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113th Congress  }                                           {    Report
  2d Session    }        HOUSE OF REPRESENTATIVES           {   113-531

=======================================================================
 
     EMPOWERING STUDENTS THROUGH ENHANCED FINANCIAL COUNSELING ACT 

                                _______
                                

 July 17, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Kline, from the Committee on Education and the Workforce, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4984]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 4984) to amend the loan counseling 
requirements under the Higher Education Act of 1965, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

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--
                          ``(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 Act to carry out this Act or the amendments made 
by this Act.

                                Purpose

    H.R. 4984, the Empowering Students through Enhanced 
Financial Counseling Act, promotes financial literacy through 
enhanced counseling for recipients of federal financial aid.

                            Committee Action

    As the Committee on Education and the Workforce begins the 
Higher Education Act reauthorization process, increasing 
transparency and usefulness of higher education data; 
simplifying and improving the federal student aid programs; and 
promoting innovation, access, and completion remain top 
priorities.

                             112TH CONGRESS

Hearings--First session

    On March 1, 2011, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., on ``Education 
Regulations: Weighing the Burden on Schools and Students.'' The 
hearing was the first in a series examining the burden of 
federal, state, and local regulations on the nation's education 
system. The purpose of the hearing was to uncover the damaging 
effects of federal regulations on schools and institutions. 
These rules increasingly stifle growth and innovation, raise 
operating costs, and limit student access to affordable 
colleges and universities throughout the nation. Testifying 
before the committee were Dr. Edgar Hatrick, Superintendent, 
Loudon County Public Schools, Ashburn, Virginia; Ms. Kati 
Haycock, President, The Education Trust, Washington, D.C.; Mr. 
Gene Wilhoit, Executive Director, Council of Chief State School 
Officers, Washington, D.C.; and Mr. Christopher B. Nelson, 
President, St. John's College, Annapolis, Maryland.
    On March 11, 2011, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., on ``Education 
Regulations: Federal Overreach into Academic Affairs.'' The 
purpose of the hearing was to discuss the most egregious and 
intrusive pieces of the program integrity regulations issued by 
the U.S. Department of Education, specifically, the state 
authorization regulation and the credit hour regulation, and to 
uncover the unintended consequences of the regulations to 
states and institutions of higher education. Testifying before 
the subcommittee were Mr. John Ebersole, President, Excelsior 
College, Albany, New York; Dr. G. Blair Dowden, President, 
Huntington University, Huntington, Indiana; The Honorable 
Kathleen Tighe, Inspector General, U.S. Department of 
Education, Washington, D.C.; and Mr. Ralph Wolff, President, 
Western Association of Schools and Colleges, Alameda, 
California.
    On March 17, 2011, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., on ``Education 
Regulations: Roadblocks to Student Choice in Higher 
Education.'' The purpose of the hearing was to explore the 
harmful consequences of the gainful employment regulation 
issued by the U.S. Department of Education. Testifying before 
the committee were Ms. Catherine Barreto, Graduate, Monroe 
College, and Senior Sales Associate, Doubletree Hotels, 
Brooklyn, New York; Mr. Travis Jennings, Electrical Supervisor 
of the Manufacturing Launch Systems Group, Orbital Sciences 
Corporation, Chandler, Arizona; Dr. Arnold Mitchem, President, 
Council for Opportunity in Education, Washington, D.C.; and Ms. 
Jeanne Herrmann, Chief Operating Officer, Globe University/
Minnesota School of Business, Woodbury, Minnesota.
    On March 21, 2011, the Committee on Education and the 
Workforce held a hearing in Wilkes-Barre, Pennsylvania, on 
``Reviving our Economy: The Role of Higher Education in Job 
Growth and Development.'' The purpose of the hearing was to 
highlight work by local colleges and universities to respond to 
local and state economic needs. Testifying before the committee 
were Mr. James Perry, President, Hazelton City Council, 
Hazelton, Pennsylvania; Mr. Jeffrey Alesson, Vice President of 
Strategic Planning and Quality Assurance, Diamond 
Manufacturing, Exeter, Pennsylvania; Dr. Reynold Verret, 
Provost, Wilkes University, Wilkes-Barre, Pennsylvania; Mr. 
Raymond Angeli, President, Lackawanna College, Scranton, 
Pennsylvania; Ms. Joan Seaman, Executive Director, Empire 
Beauty School, Moosic, Pennsylvania; and Mr. Thomas P. Leary, 
President, Luzerne County Community College, Nanticoke, 
Pennsylvania.
    On March 22, 2011, the Committee on Education and the 
Workforce held a hearing in Utica, New York, on ``Reviving our 
Economy: The Role of Higher Education in Job Growth and 
Development.'' The purpose of the hearing was to highlight work 
by local colleges and universities to respond to local and 
state economic needs. Testifying before the committee were Mr. 
Anthony J. Picente, Jr., County Executive, Oneida County, 
Utica, New York; Mr. Dave Mathis, Director, Oneida County 
Workforce Development, Utica, New York; Dr. John Bay, Vice 
President and Chief Scientist, Assured Information Security, 
Inc., Rome, New York; Dr. Bjong Wolf Yeigh, President, State 
University of New York Institute of Technology, Utica, New 
York; Dr. Ann Marie Murray, President, Herkimer County 
Community College, Herkimer, New York; Dr. Judith Kirkpatrick, 
Provost, Utica College, Utica, New York; and Mr. Phil Williams, 
President, Utica School of Commerce, The Business College, 
Utica, New York.
    On April 21, 2011, the Committee on Education and the 
Workforce held a hearing in Columbia, Tennessee, on ``Reviving 
our Economy: The Role of Higher Education in Job Growth and 
Development.'' The purpose of the hearing was to highlight the 
work by local colleges and universities to respond to local and 
state economic needs. Testifying before the committee were Dr. 
Janet Smith, President, Columbia State Community College, 
Columbia, Tennessee; Dr. Ted Brown, President, Martin-Methodist 
College, Pulaski, Tennessee; Mr. Jim Coakley, President, 
Nashville Auto-Diesel College, Nashville, Tennessee; The 
Honorable Dean Dickey, Mayor, City of Columbia, Tennessee; Ms. 
Susan Marlow, President and Chief Executive Officer, Smart Data 
Strategies, Franklin, Tennessee; Ms. Jan McKeel, Executive 
Director, South Central Tennessee Workforce Board, Columbia, 
Tennessee; and Ms. Margaret Prater, Executive Director, 
Northwest Tennessee Workforce Board, Dyersburg, Tennessee.
    On July 8, 2011, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training, together with the House Committee on Oversight and 
Government Reform Subcommittee on Regulatory Affairs, Stimulus 
Oversight, and Government Spending, held a hearing in 
Washington, D.C., on ``The Gainful Employment Regulation: 
Limiting Job Growth and Student Choice.'' The purpose of the 
hearing was to explore the harmful consequences of the gainful 
employment regulation issued by the U.S. Department of 
Education. Testifying before the subcommittees were Dr. Dario 
A. Cortes, President, Berkeley College, New York City, New 
York; Dr. Anthony P. Carnevale, Director, Georgetown University 
Center on Education and the Workforce, Washington, D.C.; Ms. 
Karla Carpenter, Graduate, Herzing University and Program 
Manager, Quest Software, Madison, Wisconsin; and Mr. Harry C. 
Alford, President and Chief Executive Officer, National Black 
Chamber of Commerce, Washington, D.C.
    On August 16, 2011, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Greenville, South Carolina, on 
``Reviving Our Economy: The Role of Higher Education in Job 
Growth and Development.'' The purpose of the hearing was to 
highlight the work by local colleges and universities to 
respond to local and state economic needs. Testifying before 
the subcommittee were The Honorable Knox White, Mayor, City of 
Greenville, South Carolina; Mr. Werner Eikenbusch, Section 
Manager, Associate Development and Training, BMW Manufacturing 
Co., Spartanburg, South Carolina; Ms. Laura Harmon, Project 
Director, Greenville Works, Greenville, South Carolina; Dr. 
Brenda Thames, Vice President of Academic Development, 
Greenville Health System, Greenville, South Carolina; Mr. James 
F. Barker, President, Clemson University, Clemson, South 
Carolina; Dr. Thomas F. Moore, Chancellor, University of South 
Carolina Upstate, Spartanburg, South Carolina; Dr. Keith 
Miller, President, Greenville Technical College, Greenville, 
South Carolina; and Ms. Amy Hickman, Campus President, ECPI 
College of Technology, Greenville, South Carolina.
    On October 25, 2011, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., on ``Government-
Run Student Loans: Ensuring the Direct Loan Program is 
Accountable to Students and Taxpayers.'' The purpose of the 
hearing was to examine the switch to and implementation of the 
Direct Loan program. Testifying before the subcommittee were 
Mr. James W. Runcie, Chief Operating Officer, Office of Federal 
Student Aid, U.S. Department of Education, Washington, D.C.; 
Mr. Ron H. Day, Director of Financial Aid, Kennesaw State 
University, Kennesaw, Georgia; Ms. Nancy Hoover, Director of 
Financial Aid, Denison University, Granville, Ohio; and Mr. 
Mark. A. Bandre, Vice President for Enrollment Management and 
Student Affairs, Baker University, Baldwin City, Kansas.
    On November 30, 2011, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., on ``Keeping 
College Within Reach: Discussing Ways Institutions Can 
Streamline Costs and Reduce Tuition.'' The purpose of the 
hearing was to highlight innovative practices institutions of 
higher education are implementing to reduce their costs to 
limit tuition increases for students. Testifying before the 
subcommittee were Ms. Jane V. Wellman, Executive Director, 
Delta Project on Postsecondary Costs, Productivity, and 
Accountability, Washington, D.C.; Dr. Ronald E. Manahan, 
President, Grace College and Seminary, Winona Lake, Indiana; 
Mr. Jamie P. Merisotis, President and Chief Executive Officer, 
Lumina Foundation for Education, Indianapolis, Indiana; and Mr. 
Tim Foster, President, Colorado Mesa University, Grand 
Junction, Colorado.

