Informed Student Borrowing Act of 2023

II 118TH CONGRESS 1ST SESSION S. 1970 To modify requirements relating to financial aid disclosures. IN THE SENATE OF THE UNITED STATES JUNE 14, 2023 Mr. DAINES (for himself, Mr. CASSIDY, Mrs. BLACKBURN, and Mrs. CAPITO) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To modify requirements relating to financial aid disclosures. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Informed Student Bor- 4 rowing Act of 2023’’. 5 SEC. 2. ENTRANCE COUNSELING FINANCIAL AID DISCLO- 6 SURES. 7 Section 485(l) of the Higher Education Act of 1965 8 (20 U.S.C. 1092(l)) is amended— 9 (1) in the subsection heading, by striking ‘‘EN- 10 TRANCE’’; 11 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1970 IS (2) in paragraph (1)(A)— 1 (A) in the matter preceding clause (i), by 2 striking ‘‘a disbursement to a first-time bor- 3 rower’’ and inserting ‘‘the first disbursement to 4 a borrower in each award year’’; and 5 (B) in the matter preceding subclause (I) 6 of paragraph clause (ii), by striking ‘‘may’’ and 7 inserting ‘‘shall’’; 8 (3) in paragraph (2)— 9 (A) by redesignating subparagraphs (A) 10 through (K) as subparagraphs (B) through (L); 11 (B) by inserting before subparagraph (B), 12 as so redesignated, the following: 13 ‘‘(A) An explanation that the borrower will 14 need to affirmatively determine and manually 15 enter, in accordance with subsection (n), the 16 Federal loan amount that the borrower will bor- 17 row (which may be equal to or less than the 18 Federal loan amount for which the borrower is 19 eligible) for each award year.’’; 20 (C) by striking subparagraph (G) and in- 21 serting the following: 22 ‘‘(G) Sample monthly repayment amounts, 23 under a standard repayment plan and under 24 the income-driven repayment plan that had the 25 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1970 IS highest enrollment in the previous year for bor- 1 rowers (excluding parent borrowers), based 2 on— 3 ‘‘(i)(I) the median levels of indebted- 4 ness, as appropriate, of— 5 ‘‘(aa) undergraduate borrowers of 6 Federal Direct Stafford Loans or 7 Federal Unsubsidized Stafford Loans 8 who were enrolled in the institution; 9 ‘‘(bb) graduate borrowers of Fed- 10 eral Direct Stafford Loans, Federal 11 Unsubsidized Stafford Loans, or Fed- 12 eral Direct Plus Loans who were en- 13 rolled in the institution; and 14 ‘‘(cc) parent borrowers of Federal 15 Direct Plus Loans made on behalf of 16 dependent students who were enrolled 17 at the institution; 18 ‘‘(II) the median cumulative indebted- 19 ness of borrowers of loans described in 20 subclause (I) in the same program as the 21 borrower at the same institution; and 22 ‘‘(ii) the median annual earnings for 23 individuals who attended the institution, as 24 described in subparagraph (N).’’; and 25 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1970 IS (D) by adding at the end the following: 1 ‘‘(M) A statement that the borrower does 2 not have to accept the full amount of loans for 3 which the borrower is eligible, and an expla- 4 nation that loan eligibility calculations are de- 5 termined based on a cost of attendance that 6 may include expenses such as housing, food, 7 and transportation. 8 ‘‘(N) The most recent College Scorecard 9 information (or information from a similar suc- 10 cessor website) that shows the median annual 11 earnings of students who received Federal stu- 12 dent aid and who are no longer enrolled at the 13 institution and are working, at the time that is 14 10 years after the date of such students’ entry 15 to the institution— 16 ‘‘(i) for individuals who were enrolled 17 in the institution; and 18 ‘‘(ii) if available through the College 19 Scorecard (or similar successor website), 20 for individuals who were enrolled in the 21 borrower’s undergraduate or graduate pro- 22 gram. 23 ‘‘(O) The percentage of borrowers who at- 24 tended the institution and have completed or 25 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1970 IS are no longer enrolled that are in active repay- 1 ment (as compared to all borrowers who at- 2 tended the institution and have completed or 3 are no longer enrolled). 