
legislation and her support of this amendment is very, very helpful.
  I urge all my colleagues to support this amendment and the underlying 
bill, and I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Minnesota (Mr. Kline).
  The amendment was agreed to.


                 Amendment No. 2 Offered by Mr. Kilmer

  The CHAIR. It is now in order to consider amendment No. 2 printed in 
part B of House Report 113-546.
  Mr. KILMER. Madam Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 3, after line 11, insert the following:
       ``(C) An introduction to the financial management resources 
     provided by the Financial Literacy and Education Commission.

  The CHAIR. Pursuant to House Resolution 677, the gentleman from 
Washington (Mr. Kilmer) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Washington.

[[Page H6764]]

  Mr. KILMER. Madam Chair, I yield myself such time as I may consume.
  I rise today as someone who went to college with the help of grants 
and loans and the support of a family and a community that had my back. 
It is in that spirit that I rise today to offer an amendment designed 
to help students and borrowers get access to more information about 
sound financial practices.
  We know that financial literacy is important. It helps provide people 
with a roadmap for making sound financial decisions, to avoid or get 
out of debt, to prepare for emergencies, and to save for a brighter 
future.
  Studies have found that 20-somethings have an average debt of 
$45,000, primarily from student loans, but also from car loans, 
mortgages, and credit card debt. When the Organization for Economic 
Cooperation and Development provided an international financial 
literacy test, American students ranked below average.
  We need to do more to promote financial literacy, and it is 
particularly important that students who are getting federally-
supported loans are getting the tools that they need to keep their 
finances on track.
  We need to support resources that teach students financial literacy 
and provide them with the tools that they need to improve 
decisionmaking and strengthen their household budgets. Helping more 
students shore up their financial management skills also has a direct 
impact on the economic and financial stability of our country.
  Congress took a critical step forward in providing these resources by 
creating the Financial Literacy and Education Commission as part of the 
Fair and Accurate Credit Transaction Act of 2003, legislation that 
passed the House with overwhelmingly bipartisan support and was signed 
into law by President George W. Bush.
  The Financial Literacy and Education Commission developed resources 
that help consumers better understand financial products. It offers 
guidance on how to financially prepare for and respond to major life 
events, and it gives tips on savings and borrowing and deterring fraud.
  The amendment that I offer today would direct universities and the 
Department of Education to provide students with information about the 
financial management resources provided by the Financial Literacy and 
Education Commission.
  For many students, a student loan is the first loan of their lives. 
As students consider the financial assistance that they need to get a 
decent education, it is critically important that they have the 
information they need to responsibly manage their finances.
  I particularly want to applaud the ongoing work and leadership in 
promoting financial literacy by the cochairs of the House Financial and 
Economic Literacy Caucus, including Representative Hinojosa, who has 
been a strong advocate of financial literacy initiatives and played a 
critical role in creating this commission.
  I am also pleased to be joined by my colleague from Alabama (Mr. 
Bachus), who sponsored this legislation that helped create this 
commission.
  I reserve the balance of my time.
  Mr. BACHUS. Madam Chair, I claim the time in opposition, although I 
am not opposed.
  The CHAIR. Without objection, the gentleman from Alabama is 
recognized for 5 minutes.
  There was no objection.
  Mr. BACHUS. Madam Chair, I want to commend the gentleman from 
Washington (Mr. Kilmer) for what I consider a straightforward, 
commonsense amendment.
  This is an amendment to the Fair and Accurate Credit Transaction Act, 
what we commonly call the FACT Act. The FACT Act is known for a free 
credit report and the requirement on the three main credit reporting 
agencies to amend their records.
  If you notify one of an error, they have to make an examination and 
then correct it. Financial literacy was also an important part of the 
FACT Act because you have your credit report, but if you don't have 
good financial literacy, it is not going to be a good credit report.
  In 2003, the subcommittee--which I chaired at that time--passed this 
in the full committee, and we had bipartisan support. Judy Biggert--who 
is no longer with us--from Illinois, I think, was one of the leaders on 
our side, but there were many on both sides.
  A commission was formed without almost any cost to the people, and it 
did a lot of good research on financial literacy, how to avoid bad 
financial decisions, debt load, what different financial products were 
there, where to turn in case of an emergency. It is called mymoney.gov. 
It is an excellent resource.
  What we found--and Mr. Kilmer did a lot of work on this and Mr. 
Hinojosa and others--is that people are not utilizing that and that 
colleges and universities, when students apply for loans, they are not 
directing them to that site, which can actually save them money 
upfront. So what this does is it engages the colleges and universities 
and simply encourages them to have their students take advantage of 
them.
  Particularly, there is an urgency today because we often hear that 
students are leaving school with high debt loads, and hopefully, as a 
result of this amendment and other steps that are being taken in this 
important legislation overall, students in the future can avoid some of 
the mistakes and not graduate with such a heavy debt load.
  It is refreshing to have a bipartisan measure, and I reserve the 
balance of my time.
  Mr. KILMER. Madam Chair, I yield 1 minute to the gentlewoman from 
Oregon (Ms. Bonamici).
  Ms. BONAMICI. Madam Chair, I thank Mr. Kilmer for yielding.
  I rise in support of the Kilmer-Hinojosa-Bachus-Petri-Tsongas 
amendment. This amendment will ensure that students are aware of 
important consumer information tools of the Financial Literacy and 
Education Commission created by the Treasury.

