S 2894 PCSCommentsClose CommentsPermalink

To establish requirements for private lenders to protect student borrowers receiving private educational loans, and for other purposes.CommentsClose CommentsPermalink

April 21, 2008

Mr. DODD, from the Committee on Banking, Housing, and Urban Affairs, reported the following original bill; which was read twice and placed on the calendarCommentsClose CommentsPermalink

To establish requirements for private lenders to protect student borrowers receiving private educational loans, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Private Student Loan Transparency and Improvement Act of 2007'.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Definitions.CommentsClose CommentsPermalink





Sec. 3. Regulations.CommentsClose CommentsPermalink





Sec. 4. Effective dates.CommentsClose CommentsPermalink

TITLE I--PREVENTING UNFAIR AND DECEPTIVE PRIVATE EDUCATIONAL LENDING PRACTICES AND ELIMINATING CONFLICTS OF INTEREST

Sec. 101. Amendment to the Truth in Lending Act.CommentsClose CommentsPermalink





Sec. 102. Civil liability.CommentsClose CommentsPermalink





Sec. 103. Clerical amendment.CommentsClose CommentsPermalink

TITLE II--IMPROVED DISCLOSURES FOR PRIVATE EDUCATIONAL LOANS

Sec. 201. Private educational loan disclosures and limitations.CommentsClose CommentsPermalink





Sec. 202. Application of Truth in Lending Act to all private educational loans.CommentsClose CommentsPermalink

TITLE III--COLLEGE AFFORDABILITY

Sec. 301. Community Reinvestment Act credit for low-cost loans.CommentsClose CommentsPermalink

TITLE IV--FINANCIAL LITERACY

Sec. 401. Coordinated education efforts.CommentsClose CommentsPermalink

TITLE V--STUDY AND REPORT ON NONINDIVIDUAL INFORMATION

Sec. 501. Study and report on nonindividual information.CommentsClose CommentsPermalink

SEC. 2. DEFINITIONS.

As used in this Act--CommentsClose CommentsPermalink





(1) the term `Board' means the Board of Governors of the Federal Reserve System;CommentsClose CommentsPermalink





(2) the term `covered educational institution'--CommentsClose CommentsPermalink





(A) means any educational institution that offers a postsecondary educational degree, certificate, or program of study (including any institution of higher education); andCommentsClose CommentsPermalink





(B) includes an agent or employee of the educational institution;CommentsClose CommentsPermalink





(3) the terms `Federal banking agencies' and `appropriate Federal banking agency' have the same meanings as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);CommentsClose CommentsPermalink





(4) the term `institution of higher education' has the same meaning as in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);CommentsClose CommentsPermalink





(5) the term `postsecondary educational expenses' means any of the expenses that are included as part of the cost of attendance of a student, as defined under section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll);CommentsClose CommentsPermalink





(6) the term `private educational lender' means--CommentsClose CommentsPermalink





(A) a financial institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) that solicits, makes, or extends private educational loans;CommentsClose CommentsPermalink





(B) a Federal credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752) that solicits, makes, or extends private educational loans; andCommentsClose CommentsPermalink





(C) any other person engaged in the business of soliciting, making, or extending private educational loans; andCommentsClose CommentsPermalink





(7) the term `private educational loan'--CommentsClose CommentsPermalink





(A) means a loan provided by a private educational lender that--CommentsClose CommentsPermalink





(i) is not made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); andCommentsClose CommentsPermalink





(ii) is issued by a private educational lender expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the lender; andCommentsClose CommentsPermalink





(B) does not include an extension of credit under an open end consumer credit plan, a residential mortgage transaction (as those terms are defined in section 103 of the Truth in Lending Act), or any other loan that is secured by real property or a dwelling.CommentsClose CommentsPermalink

SEC. 3. REGULATIONS.

The Board shall issue final regulations to implement this Act and the amendments made by this Act not later than 180 days after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. EFFECTIVE DATES.

This Act and the amendments made by this Act shall become effective 180 days after the date on which regulations to carry out this Act and the amendments made by this Act are issued in final form.CommentsClose CommentsPermalink

TITLE I--PREVENTING UNFAIR AND DECEPTIVE PRIVATE EDUCATIONAL LENDING PRACTICES AND ELIMINATING CONFLICTS OF INTEREST

SEC. 101. AMENDMENT TO THE TRUTH IN LENDING ACT.

