S 1628 — Know Before You Owe Federal Student Loan Act of 2017

(a) Required disclosure before disbursement Each eligible lender, at or prior to the time such lender disburses a loan that is insured or guaranteed under this part (other than a loan made under section 1078–3 of this title), shall provide thorough and accurate loan information on such loan to the borrower in simple and understandable terms. Any disclosure required by this subsection may be made by an eligible lender by written or electronic means, including as part of the application material provided to the borrower, as part of the promissory note evidencing the loan, or on a separate written form provided to the borrower. Each lender shall provide to each borrower a telephone number, and may provide an electronic address, through which additional loan information can be obtained. The disclosure shall include— (1) a statement prominently and clearly displayed and in bold print that the borrower is receiving a loan that must be repaid; (2) the name of the eligible lender, and the address to which communications and payments should be sent; (3) the principal amount of the loan; (4) the amount of any charges, such as the origination fee and Federal default fee, and whether those fees will be— (A) collected by the lender at or prior to the disbursal of the loan; (B) deducted from the proceeds of the loan; (C) paid separately by the borrower; or (D) paid by the lender; (5) the stated interest rate on the loan; (6) for loans made under section 1078–8 of this title or to a student borrower under section 1078–2 of this title, an explanation— (A) that the borrower has the option to pay the interest that accrues on the loan while the borrower is a student at an institution of higher education; and (B) if the borrower does not pay such interest while attending an institution, when and how often interest on the loan will be capitalized; (7) for loans made to a parent borrower on behalf of a student under section 1078–2 of this title, an explanation— (A) that the parent has the option to defer payment on the loan while the student is enrolled on at least a half-time basis in an institution of higher education; (B) if the parent does not pay the interest on the loan while the student is enrolled in an institution, when and how often interest on the loan will be capitalized; and (C) that the parent may be eligible for a deferment on the loan if the parent is enrolled on at least a half-time basis in an institution of higher education; (8) the yearly and cumulative maximum amounts that may be borrowed; (9) a statement of the total cumulative balance, including the loan being disbursed, owed by the borrower to that lender, and an estimate of the projected monthly payment, given such cumulative balance; (10) an explanation of when repayment of the loan will be required and when the borrower will be obligated to pay interest that accrues on the loan; (11) a description of the types of repayment plans that are available for the loan; (12) a statement as to the minimum and maximum repayment terms which the lender may impose, and the minimum annual payment required by law; (13) an explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan; (14) a statement that the borrower has the right to prepay all or part of the loan, at any time, without penalty; (15) a statement summarizing circumstances in which repayment of the loan or interest that accrues on the loan may be deferred; (16) a statement summarizing the circumstances in which a borrower may obtain forbearance on the loan; (17) a description of the options available for forgiveness of the loan, and the requirements to obtain loan forgiveness; (18) a definition of default and the consequences to the borrower if the borrower defaults, including a statement that the default will be reported to a consumer reporting agency; and (19) an explanation of any cost the borrower may incur during repayment or in the collection of the loan, includin...

(a) Information dissemination activities (1) Each eligible institution participating in any program under this subchapter shall carry out information dissemination activities for prospective and enrolled students (including those attending or planning to attend less than full time) regarding the institution and all financial assistance under this subchapter. The information required by this section shall be produced and be made readily available upon request, through appropriate publications, mailings, and electronic media, to an enrolled student and to any prospective student. Each eligible institution shall, on an annual basis, provide to all enrolled students a list of the information that is required to be provided by institutions to students by this section and section 444 of the General Education Provisions Act [20 U.S.C. 1232g] (commonly known as the “Family Educational Rights and Privacy Act of 1974”), together with a statement of the procedures required to obtain such information. The information required by this section shall accurately describe— (A) the student financial assistance programs available to students who enroll at such institution; (B) the methods by which such assistance is distributed among student recipients who enroll at such institution; (C) any means, including forms, by which application for student financial assistance is made and requirements for accurately preparing such application; (D) the rights and responsibilities of students receiving financial assistance under this subchapter; (E) the cost of attending the institution, including (i) tuition and fees, (ii) books and supplies, (iii) estimates of typical student room and board costs or typical commuting costs, and (iv) any additional cost of the program in which the student is enrolled or expresses a specific interest; (F) a statement of— (i) the requirements of any refund policy with which the institution is required to comply; (ii) the requirements under section 1091b of this title for the return of grant or loan assistance provided under this subchapter; and (iii) the requirements for officially withdrawing from the institution; (G) the academic program of the institution, including (i) the current degree programs and other educational and training programs, (ii) the instructional, laboratory, and other physical plant facilities which relate to the academic program, (iii) the faculty and other instructional personnel, and (iv) any plans by the institution for improving the academic program of the institution; (H) each person designated under subsection (c) of this section, and the methods by which and locations in which any person so designated may be contacted by students and prospective students who are seeking information required by this subsection; (I) special facilities and services available to students with disabilities; (J) the names of associations, agencies, or governmental bodies which accredit, approve, or license the institution and its programs, and the procedures under which any current or prospective student may obtain or review upon request a copy of the documents describing the institution’s accreditation, approval, or licensing; (K) the standards which the student must maintain in order to be considered to be making satisfactory progress, pursuant to section 1091(a)(2) of this title; (L) the completion or graduation rate of certificate- or degree-seeking, full-time, undergraduate students entering such institutions; (M) the terms and conditions of the loans that students receive under parts B, D, and E; (N) that enrollment in a program of study abroad approved for credit by the home institution may be considered enrollment in the home institution for purposes of applying for Federal student financial assistance; (O) the campus crime report prepared by the institution pursuant to subsection (f), including all required reporting categories; (P) institutional policies and sanctions related to copyright infringement, i...