Legislative action--First session

    On February 17, 2011, the House of Representatives 
considered an amendment offered by Chairman John Kline (R-MN), 
Higher Education and Workforce Training Subcommittee Chairwoman 
Virginia Foxx (R-NC), and Rep. Alcee Hastings (D-FL) to H.R. 1, 
the Disaster Relief Appropriations Act of 2013. The amendment 
prohibited the use of funds by the U.S. Department of Education 
to implement and enforce the gainful employment regulation. The 
amendment was agreed to by a bipartisan vote of 289 to 136.
    On February 19, 2011, the House of Representatives passed 
H.R. 1 by a vote of 235 to 189. The amendment was not included 
in the bill at final passage.
    On June 3, 2011, Chairman John Kline (R-MN) and Higher 
Education and Workforce Training Subcommittee Chairwoman 
Virginia Foxx (R-NC) introduced H.R. 2117, the Protecting 
Academic Freedom in Higher Education Act. The bill repealed the 
state authorization regulation, one piece of the credit hour 
regulation, and prohibited the secretary of education from 
defining credit hour for any purpose under the Higher Education 
Act of 1965.
    On June 15, 2011, the Committee on Education and the 
Workforce considered H.R. 2117 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a bipartisan vote of 27 to 11.
    The committee considered and adopted the following 
amendment to H.R. 2117:
           Subcommittee Chairwoman Virginia Foxx (R-NC) 
        offered an amendment in the nature of a substitute to 
        add a short title to the legislation. The amendment was 
        adopted by voice vote.
    The committee further considered the following amendments 
to H.R. 2117, which were not adopted:
           Rep. Raul Grijalva (D-AZ) offered an 
        amendment to maintain pieces of the state authorization 
        regulation, including the complaint process. The 
        amendment failed by a vote of 17 to 22.
           Ranking Member George Miller (D-CA) offered 
        an amendment to prohibit implementation until the U.S. 
        Department of Education Inspector General certifies 
        there are equal or greater protections in place related 
        to program integrity under Title IV of the Higher 
        Education Act of 1965. The amendment failed by a vote 
        of 17 to 22.
           Rep. Rush Holt (D-NJ) offered an amendment 
        to stipulate the act will be effective only if the 
        maximum Pell Grant award is at least $5,550 for the 
        2012-2013 school year. The amendment was ruled out of 
        order.
           Rep. Tim Bishop (D-NY) offered an amendment 
        to strike the repeal of the credit hour regulation that 
        establishes a federal definition of a ``credit hour.'' 
        The amendment failed by a vote of 11 to 27.
           Rep. Tim Bishop (D-NY) offered an amendment 
        to strike the prohibition on the secretary of education 
        from defining credit hour in the future. The amendment 
        failed by a vote of 16 to 22.

Hearings--Second session

    On July 18, 2012, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., on ``Keeping 
College Within Reach: Exploring State Efforts to Curb Costs.'' 
The purpose of the hearing was to highlight innovative 
practices at the state level to assist postsecondary 
institutions in keeping costs affordable and to promote 
accountability of public funds. Testifying before the 
subcommittee were Mr. Scott Pattison, Executive Director, 
National Association of State Budget Officers, Washington, 
D.C.; Ms. Teresa Lubbers, Commissioner for Higher Education, 
State of Indiana, Indianapolis, Indiana; Mr. Stan Jones, 
President, Complete College America, Zionsville, Indiana; and 
Dr. Joe May, President, Louisiana Community and Technical 
College System, Baton Rouge, Louisiana.
    On September 20, 2012, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., on ``Assessing 
College Data: Helping to Provide Valuable Information to 
Students, Institutions, and Taxpayers.'' The purpose of the 
hearing was to examine data collected by the federal government 
from institutions of higher education, including data 
requirements established during the last reauthorization of the 
Higher Education Act. Testifying before the subcommittee were 
Dr. Mark Schneider, Vice President, American Institutes for 
Research, Washington, D.C.; Dr. James Hallmark, Vice Chancellor 
for Academic Affairs, Texas A&M; System, College Station, Texas; 
Dr. Jose Cruz, Vice President for Higher Education Policy and 
Practice, The Education Trust, Washington, D.C.; and Dr. Tracy 
Fitzsimmons, President, Shenandoah University, Winchester, 
Virginia.

Legislative action--Second session

    On February 28, 2012, the House of Representatives passed 
H.R. 2117 by a bipartisan vote of 303 to 114. The bill was sent 
to the Senate and referred to the Senate Committee on Health, 
Education, Labor, and Pensions.
    On April 25, 2012, Rep. Judy Biggert (R-IL) introduced H.R. 
4628, the Interest Rate Reduction Act. The bill reduced the 
interest rate on subsidized Stafford loans made to 
undergraduate students from 6.8 percent to 3.4 percent for one 
year, from July 1, 2012, through June 30, 2013. To offset the 
increase in mandatory spending, the bill repealed the 
Prevention and Public Health Fund authorized under Section 4002 
of the Patient Protection and Affordable Care Act and rescinded 
the balance of unobligated monies made available for the fund.
    On April 27, 2012, the House of Representatives passed H.R. 
4628 by a vote of 215 to 195.
    While H.R. 4628 was never considered by the Senate, its 
provisions were included in the Conference Report for H.R. 
4348, the Moving Ahead for Progress in the 21st Century Act 
(MAP-21), sponsored by Rep. John Mica (R-FL). To partially 
offset the increase in mandatory spending that resulted from 
the temporary reduction in interest rates on subsidized 
Stafford loans, the bill permanently restricted the period of 
eligibility to borrow subsidized Stafford loans to 150 percent 
of the published length of a student's educational program.
    On June 29, 2012, the House of Representatives passed the 
Conference Report to H.R. 4348 by a bipartisan vote of 373 to 
52.
    On June 29, 2012, the Senate passed the Conference Report 
to H.R. 4348 by a bipartisan vote of 74 to 19.
    On July 6, 2012, the President of the United States signed 
H.R. 4348 into law (P.L. 112-141).