                              {time}  1315

  We know that students often lack basic financial literacy, which 
makes it hard for them to make thoughtful decisions on complex 
financial products. Financial institutions may be providing information 
that is designed to steer young people into accounts that may not be 
best for them.
  Providing important consumer information in an unbiased way can 
increase financial literacy of students and may help reduce college 
costs. That is exactly what this amendment accomplishes.
  I urge my colleagues to vote ``yes'' on this amendment so students 
can be equipped with better and more comprehensive financial literacy 
tools.
  Mr. BACHUS. Madam Chair, I would simply recognize Mr. Petri's and Ms. 
Tsongas' contributions in helping Mr. Kilmer with this amendment--and 
there may be others.
  I want to express to the full committee chair our appreciation for 
supporting this amendment, and I yield back the balance of my time.
  Mr. KILMER. Madam Chair, I just want to close by thanking Mr. Bachus 
not just for his support of this amendment, but for his career of work 
on behalf of financial literacy, and not just working on behalf of our 
students, but all of our families.
  I also want to thank the rest of my fellow cosponsors of the 
underlying bill, as well as the chairman and the ranking member and 
their staffs for working with me on this amendment.
  As someone who couldn't have gone to college without the assistance 
of financial aid, I am hopeful that this will take a meaningful step 
toward providing young people with tools that they need to live 
financially responsible lives.
  With that, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Washington (Mr. Kilmer).
  The question was taken; and the Chair announced that the ayes 
appeared to have it.
  Mr. KILMER. Madam Chair, I demand a recorded vote.
  The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on 
the amendment offered by the gentleman from Washington will be 
postponed.


            Amendment No. 3 Offered by Mr. Murphy of Florida

  The CHAIR. It is now in order to consider amendment No. 3 printed in 
part B of House Report 113-546.
  Mr. MURPHY of Florida. Madam Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.

[[Page H6765]]

  The text of the amendment is as follows:

       Page 3, after line 11, insert the following:
       ``(C) Based on the most recent data available from the 
     American Community Survey available from the Department of 
     Commerce, the estimated average income and percentage of 
     employment in the State of domicile of the borrower for 
     persons with--
       ``(i) a high school diploma or equivalent;
       ``(ii) some post-secondary education without completion of 
     a degree or certificate; and
       ``(iii) a bachelor's degree.

