S 1496 — Empowering Students Through Enhanced Financial Counseling Act

Summary

Empowering Students Through Enhanced Financial Counseling Act This bill modifies student loan counseling requirements applicable to institutions of higher education (IHEs). Currently, an IHE must provide entrance counseling to a student who is a first-time federal student loan borrower. This bill replaces required entrance counseling with required annual financial counseling concerning information on the terms, conditions, and responsibilities of the grant or loan. Also, it expands the required recipients of such annual counseling to include, in addition to student borrowers, Pell Grant recipients and parent PLUS Loan borrowers. In additional, the bill revises, expands, or establishes specific annual counseling information requirements for student borrowers, Pell Grant recipients, or parent PLUS Loan borrowers. The bill revises and expands exit counseling information requirements for borrowers to include an outstanding loan balance summary, the anticipated monthly payments under standard and income-based repayment plans, an explanation of the grace period preceding repayment, the option to pay accrued interest before it capitalizes, the right to request an annual credit report, and loan servicer contact information. It directs the Department of Education to maintain a consumer-tested online counseling tool that provides annual and exit counseling. The Institute of Education Sciences must study the impact and effectiveness of exit counseling, annual counseling, and the online counseling tool.

Bill Text

• Introduced Introduced in Senate Current html May 15, 2019

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill amends the annual financial aid counseling requirements for recipients of Federal Pell Grants and loans made under part D of the Higher Education Act.

• 20 U.S.C. 1092(l)

  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.--

  Introduces a new annual financial aid counseling requirement for institutions.

• 20 U.S.C. 1092(l)(1)(A)

  "(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.

  Requires institutions to provide comprehensive information about Pell Grants and loans to recipients.

• 20 U.S.C. 1092(l)(1)(A)(i)

  "(i) during a counseling session conducted in person;"

  Mandates in-person counseling sessions as an option for financial aid counseling.

• 20 U.S.C. 1092(l)(1)(A)(ii)

  "(ii) online, with the individual acknowledging receipt of the information;"

  Allows for financial aid information to be provided online with acknowledgment of receipt.

• 20 U.S.C. 1092(l)(1)(A)(iii)

  "(iii) through the use of the online counseling tool described in subsection (n)(1)(B)."

  Adds an additional method to provide financial aid information using an online tool.

• 20 U.S.C. 1092(l)(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 individual, using simple and understandable language and clear formatting."

  Requires non-tool using institutions to implement interactive programs for financial counseling.

• 20 U.S.C. 1092(l)(2)(A)

  "(A) An explanation of how the individual may budget for typical educational expenses and a sample budget based on the cost of attendance for the institution."

  Mandates budgeting explanations as part of the financial counseling.

• 20 U.S.C. 1092(l)(2)(B)

  "(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))."

  Informs individuals of their rights regarding annual disclosures from consumer reporting agencies.

• 20 U.S.C. 1092(l)(2)(C)

  "(C) Based on the most recent data available from the American Community Survey available from the Department of Commerce, the estimated average income and percentage of employment in the State of domicile of the individual for persons with--

  Provides data-driven income and employment information to individuals.

• 20 U.S.C. 1092(l)(3)

  "(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:..."

  Specifies additional information requirements for Pell Grant recipients.

Action History

1. May 15, 2019

   Introduced in Senate

2. May 15, 2019

   Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Sponsors

• Mark R. Warner · Primary

Subjects