                             113TH CONGRESS

Hearings--First session

    On March 13, 2013, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., on ``Keeping 
College Within Reach: Examining Opportunities to Strengthen 
Federal Student Loan Programs.'' The purpose of the hearing was 
to examine ways to strengthen federal student loans, as well as 
how moving to a market-based or variable interest rate on all 
federal student loans could benefit both students and 
taxpayers. Testifying before the committee were Dr. Deborah J. 
Lucas, Sloan Distinguished Professor of Finance, Massachusetts 
Institute of Technology, Cambridge, Massachusetts; Mr. Jason 
Delisle, Director, Federal Education Budget Project, The New 
America Foundation, Washington, D.C.; Mr. Justin Draeger, 
President and Chief Executive Officer, National Association of 
Student Financial Aid Administrators, Washington, D.C.; and Dr. 
Charmaine Mercer, Vice President of Policy, Alliance for 
Excellent Education, Washington, D.C.
    On April 9, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Monroe, Michigan, entitled 
``Reviving Our Economy: The Role of Higher Education in Job 
Growth and Development.'' The purpose of the hearing was to 
highlight work being done by local colleges and universities to 
respond to local and state economic needs. Testifying before 
the subcommittee were Mr. Henry Lievens, Commissioner, Monroe 
County, Monroe, Michigan; Ms. Lynette Dowler, Plant Director, 
Fossil Generation, DTE Energy, Detroit, Michigan; Ms. Susan 
Smith, Executive Director, Economic Development Partnership of 
Hillsdale County, Jonesville, Michigan; Mr. Dan Fairbanks, 
United Auto Workers International Representative, UAW-GM Skill 
Development and Training Department, Detroit, Michigan; Dr. 
David E. Nixon, President, Monroe County Community College, 
Monroe, Michigan; Sister Peg Albert, OP, Ph.D., President, 
Siena Heights University, Adrian, Michigan; Dr. Michelle 
Shields, Career Coach/Workforce Development Director, Jackson 
Community College, Jackson, Michigan; and Mr. Douglas A. Levy, 
Director of Financial Aid, Macomb Community College, Warren, 
Michigan.
    On April 16, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: The Role of Federal Student Aid 
Programs.'' The purpose of the hearing was to examine shifting 
the focus of federal student aid programs from enhancing access 
to improving student outcomes. Testifying before the 
subcommittee were Mr. Terry W. Hartle, Senior Vice President, 
Division of Government and Public Affairs, American Council on 
Education, Washington, D.C.; Ms. Moriah Miles, State Chair, 
Minnesota State University Student Association, Mankato, 
Minnesota; Ms. Patricia McGuire, President, Trinity Washington 
University, Washington, D.C.; and Mr. Dan Madzelan, Former 
Employee (Retired), U.S. Department of Education, University 
Park, Maryland.
    On April 24, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce held a 
hearing in Washington, D.C., entitled ``Keeping College Within 
Reach: Enhancing Transparency for Students, Families, and 
Taxpayers.'' The purpose of the hearing was to examine ways to 
improve the information provided by the federal government to 
inform students and families about their postsecondary 
education options. Testifying before the subcommittee were Dr. 
Donald E. Heller, Dean, College of Education, Michigan State 
University, East Lansing, Michigan; Mr. Alex Garrido, Student, 
Keiser University, Miami, Florida; Dr. Nicole Farmer Hurd, 
Founder and Executive Director, National College Advising 
Corps, Carrboro, North Carolina; and Mr. Travis Reindl, Program 
Director, Postsecondary Education, National Governors 
Association Center for Best Practices, Washington, D.C.
    On June 13, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: Discussing Program Quality through 
Accreditation.'' The purpose of the hearing was to examine the 
historical role of accreditation, discuss the role of regional 
and national accreditors in measuring institutional quality, 
and contemplate areas for reform. Testifying before the 
subcommittee were Dr. Elizabeth H. Sibolski, President, Middle 
States Commission on Higher Education, Philadelphia, 
Pennsylvania; Dr. Michale McComis, Executive Director, 
Accrediting Commission of Career Schools and Colleges, 
Arlington, Virginia; Ms. Anne D. Neal, President, American 
Council of Trustees and Alumni, Washington, D.C.; and Mr. Kevin 
Carey, Director of the Education Policy Program, The New 
America Foundation, Washington, D.C.
    On July 9, 2013, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., entitled 
``Keeping College Within Reach: Improving Higher Education 
through Innovation.'' The purpose of the hearing was to 
highlight innovation in higher education occurring at the state 
and institutional level and in the private sector. Testifying 
before the committee were Mr. Scott Jenkins, Director of 
External Relations, Western Governors University, Salt Lake 
City, Utah; Dr. Pamela J. Tate, President and Chief Executive 
Officer, Council for Adult and Experiential Learning, Chicago, 
Illinois; Dr. Joann A. Boughman, Senior Vice Chancellor for 
Academic Affairs, University System of Maryland, Adelphi, 
Maryland; and Mr. Burck Smith, Chief Executive Officer and 
Founder, StraighterLine, Baltimore, Maryland.
    On September 11, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: Supporting Higher Education Opportunities 
for America's Servicemembers and Veterans.'' The purpose of the 
hearing was to examine the efforts of higher education to 
improve postsecondary education opportunities for 
servicemembers and veterans. Testifying before the subcommittee 
were Mrs. Kimrey W. Rhinehardt, Vice President for Federal and 
Military Affairs, The University of North Carolina, Chapel 
Hill, North Carolina; Dr. Arthur F. Kirk, Jr., President, Saint 
Leo University, Saint Leo, Florida; Dr. Russell S. Kitchner, 
Vice President for Regulatory and Governmental Relations, 
American Public University System, Charles Town, West Virginia; 
and Dr. Ken Sauer, Senior Associate Commissioner for Research 
and Academic Affairs, Indiana Commission for Higher Education, 
Indianapolis, Indiana.
    On September 18, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: Improving Access and Affordability 
through Innovative Partnerships.'' The purpose of the hearing 
was to examine the efforts of higher education institutions to 
expand access and reduce costs by partnering with local 
employers, other colleges, or online course providers. 
Testifying before the subcommittee were Dr. Jeffrey Docking, 
President, Adrian College, Adrian, Michigan; Ms. Paula R. 
Singer, President and Chief Executive Officer, Laureate Global 
Products and Services, Baltimore, Maryland; Dr. Rich Baraniuk, 
Professor, Rice University, and Founder, Connexions, Houston, 
Texas; and Dr. Charles Lee Isbell, Jr., Professor and Senior 
Associate Dean, College of Computing, Georgia Institute of 
Technology, Atlanta, Georgia.
    On November 13, 2013, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., entitled 
``Keeping College Within Reach: Simplifying Federal Student 
Aid.'' The purpose of the hearing was to examine the need to 
streamline, consolidate, and simplify federal student aid 
programs. Testifying before the committee were Ms. Kristin D. 
Conklin, Founding Partner, HCM Strategies, LLC, Washington, 
D.C.; Dr. Sandy Baum, Research Professor of Education Policy, 
George Washington University Graduate School of Education and 
Human Development, and Senior Fellow, Urban Institute, 
Washington, D.C.; Ms. Jennifer Mishory, J.D., Deputy Director, 
Young Invincibles, Washington, D.C.; and Mr. Jason Delisle, 
Director, Federal Education Budget Project, New America 
Foundation, Washington, D.C.
    On December 3, 2013, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: Strengthening Pell Grants for Future 
Generations.'' The purpose of the hearing was to examine Pell 
Grant program reform proposals to better target funds to the 
neediest students and put the program on a fiscally responsible 
and sustainable path. Testifying before the subcommittee were 
Mr. Justin Draeger, President and Chief Executive Officer, 
National Association of Student Financial Aid Administrators, 
Washington, D.C.; Dr. Jenna Ashley Robinson, Director of 
Outreach, John W. Pope Center for Higher Education Policy, 
Raleigh, North Carolina; Mr. Michael Dannenberg, Director of 
Higher Education and Education Finance Policy, The Education 
Trust, Washington, D.C.; and Mr. Richard C. Heath, Director of 
Student Financial Services, Anne Arundel Community College, 
Arnold, Maryland.