(a) Required for programs of assistance; contents In order to be an eligible institution for the purposes of any program authorized under this subchapter, an institution must be an institution of higher education or an eligible institution (as that term is defined for the purpose of that program) and shall, except with respect to a program under subpart 4 of part A, enter into a program participation agreement with the Secretary. The agreement shall condition the initial and continuing eligibility of an institution to participate in a program upon compliance with the following requirements: (1) The institution will use funds received by it for any program under this subchapter and any interest or other earnings thereon solely for the purpose specified in and in accordance with the provision of that program. (2) The institution shall not charge any student a fee for processing or handling any application, form, or data required to determine the student’s eligibility for assistance under this subchapter or the amount of such assistance. (3) The institution will establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under this subchapter, together with assurances that the institution will provide, upon request and in a timely fashion, information relating to the administrative capability and financial responsibility of the institution to— (A) the Secretary; (B) the appropriate guaranty agency; and (C) the appropriate accrediting agency or association. (4) The institution will comply with the provisions of subsection (c) of this section and the regulations prescribed under that subsection, relating to fiscal eligibility. (5) The institution will submit reports to the Secretary and, in the case of an institution participating in a program under part B or part E, to holders of loans made to the institution’s students under such parts at such times and containing such information as the Secretary may reasonably require to carry out the purpose of this subchapter. (6) The institution will not provide any student with any statement or certification to any lender under part B that qualifies the student for a loan or loans in excess of the amount that student is eligible to borrow in accordance with sections 1075(a), 1078(a)(2), and 1078(b)(1)(A) and (B) of this title. (7) The institution will comply with the requirements of section 1092 of this title. (8) In the case of an institution that advertises job placement rates as a means of attracting students to enroll in the institution, the institution will make available to prospective students, at or before the time of application (A) the most recent available data concerning employment statistics, graduation statistics, and any other information necessary to substantiate the truthfulness of the advertisements, and (B) relevant State licensing requirements of the State in which such institution is located for any job for which the course of instruction is designed to prepare such prospective students. (9) In the case of an institution participating in a program under part B or D, the institution will inform all eligible borrowers enrolled in the institution about the availability and eligibility of such borrowers for State grant assistance from the State in which the institution is located, and will inform such borrowers from another State of the source for further information concerning such assistance from that State. (10) The institution certifies that it has in operation a drug abuse prevention program that is determined by the institution to be accessible to any officer, employee, or student at the institution. (11) In the case of any institution whose students receive financial assistance pursuant to section 1091(d) of this title, the institution will make available to such students a program proven successful in assisting students in obtai...

(a) Quality Assurance Program (1) In general The Secretary is authorized to select institutions for voluntary participation in a Quality Assurance Program that provides participating institutions with an alternative management approach through which individual schools develop and implement their own comprehensive systems, related to processing and disbursement of student financial aid, verification of student financial aid application data, and entrance and exit interviews, thereby enhancing program integrity within the student aid delivery system. (2) Criteria and consideration The Quality Assurance Program authorized by this section shall be based on criteria that include demonstrated institutional performance, as determined by the Secretary, and shall take into consideration current quality assurance goals, as determined by the Secretary. The selection criteria shall ensure the participation of a diverse group of institutions of higher education with respect to size, mission, and geographical distribution. (3) Waiver The Secretary is authorized to waive for any institution participating in the Quality Assurance Program any regulations dealing with reporting or verification requirements in this subchapter that are addressed by the institution’s alternative management system, and may substitute such quality assurance reporting as the Secretary determines necessary to ensure accountability and compliance with the purposes of the programs under this subchapter. The Secretary shall not modify or waive any statutory requirements pursuant to this paragraph. (4) Determination The Secretary is authorized to determine— (A) when an institution that is unable to administer the Quality Assurance Program shall be removed from such program; and (B) when institutions desiring to cease participation in such program will be required to complete the current award year under the requirements of the Quality Assurance Program. (5) Review and evaluation The Secretary shall review and evaluate the Quality Assurance Program conducted by each participating institution and, on the basis of that evaluation, make recommendations regarding amendments to this chapter that will streamline the administration and enhance the integrity of Federal student assistance programs. Such recommendations shall be submitted to the authorizing committees. (b) Regulatory improvement and streamlining experiments (1) In general The Secretary shall continue the voluntary participation of any experimental sites in existence as of July 1, 2007, unless the Secretary determines that such site’s participation has not been successful in carrying out the purposes of this section. Any experimental sites approved by the Secretary prior to such date that have not been successful in carrying out the purposes of this section shall be discontinued not later than June 30, 2010. (2) Report The Secretary shall review and evaluate the experience of institutions participating as experimental sites and shall, on a biennial basis, submit a report based on the review and evaluation to the authorizing committees. Such report shall include— (A) a list of participating institutions and the specific statutory or regulatory waivers granted to each institution; (B) the findings and conclusions reached regarding each of the experiments conducted; and (C) recommendations for amendments to improve and streamline this chapter, based on the results of the experiment. (3) Selection (A) In general The Secretary is authorized to periodically select a limited number of additional institutions for voluntary participation as experimental sites to provide recommendations to the Secretary on the impact and effectiveness of proposed regulations or new management initiatives. (B) Waivers The Secretary is authorized to waive, for any institution participating as an experimental site under subparagraph (A), any requirements in this subchapter, including requirements related to the award process and disbursement o...