4 ‘‘(P) For undergraduate borrowers, the 5 completion rate of the institution, as available 6 through the College Scorecard (or similar suc- 7 cessor website), for the most recent year for 8 which data are available. 9 ‘‘(Q) A statement that— 10 ‘‘(i) the statistics provided under this 11 paragraph are averages and median values 12 based on past years; 13 ‘‘(ii) the borrower’s repayment 14 amounts, median earnings, and likelihood 15 of completion may vary from such statis- 16 tics; and 17 ‘‘(iii) as appropriate, parent borrowers 18 should be aware that information about 19 the median earnings, completion rate, and 20 percentage of borrowers in active repay- 21 ment is based on data that excludes parent 22 borrowers. 23 ‘‘(R) A statement in writing and in a form 24 the borrower may keep, of the annual percent- 25 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1970 IS age rate applicable to the loan based on a 10 1 year standard repayment plan, taking into ac- 2 count— 3 ‘‘(i) the amount of the loan; 4 ‘‘(ii) the stated interest rate of the 5 loan; 6 ‘‘(iii) the standard term for a loan of 7 the same type; 8 ‘‘(iv) any fees or additional costs asso- 9 ciated with the loan; and 10 ‘‘(v) any capitalization of interest on 11 the loan.’’; and 12 (4) by adding at the end the following: 13 ‘‘(3) INFORMATION FROM THE DEPARTMENT OF 14 EDUCATION.—The Secretary shall provide institu- 15 tions with the data and statistics necessary to enable 16 institutions to carry out this subsection.’’. 17 SEC. 3. ANNUAL REQUIREMENT TO MANUALLY ENTER 18 LOAN AMOUNT. 19 Section 485 of the Higher Education Act of 1965 (20 20 U.S.C. 1092), as amended by section 2, is further amend- 21 ed by adding at the end the following: 22 ‘‘(n) ANNUAL REQUIREMENT TO MANUALLY ENTER 23 LOAN AMOUNT.— 24 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1970 IS ‘‘(1) IN GENERAL.—In addition to the other re- 1 quirements of this section and in accordance with 2 paragraph (2), each eligible institution shall ensure 3 that, for each award year, each borrower enrolled in 4 the institution who receives a Federal Direct Loan 5 (other than a Federal Direct Consolidation Loan) 6 and each parent borrower who is borrowing a Fed- 7 eral Direct PLUS Loan made on behalf of a student 8 who is enrolled in the institution, for such year, shall 9 manually enter, either in writing or through elec- 10 tronic means, the exact dollar amount of Federal Di- 11 rect Loan funding that such borrower desires to bor- 12 row for such year. 13 ‘‘(2) METHOD.—The eligible institution shall 14 ensure that the borrower carries out the activity de- 15 scribed in paragraph (1)— 16 ‘‘(A) in the case of a student borrower, in 17 the course of the process used by the institution 18 for students to accept a student loan award; 19 ‘‘(B) prior to the institution certifying a 20 Federal Direct Loan (other than a Federal Di- 21 rect Consolidation Loan), including a Federal 22 Direct PLUS Loan made on behalf of a stu- 23 dent, for disbursement to a borrower; and 24 VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1970 IS ‘‘(C) in the case of a student borrower, 1 after ensuring that the student has completed 2 all of the counseling requirements under sub- 3 section (l).’’. 4 SEC. 4. WORK STUDY. 5 Section 485 of the Higher Education Act of 1965 (20 6 U.S.C. 1092), as amended by sections 2 and 3, is further 7 amended by adding at the end the following: 8 ‘‘(n) WORK STUDY.—If an institution provides a stu- 9 dent or a prospective student with a financial aid award 10 notification that includes work study, the institution shall 11 ensure that the notification includes an explanation that 12 any work study funds are not directly awarded to the stu- 13 dent or institution, and such amounts must be earned 14 through the student’s completion of work over time.’’. 15 Æ VerDate Sep 11 2014 02:10 Jul 07, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S1970.IS S1970 kjohnson on DSK79L0C42PROD with BILLS