Legislative action--First session

    On May 9, 2013, Chairman John Kline (R-MN) and Higher 
Education and Workforce Training Subcommittee Chairwoman 
Virginia Foxx (R-NC) introduced H.R. 1911, the Smarter 
Solutions for Students Act. The bill moved all federal student 
loans (except Perkins loans) to a market-based interest rate.
    On May 16, 2013, the Committee on Education and the 
Workforce considered H.R. 1911 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a bipartisan vote of 24 to 13.
    The committee considered and adopted the following 
amendment to H.R. 1911:
           Subcommittee Chairwoman Virginia Foxx (R-NC) 
        offered an amendment in the nature of a substitute to 
        make a technical change to the bill. The amendment was 
        adopted by voice vote.
    The committee further considered the following amendments 
to H.R. 1911, which were not adopted:
           Rep. Joe Heck (R-NV) offered an amendment to 
        allocate a portion of the savings generated under the 
        bill to Pell Grants. The amendment was withdrawn.
           Rep. Joe Heck (R-NV) offered an amendment to 
        provide the secretary of education with authority to 
        reduce the interest rate on student loans if a borrower 
        makes the first 48 payments on time. The amendment was 
        withdrawn.
           Rep. John Tierney (D-MA) offered an 
        amendment to set the federal student loan interest 
        rates at the same rate the Federal Reserve charges to 
        banks for two years. The amendment failed by a vote of 
        14 to 23.
           Rep. Joe Courtney (D-CT) offered an 
        amendment to extend the 3.4 percent interest rate on 
        subsidized Stafford loans for two years. The amendment 
        failed by a vote of 15 to 21.
    On May 23, 2013, the House of Representatives passed H.R. 
1911 by a bipartisan vote of 221 to 198.
    On July 24, 2013, the Senate passed a substitute version of 
H.R. 1911, the Bipartisan Student Loan Certainty Act, by a 
bipartisan vote of 81 to 18. The legislation allowed student 
loan interest rates to reset once a year by the market, but 
lock into a fixed rate once the loan is disbursed to the 
student. Interest rates would be set using the following 
formulas:
           Undergraduate Stafford loans (subsidized and 
        unsubsidized): 10-year Treasury Note plus 2.05 percent, 
        capped at 8.25 percent.
           Graduate Stafford loans: 10-year Treasury 
        Note plus 3.6 percent, capped at 9.5 percent
           PLUS loans (graduate and parent): 10-year 
        Treasury Note plus 4.6 percent, capped at 10.5 percent.
    On July 31, 2013, the House of Representatives agreed to 
suspend the rules and agree to the Senate amendment to H.R. 
1911 by a bipartisan vote of 392 to 31.
    On August 9, 2013, the President of the United States 
signed H.R. 1911 into law (P.L. 113-28).
    On May 13, 2013, Rep. Luke Messer (R-IN) introduced H.R. 
1949, the Improving Postsecondary Education Data for Students 
Act. The bill directed the secretary of education to convene an 
Advisory Committee on Improving Postsecondary Education Data to 
conduct a study on the factors students and families want, 
need, and already consider when choosing a higher education 
institution.
    On May 16, 2013, the Committee on Education and the 
Workforce considered H.R. 1949 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a voice vote. The committee considered and 
adopted the following amendment to H.R. 1949:
           Rep. Luke Messer (R-IN) offered an amendment 
        in the nature of a substitute to H.R. 1949 to (1) 
        include individuals who represent undergraduate and 
        graduate education; college and career counselors at 
        secondary schools; experts in data policy, collection, 
        and use; and experts in labor markets on the list of 
        individuals required to be represented on the Advisory 
        Committee on Improving Postsecondary Education Data; 
        (2) ensure individuals on the advisory committee 
        represent economic, racial, and geographically diverse 
        populations; (3) require the advisory committee to 
        examine information related to the sources of financial 
        assistance, including federal student loans, as part of 
        the required aspects of the study; (4) require the 
        advisory committee to examine how information regarding 
        student outcomes should be disaggregated for first-
        generation students; and (5) provide other conforming 
        and technical changes to the bill. The amendment was 
        adopted by voice vote.
    On May 23, 2013, the House of Representatives agreed to 
suspend the rules and pass H.R. 1949 by voice vote. The bill 
was sent to the Senate and referred to the Senate Committee on 
Health, Education, Labor, and Pensions.
    On July 10, 2013, Chairman John Kline (R-MN), Higher 
Education and Workforce Training Subcommittee Chairwoman 
Virginia Foxx (R-NC), and Rep. Alcee Hastings (D-FL) introduced 
H.R. 2637, the Supporting Academic Freedom through Regulatory 
Relief Act. The bill, which included the text of the Protecting 
Academic Freedom in Higher Education Act (H.R. 2117) and the 
Kline/Foxx/Hastings amendment to H.R. 1 from the 112th 
Congress, repealed the credit hour, state authorization, and 
gainful employment regulations and amended the statute to 
clarify the incentive compensation regulation. Additionally, 
the bill prohibited the U.S. Department of Education from 
issuing related regulations until after Congress reauthorizes 
the Higher Education Act.
    On July 24, 2013, the Committee on Education and the 
Workforce considered H.R. 2637 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a bipartisan vote of 22 to 13.
    The committee considered and adopted the following 
amendment to H.R. 2637:
           Subcommittee Chairwoman Virginia Foxx (R-NC) 
        offered an amendment in the nature of a substitute to 
        change a subsection title in the legislation. The 
        amendment was adopted by voice vote.
    The committee further considered the following amendment to 
H.R. 2637, which was not adopted:
           Rep. Tim Bishop (D-NY) offered an amendment 
        to strike the prohibition on the U.S. Department of 
        Education from issuing regulations related to state 
        authorization, gainful employment, and credit hour. The 
        amendment failed by a vote of 13 to 22.