  The CHAIR. Pursuant to House Resolution 677, the gentleman from 
Florida (Mr. Murphy) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Florida.
  Mr. MURPHY of Florida. Madam Chair, I rise today to support giving 
students and families the resources needed to make informed decisions 
about both their education and their finances.
  I want to congratulate the gentleman from Kentucky (Mr. Guthrie) for 
his great work on this bill. I also want to thank the chairman, Mr. 
Kline, and Ranking Member Miller for working in a truly bipartisan 
process on this legislation to provide students with commonsense, 
personalized financial counseling about one of the greatest investments 
a student can make: their investment in their own education.
  I strongly support the underlying legislation and offer this 
amendment as a complement to better inform students about not only the 
costs, but the benefits of completing their education.
  With tuition rates quickly outpacing grants and scholarships, 
American students and their families increasingly rely on student loans 
to access higher education. Coupled with increased enrollment, student 
loan debt has ballooned to more than $1.2 trillion--greater than credit 
card debt, for the first time in history.
  Last summer, we came together to pass bipartisan legislation which 
decoupled student loan interest rates from the whims of Washington and 
provided students and families the certainty needed to make long-term 
plans for the future. The bill before us today continues that mission 
by giving students the information they need to understand the rights 
and responsibilities that come along with investing in their higher 
education.
  For many students, these loans are their first and often most costly 
experience as a borrower. Failing to provide students with the 
information they need to make responsible decisions and manage their 
debt does not just impact the delinquent borrower, but also the 
taxpayers.
  Similarly, having students understand both their monthly and lifetime 
costs of debt they are accruing will enlist students in the fight to 
get student loan debt under control.
  That said, despite mounting debt, a college degree is still generally 
one of the best investments students can make. For example, the average 
income for young adults with a bachelor's degree is just over $50,000, 
with only 4.9 percent unemployment. The dropoff for individuals who do 
not finish is steep, around $13,000 per year of income and a much 
higher unemployment rate of 7 percent.
  We do not want students failing to complete their degree simply 
because they fear taking out additional loans. That is why I am putting 
forward this reasonable amendment to improve the underlying legislation 
by simply adding the inclusion of income and employment data for 
different levels of educational attainment. This information would 
strengthen the counseling required by improving students' perspectives 
as they take charge of their future and their finances.
  Madam Chair, this major potential earnings reduction, combined with 
hefty student loans in repayment, is a recipe for financial disaster. 
That is why it is so important that students and families have the full 
picture when making decisions regarding investments in higher 
education, as the underlying bill offers.
  I urge my colleagues to support this simple yet important amendment 
to make sure students can make the best decision possible while 
understanding the full impact of student loans they take out.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Florida (Mr. Murphy).
  The amendment was agreed to.


      Amendment No. 4 Offered by Ms. Loretta Sanchez of California

  The CHAIR. It is now in order to consider amendment No. 4 printed in 
part B of House Report 113-546.
  Ms. LORETTA SANCHEZ of California. Madam Chairman, I have an 
amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 4, line 4, strike ``(E)'' and insert ``(F)''.
       Page 4, after line 3, insert the following:
       ``(E) An explanation that if the student transfers to 
     another institution not all of the student's courses may be 
     acceptable in transfer toward meeting specific degree or 
     program requirements at such institution, but the amount of 
     time remaining for which a student may be eligible to receive 
     a Federal Pell Grant, as provided under subparagraph (D), 
     will not change.''.

  The CHAIR. Pursuant to House Resolution 677, the gentlewoman from 
California (Ms. Loretta Sanchez) and a Member opposed each will control 
5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. LORETTA SANCHEZ of California. Madam Chair, I yield myself such 
time as I may consume.
  Madam Chair, we all know that higher education is a key to the ladder 
of success in the United States. It is one of the most important things 
that we can invest in. We just recently saw a study that showed that 
if, in fact, you have a 4-year degree, you are going to make 
significantly more than if you just graduated from high school. You can 
imagine that in today's world--at least where I live in California, the 
innovation State--a master's or a doctorate is really what you need to 
have.
  The value of a degree is very, very important, but we also see, of 
course, the student debt increasing. Students get out with their 
bachelor's degree, have a mound of debt, and then they are trying to 
get a master's, a Ph.D., or a profession. It is very, very difficult.
  One of the most vital programs that we have in the United States is 
the Pell grant program to help them. But let's face it, it is very 
difficult to understand all the ins and outs of how to get a Pell 
grant, how you use it, the purpose, how many units you can take, what 
you can't take, how long it can take you, et cetera, et cetera. So it 
is another burden that we are putting on the students and the families 
when they don't really get the good picture of how to use that program.
  My amendment would help spell out for students and families how that 
Pell grant would be used. It would simply require institutions to 
better counsel transfer students on their maximum Pell grant 
eligibility and the effect that it may have as a result of credits in 
courses that don't transfer to another institution.
  I know that, at least in California, when we look to go to the 
university, we usually say let's do the first year at the least 
expensive place to do it, and that would be our community college--
which, by the way, they are the gems of our community. They are doing 
incredible work.
  But sometimes when students using the Pell grant get there, they 
might have, for example, some remedial classes. They might have to 
brush up on their English or their math. In doing that, the Pell grant 
is being used up, and then those units don't transfer to that 4-year 
university they go to. So the student ends up miscalculating what it is 
really going to cost them to finish off their diploma.
  This amendment simply looks to make these types of obstacles obvious 
and transparent to possible transfer students so as to have the 
clearest view of their degree timelines and the impact on their 
financial aid.
  Let's ensure that students have the clearest information, that they 
get it upfront, and that they understand how they are going to get this 
done. In fact, a lot of these students are sometimes first-timers in 
their families who are trying to achieve a diploma from a university.
  We are still miles away from getting that achievement gap closed in 
many of our communities. I know we have been working on it for a long 
time now in Orange County, California, but this will be a little piece 
of trying to get that.