Hearings--Second session

    On January 28, 2014, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled ``Keeping 
College Within Reach: Sharing Best Practices for Serving Low-
Income and First Generation Students.'' The purpose of the 
hearing was to highlight best practices at institutions of 
higher education for serving low-income and first generation 
students. Testifying before the subcommittee were Dr. James 
Anderson, Chancellor, Fayetteville State University, 
Fayetteville, North Carolina; Mrs. Mary Beth Del Balzo, Senior 
Executive Vice President and Chief Executive Officer, The 
College of Westchester, White Plains, New York; Mr. Josse Alex 
Garrido, Graduate Student, University of Texas--Pan American, 
Edinburg, Texas; and Rev. Dennis H. Holtschneider, President, 
DePaul University, Chicago, Illinois.
    On February 27, 2013, the Committee on Education and the 
Workforce Subcommittee on Early Childhood, Elementary, and 
Secondary Education and Subcommittee on Higher Education and 
Workforce Training held a joint hearing in Washington, D.C., 
entitled ``Exploring Efforts to Strengthen the Teaching 
Profession.'' The purpose of the hearing was to discuss the 
state of teacher preparation nationwide. Testifying before the 
subcommittees were Dr. Deborah A. Gist, Commissioner, Rhode 
Island Department of Elementary and Secondary Education, 
Providence, Rhode Island; Dr. Marcy Singer-Gabella, Professor 
of the Practice of Education, Vanderbilt University, Nashville, 
Tennessee; Dr. Heather Peske, Associate Commissioner for 
Educator Quality, Massachusetts Department of Elementary and 
Secondary Education, Malden, Massachusetts; and Ms. Christina 
Hall, Co-Founder and Co-Director, Urban Teacher Center, 
Baltimore, Maryland.
    On March 12, 2014, the Committee on Education and the 
Workforce Subcommittee on Higher Education and Workforce 
Training held a hearing in Washington, D.C., entitled 
``Examining the Mismanagement of the Student Loan 
Rehabilitation Process.'' The purpose of the hearing was to 
examine the U.S. Department of Education's ability to oversee 
the processing of rehabilitated loans issued under the Direct 
Loan program. Testifying before the subcommittee were Ms. 
Melissa Emrey-Arras, Director of Education, Workforce, and 
Income Security Issues, U.S. Government Accountability Office, 
Boston, Massachusetts; The Honorable Kathleen Tighe, Inspector 
General, Department of Education, Washington, D.C.; Mr. James 
Runcie, Chief Operating Officer, Federal Student Aid, U.S. 
Department of Education, Washington, D.C.; and Ms. Peg Julius, 
Executive Director of Enrollment Management, Kirkwood Community 
College, Cedar Rapids, Iowa.
    On March 20, 2014, the Committee on Education and the 
Workforce held a hearing in Mesa, Arizona, entitled ``Reviving 
our Economy: Supporting a 21st Century Workforce.'' The purpose 
of the hearing was to explore the role of local higher 
education institutions in fostering job creation and growth 
through innovative partnerships with the business community and 
new modes of teaching delivery. Testifying before the committee 
were The Honorable Rick Heumann, Vice Mayor, City of Chandler, 
Arizona; Ms. Cathleen Barton, Education Manager, Intel 
Corporate Affairs, Southwestern United States, Intel 
Corporation, Chandler, Arizona; Mr. Lee D. Lambert, J.D., 
Chancellor, Pima Community College, Tucson, Arizona; Dr. 
William Pepicello, President, University of Phoenix, Tempe, 
Arizona; Dr. Michael Crow, President, Arizona State University, 
Tempe, Arizona; Dr. Ann Weaver Hart, President, The University 
of Arizona, Tucson, Arizona; Dr. Ernest A. Lara, President, 
Estrella Mountain Community College, Avondale, Arizona; and Ms. 
Christy Farley, Vice President of Government Affairs and 
Business Partnerships, Northern Arizona University, Phoenix, 
Arizona.
    On April 2, 2014, the Committee on Education and the 
Workforce held a hearing in Washington, D.C., entitled 
``Keeping College Within Reach: Meeting the Needs of 
Contemporary Students.'' The purpose of the hearing was to 
examine how institutions, states, and other entities assist 
contemporary college students in accessing and completing 
postsecondary education. Testifying before the committee were 
Dr. George A. Pruitt, President, Thomas Edison State College, 
Trenton, New Jersey; Dr. Kevin Gilligan, Chairman and Chief 
Executive Officer, Capella Education Company, Minneapolis, 
Minnesota; Mr. David Moldoff, Chief Executive Officer and 
Founder, AcademyOne, Inc., West Chester, Pennsylvania; Dr. 
Joann A. Boughman, Senior Vice Chancellor for Academic Affairs, 
University System of Maryland, Adelphi, Maryland; Mr. Stan 
Jones, President, Complete College America, Indianapolis, 
Indiana; and Dr. Brooks A. Keel, President, Georgia Southern 
University, Statesboro, Georgia.

Legislative action--Second session

    On September 19, 2013, Rep. Matt Salmon (R-AZ), Rep. Susan 
Brooks (R-IN), and Rep. Jared Polis (D-CO) introduced H.R. 
3136, the Advancing Competency-Based Education Demonstration 
Project Act of 2013. The bill directs the secretary of 
education to select institutions or consortia of institutions 
for voluntary participation in competency-based education 
demonstration projects that provide participating entities with 
the ability to offer competency-based education programs that 
do not meet certain statutory and regulatory requirements which 
would otherwise prevent them from participating in federal 
student aid programs.
    On July 10, 2014, the Committee on Education and the 
Workforce considered H.R. 3136 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a voice vote. The committee considered and 
adopted the following amendment to H.R. 3136:
           Rep. Matt Salmon (R-AZ) and Rep. Jared Polis 
        (D-CO) offered an amendment in the nature of a 
        substitute to add certain requirements to the 
        applications to participate in a competency-based 
        education project, allow eligible entities to submit 
        amendments to their previously-approved applications, 
        set requirements for the entities the secretary must 
        choose to participate in the programs, require 
        institutions to provide student information to the 
        director of the Institute of Education Sciences (IES), 
        require the director of IES to annually evaluate each 
        project and provide a report with specified information 
        to the authorizing committees, authorize funds to be 
        available from the amount appropriated for salaries and 
        expenses of the Department of Education, and make 
        conforming and technical changes to the introduced 
        bill. The amendment was adopted by voice vote.
    The committee further considered the following amendment to 
H.R. 2637, which was not adopted:
           Rep. Tierney (D-MA) offered an amendment 
        that would allow students with federal student loans 
        and private student loans issued prior to 2013 to 
        refinance those loans into new federal loans at the 
        interest rate set for the 2013-2014 academic year. The 
        amendment was ruled non-germane. Rep. George Miller (D-
        CA) appealed the ruling of the chair. Rep. Glenn 
        Thompson (R-PA) offered a motion to table the appeal of 
        the ruling of the chair, which was adopted by a vote of 
        22 to 16.
    On June 26, 2014, Rep. Virginia Foxx (R-NC) and Rep. Luke 
Messer (R-IN) introduced H.R. 4983, the Strengthening 
Transparency in Higher Education Act. The bill simplifies and 
streamlines the information made publicly available by the 
Secretary of Education regarding institutions of higher 
education.
    On July 10, 2014, the Committee on Education and the 
Workforce considered H.R. 4983 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a voice vote. The committee considered and 
adopted the following amendment to H.R. 4983:
           Rep. Virginia Foxx (R-NC) offered an 
        amendment in the nature of a substitute to require 
        additional information on the College Dashboard, 
        require the secretary of education to conduct consumer 
        testing in consultation with appropriate federal 
        departments and agencies, ensure consumer testing 
        addresses whether the College Dashboard provides useful 
        and relevant information to students and families, 
        require the secretary of education to submit to the 
        authorizing committees recommendations based on the 
        results of consumer testing, set new minimum 
        requirements for net price calculators, require funding 
        to come from funds already appropriated to maintain the 
        College Navigator, and make other conforming and 
        technical changes. The amendment was adopted by voice 
        vote.
    The committee further considered the following amendment to 
H.R. 4983, which was not adopted:
           Rep. George Miller (D-CA) offered an 
        amendment that would require the commissioner of 
        education statistics to establish a formula for 
        determining the percentage of student borrowers who 
        have completed their course of study and who are in 
        repayment or in an authorized deferment period at 
        three, five and 10 years after completion of a program 
        of study. The amendment failed by a vote of 13 to 21.
    On June 26, 2014, Rep. Brett Guthrie (R-KY) and Rep. 
Richard Hudson (R-NC) introduced H.R. 4984, the Empowering 
Students through Enhanced Financial Counseling Act. The bill 
amends the loan counseling requirements under the Higher 
Education Act and requires counseling for Federal Pell Grant 
recipients.
    On July 10, 2014, the Committee on Education and the 
Workforce considered H.R. 4984 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by voice vote. The committee considered and 
adopted the following amendment to H.R. 4984:
           Rep. Brett Guthrie (R-KY) and Rep. Suzanne 
        Bonamici (D-OR) offered an amendment in the nature of a 
        substitute to remove the requirement that annual 
        counseling for Pell Grant recipients be tied to 
        disbursement of the grant, require additional 
        information be disclosed to borrowers during annual 
        counseling and exit counseling sessions, require 
        institutions to provide annual counseling to borrowers 
        receiving Parent PLUS loans, require any funds used to 
        carry out the act to come from funds already 
        appropriated to maintain the Financial Awareness 
        Counseling Tool, and make conforming and technical 
        changes. The amendment was adopted by voice vote.
    The committee further considered the following amendment to 
H.R. 4984, which was not adopted:
           Rep. Susan Davis (D-CA) offered an amendment 
        to modify the rule requiring for-profit colleges to 
        receive at least 10 percent of their revenue from 
        sources other than the Department of Education to 
        remain eligible for federal student aid to include all 
        federal aid, including veterans' educational benefits 
        and some Workforce Investment Act funds, in the 90 
        percent portion of the calculation and only private 
        funds in the 10 percent portion of the calculation. The 
        amendment was ruled non-germane. Rep. George Miller (D-
        CA) appealed the ruling of the chair. Rep. Glenn 
        Thompson (R-PA) offered a motion to table the appeal of 
        the ruling of the chair, which was adopted by a vote of 
        20 to 13.