[[Page H6766]]

  While I am at it, I would like to thank Congressman Guthrie, 
Congressman Hudson, and Congresswoman Bonamici, who have, in good 
faith, championed the work on this bill. I still wish we could get to 
the Higher Education Act, but if we can't do that, this is a good first 
step.
  I reserve the balance of my time.
  Mr. KLINE. Madam Chair, I claim the time in opposition to the 
amendment, although I do not oppose the amendment.
  The CHAIR. Without objection, the gentleman from Minnesota is 
recognized for 5 minutes.
  There was no objection.
  Mr. KLINE. Madam Chair, I want to make the point that I am supporting 
all of the amendments offered today, but I wanted to take this 
opportunity with this particular amendment to thank the gentlewoman 
from California, because this amendment makes sure that these students 
in this confusing world that we are trying to help sort out get a clear 
explanation that their Pell grant eligibility is limited to 12 
semesters and it will not reset if they transfer.
  That is just an example of the kind of confusion that is out there, 
and it is one of the reasons that we insisted on putting counseling for 
Pell grant recipients, not just loan recipients, in the base bill. But 
her language brings absolute clarity to this issue. I thank her for 
that.
  I support this amendment and the other amendments, and I yield back 
the balance of my time.
  Ms. LORETTA SANCHEZ of California. Madam Chair, I ask my colleagues 
to vote for this amendment, and I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the 
gentlewoman from California (Ms. Linda Sanchez).
  The amendment was agreed to.


                  Amendment No. 5 Offered by Mr. Cohen

  The CHAIR. It is now in order to consider amendment No. 5 printed in 
part B of House Report 113-546.
  Mr. COHEN. Madam Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 5, line 10, insert at the end the following: ``an 
     explanation of treatment of loans made under part D and 
     private education loans in bankruptcy,''.

  The CHAIR. Pursuant to House Resolution 677, the gentleman from 
Tennessee (Mr. Cohen) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Tennessee.
  Mr. COHEN. Madam Chair, this amendment is very simple. It would add 
an explanation of how Federal and private student loans are treated in 
bankruptcy to the list of the disclosures contained in the underlying 
bill.
  Unfortunately, too many students lack basic financial literacy, and 
if they don't have a proper understanding of their rights and 
responsibilities when it comes to student loans, it can lead to serious 
consequences for their financial future.
  That is why I am pleased to support this legislation that Mr. Kline 
has offered--he has done such a good job bringing a bipartisan bill 
here--and the important financial counseling it requires.
  However, one area that is not included is an explanation of the 
stringent requirements we have placed when it comes to erasing your 
student loans in bankruptcy.
  While bankruptcy is never something to be taken lightly, our system 
does allow an honest but unfortunate debtor the opportunity for a fresh 
start if their financial situation is desperate enough. Most people 
assume that their student loans can be discharged along with their 
other consumer debts during bankruptcy proceedings, but that is not the 
case.