                                Summary

    The Empowering Students through Enhanced Financial 
Counseling Act would create a roadmap to repayment for 
borrowers by improving the timing and frequency of loan 
counseling and would ensure counseling is tailored to a 
borrower's individual situation. The legislation ensures both 
student and parent borrowers have the most current information 
by requiring annual counseling before they sign on the dotted 
line.
    The legislation would require annual counseling for student 
borrowers to include recommendations to exhaust available 
grant, work-study, and scholarship assistance before taking out 
loans, as well as a review of all federal student loan options 
before considering a private loan. The counseling must also 
include a notice that borrowers are not required to accept the 
full amount of the loan they are offered and information on any 
outstanding federal loan balance the borrower may have. The 
legislation also would require counseling for borrowers of 
parent PLUS loans on behalf of dependent students. Similar to 
counseling for student borrowers, the counseling would afford 
parent borrowers individualized information on their 
outstanding loan balance and on anticipated monthly payments 
based on their actual balance. Counseling also would include 
debt management strategies, information on the National Student 
Loan Data System, and contact information for the servicer of 
each loan.
    Additionally, the legislation would bolster exit counseling 
for students. Exit counseling now would include information on 
the borrower's outstanding loan balance, on anticipated monthly 
payments under the standard and income-based repayment plans, 
on the grace period preceding repayment, as well as contact 
information for those organizations servicing the borrower's 
loans. This information would empower borrowers to make smart 
financial decisions as they leave school and begin to repay 
their college loan commitments.
    The legislation also would require colleges annually to 
provide important counseling and disclosures to Pell Grant 
recipients. The counseling a Pell Grant recipient receive would 
address the terms and conditions of his or her grant, the 
approved educational expenses to which the grant could be 
applied, the maximum length of time a student is eligible to 
receive Pell Grants, the amount of assistance a student is 
eligible to receive, conditions under which a student may be 
required to repay a Pell Grant, and how a student may seek 
additional assistance due to a change in his or her financial 
circumstances.
    The legislation also requires the secretary of education to 
maintain a consumer-tested, online counseling tool that 
institutions could use to provide required counseling to their 
students. Institutions could choose to use this tool to provide 
their students financial counseling or they could offer it 
directly to their students, either during an in-person session 
or through an online tool created for the institution.

                            Committee Views


Introduction

    With tuition increasing and economic pressures faced by 
graduates mounting, responsibly financing a higher education 
has never been more critical. However, many students and 
parents are unprepared to navigate the complex maze of loans 
and grants offered by the federal government, states, the 
private sector, and institutions of higher education. Further, 
upon graduation, many borrowers also struggle to manage the 
repayment of the loans used to finance their education, leading 
to significant financial hardship and greater risk for 
taxpayers. Student financial literacy is vital to reversing 
this trend, yet current efforts are failing to equip students 
and parents with the crucial information they need to make wise 
financial decisions.
    Many students never receive meaningful financial literacy 
assistance as they review options for paying for college. The 
Higher Education Act currently requires only those students 
receiving federal student loans to complete counseling, while 
parents who take out loans on behalf of their student as well 
as students who receive only a Pell Grant do not receive any 
counseling. More robust and timely financial literacy support 
must be available.

Enhancing Loan Counseling for Students

    To help students make smart decisions about financing their 
higher education, Reps. Brett Guthrie (R-KY), Richard Hudson 
(R-NC), and Suzanne Bonamici (D-WA) championed H.R. 4984, the 
Empowering Students through Enhanced Financial Counseling Act. 
H.R. 4984 would improve the timing and frequency of loan 
counseling and would ensure students have the most current 
information available to them. Under current law, students who 
receive federal student loans only are required to complete 
one-time entrance counseling regarding the terms and conditions 
of their loans. This counseling only is required to occur prior 
to disbursement of the loan, so many students receive it after 
they have already decided how much to borrow. During a November 
13, 2013, hearing entitled ``Keeping College Within Reach: 
Simplifying Federal Student Aid,'' the Committee on Education 
and the Workforce explored opportunities to streamline the 
federal aid system for students. At the hearing, Ms. Jennifer 
Mishory, deputy director of Young Invincibles, highlighted the 
need for enhanced and more frequent financial aid counseling:

          In a recent Young Invincibles survey, 40 percent of 
        high-debt borrower respondents reported that they did 
        not receive federally mandated loan counseling. It is 
        perhaps unlikely that so many schools are out of 
        compliance, but that statistic warns us that many young 
        people benefit so little from loan counseling that they 
        do not remember receiving it--or did not consider what 
        they received to constitute counseling.

    With student loan defaults rates on the rise, the committee 
believes students should be given a complete picture of not 
only their rights and obligation with respect to their federal 
loans, but also the impact taking out loans may have on their 
financial futures each year--before they accept a new round of 
student loans. H.R. 4984 requires loan counseling to occur 
annually before a student accepts a federal student loan for 
the year. The legislation also requires counseling be 
personalized to the individual borrower's situation, rather 
than just providing general information applicable to a range 
of borrowers. In the course of just one school year, Indiana 
University was able to reduce undergraduate Stafford loan 
disbursements by 11 percent, or $31 million, by telling 
students annually what their monthly payment would be after 
graduation before they took out loans for the next year. This 
was more than five times the decrease in outlays at four-year 
public institutions nationally.\1\ The committee believes 
better information about loans and the post-college obligations 
and responsibilities that come with those loans would help 
students to make wise borrowing decisions.
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    \1\http://www.bloomberg.com/news/2014-07-03/here-s-how-indiana-
university-students-borrowed-31-million-less.html
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    At the November 13, 2013, Committee on Education and the 
Workforce hearing, Jason Delisle, director of the federal 
education budget project at the New America Foundation, 
highlighted the complexity of the federal student loan program, 
the confusion students often face, and the need for early and 
improved information about federal student loan options.

          From the borrower's perspective, the federal student 
        loan program is unnecessarily complex, and many of its 
        most important benefits are opt-in, difficult to 
        access, or even hidden--and many terms and benefits 
        overlap or cancel one another out. When a student 
        applies for federal loans, he would confront a mix of 
        types, terms, and names. Some may make sense to him, 
        others would confuse him, and some he may not even know 
        exist. Would he know that a ``Stafford'' loan is a 
        federal loan? Would he understand that ``unsubsidized'' 
        doesn't mean he is getting a bad deal?

    During the 2011-2012 academic year, almost half of private 
loan borrowers did not exhaust federal Stafford loan options 
before taking out private student loans.\2\ The committee is 
concerned about the growing amount of student loan debt in the 
country and wants to ensure students are aware of the 
potentially more favorable terms available with federal loans. 
Annual counseling would now include recommendations for 
students to exhaust available grant, work-study, and 
scholarship assistance before taking out loans, a review of all 
federal student loan options before considering a private loan, 
and an explanation of the rights and obligations associated 
with a private loan. The counseling also would include a notice 
that students are not required to accept the full amount of the 
federal student loan offered and information on any outstanding 
federal student loan balance the borrower may have.
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    \2\ http://www.ticas.org/files/pub/private_loan_facts_trends.pdf
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    H.R. 4984 also requires bolstered exit counseling. Under 
current law, students who receive federal student loans must 
complete exit counseling before they complete their course of 
study. This counseling must include information on available 
repayment plans, debt management strategies, and loan 
forgiveness options; however, this counseling is very general 
and does not provide any information on the borrower's specific 
situation. Under H.R. 4984, exit counseling would include a 
statement of the borrower's outstanding loan balance; 
anticipated monthly payments based on the borrower's actual 
balance under both the standard repayment plan and income-based 
repayment plan, based on the borrower's anticipated salary; 
information on the grace period preceding repayment; and 
contact information for those organizations servicing the 
borrower's loans. The committee believes this additional 
information would empower borrowers to make smarter financial 
decisions as they leave school and begin to repay their college 
loan commitments.

Parent PLUS Borrowers

    Parents taking out a federal loan to help their children 
achieve the dream of a postsecondary education comprised almost 
10 percent of federal student loan volume disbursed last 
year.\3\ These borrowers are subject to the majority of the 
same terms, conditions, and responsibilities as student 
borrowers and can borrow up to the cost of attendance--much 
more than the typical student borrower. However, parent 
borrowers currently receive very little information about their 
obligations with respect to their loan or assistance in 
planning for repayment. The committee believes providing the 
same information and disclosures to parents prior to taking out 
a loan is crucial for encouraging smart borrowing and on-time 
repayment. The Empowering Students through Enhanced Financial 
Counseling Act would require annual counseling for all 
borrowers of a parent PLUS loan prior to or in conjunction with 
the acceptance of the PLUS loan.
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    \3\https://trends.collegeboard.org/student-aid/figures-tables/
growth-federal-and-nonfederal-loans-over-time
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    This year, the U.S. Department of Education released the 
three-year cohort default rates for borrowers of parent PLUS 
loans for the first time. The released rates covered a multi-
year period from FY2006-FY2010. The most current rate for 
borrowers who had a student at any type of school was 4.1 
percent, up from 1.8 percent in 2006.\4\ To put a stop to this 
upward trend, the committee believes these borrowers should be 
provided with counseling each year they wish to take out an 
additional loan. Similar to counseling for student borrowers, 
the counseling would afford parent borrowers individualized 
information on their outstanding loan balance and anticipated 
monthly payments based on the actual balance. Counseling also 
would include debt management strategies, information on the 
National Student Loan Data System, and contact information for 
the servicer of each of their loans.
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    \4\http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/
programintegrity.html
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Better Information for Pell Grant Recipients

    The Empowering Students through Enhanced Financial 
Counseling Act would require all recipients of a Pell Grant to 
receive annual disclosures on the terms and conditions of their 
grants. The disclosures would include information on the 
approved educational expenses to which the grants could be 
applied, the conditions under which student may be required to 
repay Pell Grants, and how students may seek additional 
assistance due to changes in their financial circumstances. 
Additionally, the disclosures would provide students 
information on the maximum number of semesters, or the 
equivalent, for which they may be eligible to receive Pell 
Grants, as well as a statement of the actual amount of time 
remaining for which they personally may be eligible. The 
information would ensure students are aware of their time-
limited eligibility to receive Pell Grants and would encourage 
them to complete their academic program prior to exhausting 
their eligibility for the program. The committee recognizes the 
important role the Pell Grant program plays in helping low-
income students access and complete a postsecondary education 
and does not intend for this counseling to be a hurdle for 
students to receive their grant. H.R. 4984 would ensure those 
students are armed with the knowledge needed to use their Pell 
Grant eligibility in the most effective way possible.

Developing a Consumer-Tested Online Tool

    A recent research study on federally mandated student loan 
counseling, during which researchers studied actual borrowers 
going through the federal government's online counseling tool, 
found borrowers thought the tool to be too text heavy and 
wanted more personalized information.\5\ The committee 
appreciates the work the U.S. Department of Education has done 
in creating the Financial Awareness Counseling tool, but 
believes more can be done to make the tool more relevant and 
meaningful for borrowers. The Empowering Students through 
Enhanced Financial Counseling Act requires the secretary of 
education to maintain an online counseling tool institutions 
could use to provide required counseling to their students. The 
committee expects the department would build upon the existing 
tool to meet this requirement of the legislation. Additionally, 
H.R. 4984 requires the department to conduct consumer testing 
of the online financial aid counseling tools, in consultation 
with other relevant federal agencies, to ensure the information 
provided through the tools is presented in the most user-
friendly manner possible, which would better assist students 
and parents in understanding their rights and obligations with 
respect to borrowing student loans or receiving Pell Grants.
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    \5\http://chronicle.com/blogs/headcount/new-research-points-to-
gaps-in-student-loan-counseling/
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    Recognizing some institutions already provide their 
students with robust loan counseling, H.R. 4984 allows 
institutions to choose the manner in which they provide 
counseling to their students and parents. Institutions would 
have the option to provide financial counseling directly, 
either during an in-person session or through an online tool 
created for or by the institution, or an institution could 
elect to have the students use the consumer-tested online tool 
administered by the U.S. Department of Education. If an 
institution opts to provide the counseling themselves, the 
committee notes an institution could meet the requirements 
under H.R. 4984 by contracting with entities that have 
experience in offering this type of counseling to students, 
such as guaranty agencies. If an institution chooses to use the 
department's online tool, the department would then be 
responsible for keeping a record of which individuals have 
completed counseling and notifying borrowers of the obligation 
to complete the counseling.

Conclusion

    The current financial counseling requirements are 
inadequate for providing student and parent borrowers with the 
information they need to plan for college costs and responsibly 
manage their loan repayment. Currently, counseling occurs too 
late to guide students' decisions for smart borrowing and too 
infrequently to make a lasting impression about the 
implications of student debt. The Empowering Students through 
Enhanced Financial Counseling Act would provide students and 
parents the tools and information they need to borrow and repay 
their student loans in a responsible way.

                      Section-by-Section Analysis


Section 1. Short title

    States the short title is the Empowering Students through 
Enhanced Financial Counseling Act.

Section 2. Annual counseling

    Amends section 485(l) of the Higher Education Act to 
require institutions ensure each individual who receives a 
federal student loan also receives interactive annual 
counseling on the terms, conditions, and responsibilities of 
such loan. Pell Grant recipients likewise would receive annual 
counseling on the terms, conditions, and responsibilities of 
their grants.
    Requires institutions to ensure, as a part of carrying out 
the counseling requirements, all federal student loan borrowers 
annually affirmatively accept new loans prior to the 
disbursement of those loans.

Section 3. Exit counseling

    Amends section 485(b) of the Higher Education Act to ensure 
students who receive federal student loans receive 
individualized, interactive exit counseling regarding their 
loan portfolios and repayment options.

Section 4. Online counseling tools

    Requires the secretary of education to maintain consumer-
tested online counseling tools that provide the required annual 
and exit counseling.

                       Explanation of Amendments

    The amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 4984 promotes financial literacy through enhanced 
counseling for recipients of federal financial aid.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This issue is addressed in the CBO letter.

                           Earmark Statement

    H.R. 4984 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House rule XXI.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 4984 is to promote financial literacy through 
enhanced counseling for recipients of federal financial aid.

                    Duplication of Federal Programs

    No provision of H.R. 4984 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The committee estimates that enacting H.R. 4984 does not 
specifically direct the completion of any specific rule makings 
within the meaning of 5 U.S.C. 551.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the committee's oversight findings and recommendations are 
reflected in the body of this report.

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the committee has received 
the following estimate for H.R. 4984 from the Director of the 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 15, 2014.
Hon. John Kline,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4984, the 
Empowering Students Through Enhanced Financial Counseling Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Justin 
Humphrey.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 4984--Empowering Students Through Enhanced Financial Counseling 
        Act

    H.R. 4984 would reserve $2 million from funding for the 
Department of Education to change the requirements for the 
counseling of students who participate in the federal student 
aid programs, such as federal student loans and Pell grants.
    CBO estimates that implementing H.R. 4984 would require $2 
million for administrative costs for the department over the 
2015-2019 period, assuming the availability of appropriated 
funds.
    Enacting the bill would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    H.R. 4984 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Justin Humphrey. 
This estimate was approved by Peter H. Fontaine, Assistant 
Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 4984. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      HIGHER EDUCATION ACT OF 1965




           *       *       *       *       *       *       *
TITLE IV--STUDENT ASSISTANCE

           *       *       *       *       *       *       *



Part G--General Provisions Relating to Student Assistance Programs

           *       *       *       *       *       *       *



SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 
                    STUDENTS.