                              {time}  1330

  Under current law, borrowers must show that continuing to back their 
loans would impose an ``undue hardship'' on them and their dependents, 
a standard that, in practice, is nearly insurmountable. Bankruptcy law 
exempts very few types of debt from elimination through the bankruptcy 
process, but there are certain exceptions. For example, for principled 
policy reasons, we exempt child support, taxes, criminal fines, and 
intentional torts. In 1978, Congress added Federal student loans to 
this list.
  This protects Federal student loan programs--and the taxpayer dollars 
that fund them--from fraud and abuse by borrowers. This also makes 
sense because Federal loans offer certain protections to ease the 
burden on debtors, like fixed interest rates and opportunities for 
deferments, income-based repayments and forbearance; but in 2005, the 
Bankruptcy Protection Act was passed, and the bankruptcy protection was 
extended to private loans, which are not required to have and often do 
not have such consumer protections. In fact, private lenders often 
market directly to students, luring them into unaffordable loans that 
saddle them with debts for decades to come.
  That is why I have introduced legislation to remove the exemption for 
private student loans and why the Consumer Financial Protection Bureau 
has called for a study on whether bankruptcy rules for student loans 
should be modified. That, however, is not the issue here. The fact 
remains that this is the law, and students should be aware that their 
loans, both Federal and private, can only be discharged in bankruptcy 
in exceptional circumstances. That is why I propose this small 
refinement to the underlying legislation--to ensure that borrowers 
understand the hurdles they may face in wiping the slate clean.
  I thank Mr. Kline for allowing this and the Rules Committee for 
allowing this amendment to be made in order, and I urge my colleagues 
to support it.
  I reserve the balance of my time.
  Mr. KLINE. Madam Chair, I rise in opposition to the amendment, 
although I do not oppose the amendment.
  The CHAIR. Without objection, the gentleman from Minnesota is 
recognized for 5 minutes.
  There was no objection.
  Mr. KLINE. Madam Chair, I think, again, this amendment is 
underscoring the many issues that students and their parents and 
families are facing as they go into this postsecondary education 
adventure. Some of them, really, are coming off of jobs. The last thing 
they are thinking about is bankruptcy or the size of their loans. Most 
of them don't even know what bankruptcy is--or many of them don't know. 
Maybe they are a lot smarter than I was at that time.
  This amendment makes it clear that they understand the difference 
between the rules under a student loan--if they don't pay it or can't 
pay it--and under other loans. Without this sort of explanation, they 
wouldn't have any idea that their loans were not dischargeable in 
bankruptcy except, as the gentleman says, in some unusual 
circumstances.
  Again, that is why this sort of financial counseling early and often 
is going to be very careful, because this isn't a simple matter of 
taking out--we will use a car loan as an example with a set amount, a 
set interest--a set amount that you pay back for a set number of years. 
Folks understand how that works. But in having student loans merged 
with all sorts of other programs--workstudy programs and Pell grants 
and so forth--it is no wonder that students are graduating, stepping 
out and--oh, by the way--they can't find jobs because the economy is in 
so much trouble. They had such high expectations when they stepped into 
their college experiences or their postsecondary experiences, and then 
they came out and found out that the jobs weren't available, and they 
have this confusing mess that they have to deal with, and the last 
thing that they ever gave any thought to was this whole notion of 
bankruptcy.
  I thank the gentleman for his amendment, and I reserve the balance of 
my time.
  Mr. COHEN. Madam Chair, I thank Mr. Kline for his explanation and his 
support. He is upriver from us, but that is where the Mississippi River 
starts before it becomes so beautiful on the bluffs of the city of 
Memphis.
  I yield back the balance of my time.
  Mr. KLINE. Now I can't pass it up.
  Madam Chair, there is quite a bit of difference in the Mississippi 
River between the gentleman's district and Minnesota. In fact, you can 
step across the Mississippi River in Minnesota, and I don't think that 
is true--in fact, I am absolutely positive that it is not true--
anywhere else. It is always interesting when we have guests come to our 
great

[[Page H6767]]

State. When we ask them if they would like to step across the river, 
they are disbelieving until we take them up there to Itasca. Literally, 
it is no wider than this desk.
  I wish that trying to figure out one's student loans and grants and 
workstudies were as easy as getting across the Mississippi River.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Tennessee (Mr. Cohen).
  The amendment was agreed to.


                  Amendment No. 6 Offered by Ms. Hahn

  The CHAIR. It is now in order to consider amendment No. 6 printed in 
part B of House Report 113-546.
  Ms. HAHN. Madam Chairwoman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 10, line 5, strike ``and the'' and insert ``the most 
     recent national average cohort default rate, and the''.