  (a) * * *
  (b) Exit Counseling for Borrowers.--(1)(A) Each eligible 
institution shall, [through financial aid offices or otherwise] 
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), provide counseling to borrowers of loans that are 
made, insured, or guaranteed under part B (other than loans 
made pursuant to section 428C or loans under section 428B made 
on behalf of a student) or made under part D (other than 
Federal Direct Consolidation Loans or Federal Direct PLUS Loans 
made on behalf of a student) or made under part E of this title 
prior to the completion of the course of study for which the 
borrower enrolled at the institution or at the time of 
departure from such institution. The counseling required by 
this subsection shall include--
          (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;
          [(i)] (iv) information on the repayment plans 
        available, including a description of the different 
        features [of each plan] of at least the standard 
        repayment plan and the income-based repayment plan 
        under section 493C and [sample information showing the 
        average] information, based on the borrower's 
        outstanding balance described in clause (i), showing 
        the borrower's anticipated monthly payments, and the 
        difference in interest paid and total payments, under 
        each plan;
          [(ii)] (v) debt management strategies that are 
        designed to facilitate the repayment of such 
        indebtedness;
          [(iii)] (vi) an explanation that the borrower has the 
        options to prepay each loan, pay each loan on a shorter 
        schedule, and change repayment plans;
          [(iv)] (vii) for any loan forgiveness or cancellation 
        provision of this title, a general description of the 
        terms and conditions under which the borrower may 
        obtain full or partial forgiveness or cancellation of 
        the principal and interest, and a copy of the 
        information provided by the Secretary under section 
        485(d);
          [(v)] (viii) for any forbearance provision of this 
        title, a general description of the terms and 
        conditions under which the borrower may defer repayment 
        of principal or interest or be granted forbearance, and 
        a copy of the information provided by the Secretary 
        under section 485(d);
          [(vi)] (ix) the consequences of defaulting on a loan, 
        including adverse credit reports, delinquent debt 
        collection procedures under Federal law, and 
        litigation;
          [(vii)] (x) information on the effects of using a 
        [consolidation loan under section 428C or a] Federal 
        Direct Consolidation Loan to discharge the borrower's 
        loans under parts B, D, and E, including at a minimum--
                  (I) * * *

           *       *       *       *       *       *       *

          [(viii)] (xi) a general description of the types of 
        tax benefits that may be available to borrowers; [and]
          [(ix)] (xii) a notice to borrowers about the 
        availability of the National Student Loan Data System 
        and how the system can be used by a borrower to obtain 
        information on the status of the borrower's loans; 
        [and]
          (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)).
  (B) In the case of borrower who leaves an institution without 
the prior knowledge of the institution, the institution shall 
attempt to provide the information described in subparagraph 
(A) to the student online or in writing, 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).
  (2)(A) * * *

           *       *       *       *       *       *       *

  (C) Nothing in this subsection shall be construed to prohibit 
an institution of higher education from utilizing electronic 
means, such as the online counseling tool described in 
subsection (n)(1)(A), to provide personalized exit counseling.

           *       *       *       *       *       *       *

  [(l) Entrance Counseling for Borrowers.--
          [(1) Disclosure required prior to disbursement.--
                  [(A) In general.--Each eligible institution 
                shall, at or prior to the time of a 
                disbursement to a first-time borrower of a loan 
                made, insured, or guaranteed under part B 
                (other than a loan made pursuant to section 
                428C or a loan made on behalf of a student 
                pursuant to section 428B) or made under part D 
                (other than a Federal Direct Consolidation Loan 
                or a Federal Direct PLUS loan made on behalf of 
                a student), ensure that the borrower receives 
                comprehensive information on the terms and 
                conditions of the loan and of the 
                responsibilities the borrower has with respect 
                to such loan in accordance with paragraph (2). 
                Such information--
                          [(i) shall be provided in a simple 
                        and understandable manner; and
                          [(ii) may be provided--
                                  [(I) during an entrance 
                                counseling session conduction 
                                in person;
                                  [(II) on a separate written 
                                form provided to the borrower 
                                that the borrower signs and 
                                returns to the institution; or
                                  [(III) online, with the 
                                borrower acknowledging receipt 
                                of the information.
                  [(B) Use of interactive programs.--The 
                Secretary shall encourage institutions to carry 
                out the requirements of subparagraph (A) 
                through the use of interactive programs that 
                test the borrower's understanding of the terms 
                and conditions of the borrower's loans under 
                part B or D, using simple and understandable 
                language and clear formatting.
          [(2) Information to be provided.--The information to 
        be provided to the borrower under paragraph (1)(A) 
        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) Information on how interest accrues and 
                is capitalized during periods when the interest 
                is not paid by either the borrower or the 
                Secretary.
                  [(D) In the case of a loan made under section 
                428B or 428H, 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.
                  [(E) The definition of half-time enrollment 
                at the institution, during regular terms and 
                summer school, if applicable, and the 
                consequences of not maintaining half-time 
                enrollment.
                  [(F) 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.
                  [(G) Sample monthly repayment amounts based 
                on--
                          [(i) a range of levels of 
                        indebtedness of--
                                  [(I) borrowers of loans under 
                                section 428 or 428H; and
                                  [(II) as appropriate, 
                                graduate borrowers of loans 
                                under section 428, 428B, or 
                                428H; or
                          [(ii) the average cumulative 
                        indebtedness of other borrowers in the 
                        same program as the borrower at the 
                        same institution.
                  [(H) 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.
                  [(I) The likely consequences of default on 
                the loan, including adverse credit reports, 
                delinquent debt collection procedures under 
                Federal law, and litigation.
                  [(J) Information on the National Student Loan 
                Data System and how the borrower can access the 
                borrower's records.
                  [(K) The name of and contact information for 
                the individual 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.]
  (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--
                          (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).

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    We support and concur with the Majority views on H.R. 4984. 
Unfortunately, this bill does not go far enough to protect all 
students, and particularly veterans, because it fails to 
address a major loophole in HEA that allows institutions to 
exploit their GI benefits. That is why Democrats offered an 
amendment, which was rejected by the Majority, to help protect 
our veterans.
    The amendment, offered by Congresswoman Davis and 
Congressman Takano, closes the loophole in the 90/10 rule and 
will go a long way to end unscrupulous practices of some 
nefarious for-profit colleges.
    The 90/10 rule was designed to provide market incentives to 
for-profit institutions, in order to perform competitively with 
other private colleges and universities.
    The 90/10 rule mandates that for-profit colleges obtain at 
least 10 percent of their revenue from non-federal sources as a 
measure of program quality. But a loophole in the rule allows 
federal education benefits provided to veterans through the GI 
Bill, veteran tuition assistance, and other federal assistance 
to be treated as private dollars. This loophole has given some 
for-profit colleges a strong incentive to predatorily target 
our nation's service members and try to squeeze them for their 
military benefits.
    Further, colleges with higher levels of revenues from non-
federal sources have higher graduation rates and lower student 
loan defaults than colleges that rely almost exclusively on 
federal funding.
    According to Holly Petraeus, the assistant director at the 
Consumer Financial Protection Bureau's Office of Servicemember 
Affairs, this loophole has been a ``lucrative target for 
exploitation'' by for-profit colleges, and has resulted in 
``aggressive and deceptive'' targeting of service members in 
order to meet their 90/10 requirements.
    It has also been reported that colleges have encouraged 
veterans to take out more expensive private loans rather than 
federal loans with more affordable interest rates. Others have 
engaged in ``misleading recruiting practices'' on military 
installations.
    In sum, the current loophole undermines the integrity of 
the 90/10 rule, and as Holly Petraeus said, is putting our 
brave veterans ``under siege'' from nefarious for-profit 
colleges through aggressive and misleading marketing.
    Democrats believe that this is unacceptable. We have a 
responsibility to taxpayers and to our veterans to fix this 
problem and we can only do that with an act of Congress. 
Democrats will continue to work to make college more affordable 
and accessible, increase oversight and quality assurance of 
colleges and loan servicers, and to promote new and innovative 
practices that can reduce student loan debt.
                                   George Miller.
                                   Jared Polis.
                                   Robert C. ``Bobby'' Scott.
                                   Mark Takano.
                                   Timothy H. Bishop.
                                   Rush Holt.
                                   Raul M. Grijalva.
                                   Suzanne Bonamici.
                                   Frederica S. Wilson.
                                   Joe Courtney.
                                   Gregorio Kilili Sablan.
                                   Susan A. Davis.
                                   Ruben Hinojosa.
                                   Marcia L. Fudge.
                                   Mark Pocan.
                                   John F. Tierney.