  The CHAIR. Pursuant to House Resolution 677, the gentlewoman from 
California (Ms. Hahn) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. HAHN. Madam Chairwoman, I yield myself such time as I may 
consume.
  I am proud to support the legislation that we are considering today, 
and I applaud my colleagues on both sides of the aisle for coming 
together to work on this important bill.
  As we have been hearing, it is critical that we provide our Nation's 
students with the information they need to make informed decisions 
about what colleges they should attend and how they should pay for 
them.
  I think the authors of this bill did a great service by including a 
provision to provide students with information about the student loan 
default rate for the schools they plan to attend. However, I believe 
that this legislation does not provide the students with the national 
student loan default rate across all schools, making it harder for them 
to have an accurate understanding of where their prospective schools 
stand nationally.
  I have introduced a simple amendment to provide student loan 
borrowers with the latest national average default rate for all 
schools. If this amendment passes, all students, as they are applying 
for their student loans, will know what the default rate for student 
loans is at the schools they are choosing to attend versus the national 
default rate for student loans. I believe that this will allow students 
to better determine whether an institution has a record of delivering a 
quality education that is right for them. By providing students with 
more tools in their pursuits of education, students will be able to 
make more informed choices and save taxpayers the cost of more Federal 
student loans going into default.
  Students in my district and around the country know the burden of 
student loan debt all too well. Giving our students all of the 
information will give them a better chance of being able to repay their 
loans and build successful futures.
  Mr. Chairman and my colleague, Ms. Bonamici, I applaud you on your 
work on this strong and important piece of legislation, and I urge all 
of my colleagues to vote ``yes'' on my amendment.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the 
gentlewoman from California (Ms. Hahn).
  The amendment was agreed to.


           Amendment No. 7 Offered by Mr. Peters of Michigan

  The CHAIR. It is now in order to consider amendment No. 7 printed in 
part B of House Report 113-546.
  Mr. PETERS of Michigan. Madam Chairman, I have an amendment at the 
desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 15, after line 16, insert the following new 
     subparagraph, and redesignate the succeeding subparagraphs 
     accordingly:
       (E) in clause (ix), as so redesignated--
       (i) by inserting ``decreased credit score,'' after ``credit 
     reports,''; and
       (ii) by inserting ``reduced ability to rent or purchase a 
     home or car, potential difficulty in securing employment,'' 
     after ``Federal law,'';

  The CHAIR. Pursuant to House Resolution 677, the gentleman from 
Michigan (Mr. Peters) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Michigan.
  Mr. PETERS of Michigan. Madam Chair, I rise today to offer an 
amendment that builds upon the existing language in this bill to 
strengthen protections for American students. My amendment ensures 
students have the information that they need to make important 
financial decisions that could impact their lives long after 
graduation.
  As you may be aware, combined student loan debt in our Nation has 
topped $1 trillion, and the unfortunate reality is that many of those 
students do not know the enormous harm that defaulting on that debt can 
cause to them. Nearly 15 percent of the student loan borrowers default 
within 3 years of graduation, and this can have serious consequences on 
their ability to rent an apartment, to purchase a car or a house, or to 
even obtain future employment.
  Madam Chair, I applaud the spirit of this bipartisan legislation to 
provide enhanced financial counseling services to our Nation's 
students, and I look forward to voting in favor of it. My amendment 
will make a very simple adjustment to ensure the full effectiveness, 
however, of the bill.
  My amendment will simply require that all student borrowers receive 
an explanation of the impact of a delinquency or of a default on loans 
to their credit scores, including the borrower's future ability to find 
employment or to purchase a home or a car. It is important for students 
to have this information when they first receive the loans. For many 
recent graduates, the idea of a credit report or a credit score may 
seem very abstract. My amendment ensures that the impact of 
delinquencies or defaults are explained in very concrete terms.
  Recent graduates are the top in their fields but, all too often, fall 
behind when it comes to financial literacy, which can have a lasting 
impact on their lives, and it can also take a toll on our economy. For 
more than 20 years, I worked as a financial adviser, helping families 
plan for their futures. It is important that all of our graduates 
understand how the decisions they make today will affect them and their 
families down the road when they are finding a job, buying a car, or 
renting or trying to own a home. We need to promote financial literacy 
when it can do the most good--before a borrower gets in trouble.
  As we continue working to make college more affordable for our 
students, I believe this legislation and my amendment to it are both 
commonsense steps in the right direction that we can act on 
immediately. I look forward to a strong bipartisan vote on this bill, 
and I hope the Senate takes up this important legislation in a timely 
manner. I urge my colleagues to join me in the support of this 
amendment.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Michigan (Mr. Peters).
  The amendment was agreed to.
  Mr. KLINE. Madam Chair, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Ms. 
Foxx) having assumed the chair, Mrs. Black, Chair of the Committee of 
the Whole House on the state of the Union, reported that that 
Committee, having had under consideration the bill (H.R. 4984) to amend 
the loan counseling requirements under the Higher Education Act of 
1965, and for other purposes, had come to no resolution thereon.

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