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

`Sec. 140. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest

`(a) Definitions- As used in this section--CommentsClose CommentsPermalink





`(1) the term `covered educational institution'--CommentsClose CommentsPermalink





`(A) means any educational institution that offers a postsecondary educational degree, certificate, or program of study (including any institution of higher education); andCommentsClose CommentsPermalink





`(B) includes an agent or employee of the educational institution;CommentsClose CommentsPermalink





`(2) the term `gift'--CommentsClose CommentsPermalink





`(A) means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than $10, including a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred; andCommentsClose CommentsPermalink





`(B) does not include--CommentsClose CommentsPermalink





`(i) standard informational material related to a loan (such as a brochure);CommentsClose CommentsPermalink





`(ii) food, refreshments, training, or informational material furnished to an employee or agent of a covered educational institution, as an integral part of a training session or through participation in an advisory council that is designed to improve the service of the lender to the covered educational institution, if such training or participation contributes to the professional development of the employee or agent of the covered educational institution; orCommentsClose CommentsPermalink





`(iii) favorable terms, conditions, and borrower benefits on an educational loan provided to a student employed by the covered educational institution;CommentsClose CommentsPermalink





`(3) the term `institution of higher education' has the same meaning as in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);CommentsClose CommentsPermalink





`(4) the term `postsecondary educational expenses' means any of the expenses that are included as part of the cost of attendance of a student, as defined under section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll);CommentsClose CommentsPermalink





`(5) the term `private educational lender' means--CommentsClose CommentsPermalink





`(A) a financial institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) that solicits, makes, or extends private educational loans;CommentsClose CommentsPermalink





`(B) a Federal credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752) that solicits, makes, or extends private educational loans; andCommentsClose CommentsPermalink





`(C) any other person engaged in the business of soliciting, making, or extending private educational loans;CommentsClose CommentsPermalink





`(6) the term `private educational loan'--CommentsClose CommentsPermalink





`(A) means a loan provided by a private educational lender that--CommentsClose CommentsPermalink





`(i) is not made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); andCommentsClose CommentsPermalink





`(ii) is issued by a private educational lender expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the lender; andCommentsClose CommentsPermalink





`(B) does not include an extension of credit under an open end consumer credit plan, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling; andCommentsClose CommentsPermalink





`(7) the term `revenue sharing' means an arrangement between a covered educational institution and a private educational lender under which--CommentsClose CommentsPermalink





`(A) a private educational lender provides or issues private educational loans to students attending the covered educational institution or to the parents of such students;CommentsClose CommentsPermalink





`(B) the covered educational institution recommends to students or others the private educational lender or the private educational loans of the private educational lender; andCommentsClose CommentsPermalink





`(C) the private educational lender pays a fee or provides other material benefits, including profit or revenue sharing, to the covered educational institution or to the officers, employees, or agents of the covered educational institution in connection with the private educational loans provided to students attending the covered educational institution or a borrower acting on behalf of a student.CommentsClose CommentsPermalink





`(b) Prohibition on Certain Gifts and Arrangements- A private educational lender, including any officer or employee thereof, may not, directly or indirectly--CommentsClose CommentsPermalink





`(1) offer or provide any gift to a covered educational institution or a covered educational institution employee, nor may such covered educational institution, officer, or employee receive any such gift, in exchange for any advantage or consideration provided to such private educational lender related to its private educational loan activities; orCommentsClose CommentsPermalink





`(2) engage in revenue sharing with a covered educational institution.CommentsClose CommentsPermalink





`(c) Prohibition on Co-Branding- A private educational lender may not use the name, emblem, mascot, or logo of the covered educational institution, or other words, pictures, or symbols readily identified with the covered educational institution, in the marketing of private educational loans in any way that implies that the covered educational institution endorses the private educational loans offered by the lender.CommentsClose CommentsPermalink





`(d) Advisory Board Compensation- Any person who is employed in the financial aid office of a covered educational institution, or who otherwise has responsibilities with respect to private educational loans or other financial aid of the institution, and who serves on an advisory board, commission, or group established by a private educational lender or group of such lenders shall be prohibited from receiving anything of value from the private educational lender or group of lenders. Nothing in this subsection shall prohibit the reimbursement of reasonable expenses incurred by an employee of a covered educational institution as part of their service on an advisory board, commission, or group described in this subsection, subject to the rules of the Board.CommentsClose CommentsPermalink





`(e) Prohibition on Prepayment or Repayment Fees or Penalty- It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower, directly or indirectly, for early repayment or prepayment, of any private educational loan.'.CommentsClose CommentsPermalink

SEC. 102. CIVIL LIABILITY.

Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraph (3), by inserting `or section 128(e)(6)' after `section 125'; andCommentsClose CommentsPermalink





(B) in the fourth sentence of the undesignated matter at the end--CommentsClose CommentsPermalink





(i) by striking `125 or' and inserting `125,'; andCommentsClose CommentsPermalink





(ii) by inserting `or of section 128(e),' before `or for failing'; andCommentsClose CommentsPermalink





(2) in subsection (e), by inserting before the first period, the following: `or, in the case of a violation involving a private educational loan, 1 year from the date on which the first regular payment of principal is due under the loan'.CommentsClose CommentsPermalink

SEC. 103. CLERICAL AMENDMENT.

The table of sections for chapter 2 of title I of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink





`140. Preventing unfair and deceptive private educational lending practices and eliminating conflicts of interest.'.CommentsClose CommentsPermalink

TITLE II--IMPROVED DISCLOSURES FOR PRIVATE EDUCATIONAL LOANS

SEC. 201. PRIVATE EDUCATIONAL LOAN DISCLOSURES AND LIMITATIONS.

Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended by adding at the end the following:CommentsClose CommentsPermalink





`(e) Terms and Disclosure With Respect to Private Educational Loans-CommentsClose CommentsPermalink





`(1) DISCLOSURES REQUIRED IN PRIVATE EDUCATIONAL LOAN APPLICATIONS AND SOLICITATIONS- In any application for a private educational loan, or a solicitation for a private educational loan without requiring an application, the lender shall disclose to the borrower, clearly and conspicuously--CommentsClose CommentsPermalink





`(A) the potential range of rates of interest applicable to the private educational loan;CommentsClose CommentsPermalink





`(B) whether the rate of interest applicable to the private educational loan is fixed or variable;CommentsClose CommentsPermalink





`(C) limitations on interest rate adjustments, both in terms of frequency and amount, or the lack thereof;CommentsClose CommentsPermalink





`(D) requirements for a co-borrower, including any changes in the applicable interest rates without a co-borrower;CommentsClose CommentsPermalink





`(E) potential finance charges, late fees, penalties, and adjustments to principal, based on defaults or late payments of the borrower;CommentsClose CommentsPermalink





`(F) fees or range of fees applicable to the private educational loan;CommentsClose CommentsPermalink





`(G) the term of the private educational loan;CommentsClose CommentsPermalink





`(H) whether interest will accrue while the student to whom the private educational loan relates is enrolled at an institution of higher education;CommentsClose CommentsPermalink





`(I) payment deferral options, including whether the deferment would apply to interest or principal, or both;CommentsClose CommentsPermalink





`(J) general eligibility criteria for the private educational loan;CommentsClose CommentsPermalink





`(K) an example of the total cost of the private educational loan over the life of the loan--CommentsClose CommentsPermalink





`(i) which shall be calculated using the principal amount and the maximum rate of interest actually offered by the lender; andCommentsClose CommentsPermalink





`(ii) calculated both with and without capitalization of interest, if that is an option for postponing interest payments;CommentsClose CommentsPermalink





`(L) a statement that an institution of higher education may have school-specific educational loan benefits and terms not detailed on the disclosure form;CommentsClose CommentsPermalink





`(M) that the borrower may qualify for Federal financial assistance through a program under title IV of the Higher Education Act of 1965, in lieu of, or in addition to, a loan from a non-Federal source;CommentsClose CommentsPermalink





`(N) the interest rates available with respect to such Federal financial assistance through a program under title IV of the Higher Education Act of 1965;CommentsClose CommentsPermalink





`(O) that, as provided in paragraph (5)--CommentsClose CommentsPermalink





`(i) the borrower shall have up to 30 calendar days following the date on which the application for the private educational loan is approved and the borrower receives the disclosure documents required under this subsection for the loan to accept the terms of the private educational loan and consummate the transaction; andCommentsClose CommentsPermalink





`(ii) except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the lender during that 30-day period; andCommentsClose CommentsPermalink





`(P) such other information as the Board shall prescribe, by rule, as necessary or appropriate for consumers to make informed borrowing decisions.CommentsClose CommentsPermalink





`(2) DISCLOSURES AT THE TIME OF PRIVATE EDUCATIONAL LOAN APPROVAL- Subject to the rules of the Board, contemporaneously with the approval of a private educational loan application, and before the loan transaction is consummated, the lender shall disclose to the borrower, clearly and conspicuously--CommentsClose CommentsPermalink





`(A) the applicable rate of interest in effect on the date of approval;CommentsClose CommentsPermalink





`(B) whether the rate of interest applicable to the private educational loan is fixed or variable;CommentsClose CommentsPermalink





`(C) limitations on interest rate adjustments, both in terms of frequency and amount, or the lack thereof;CommentsClose CommentsPermalink





`(D) the initial approved principal amount;CommentsClose CommentsPermalink





`(E) applicable finance charges, late fees, penalties, and adjustments to principal, based upon borrower defaults or late payments;CommentsClose CommentsPermalink





`(F) the maximum term under the private educational loan program;CommentsClose CommentsPermalink





`(G) an estimate of the total amount for repayment, at both the interest rate in effect on the date of approval and at the maximum possible rate of interest actually offered by the lender, to the extent that such maximum rate may be determined, or if not, a good faith estimate thereof;CommentsClose CommentsPermalink





`(H) any principal and interest payments required while the student to whom the private educational loan relates is enrolled at an institution of higher education and interest which will accrue during such enrollment;CommentsClose CommentsPermalink





`(I) payment deferral options, including whether the deferment would apply to interest or principal, or both;CommentsClose CommentsPermalink





`(J) whether monthly payments are graduated;CommentsClose CommentsPermalink





`(K) that, as provided in paragraph (5)--CommentsClose CommentsPermalink





`(i) the borrower shall have up to 30 calendar days following the date on which the application for the private educational loan is approved and the borrower receives the disclosure documents required under this subsection for the loan to accept the terms of the private educational loan and consummate the transaction; andCommentsClose CommentsPermalink





`(ii) except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the lender during that 30-day period;CommentsClose CommentsPermalink





`(L) that the borrower may qualify for Federal financial assistance through a program under title IV of the Higher Education Act of 1965, in lieu of, or in addition to, a loan from a non-Federal source;CommentsClose CommentsPermalink





`(M) the interest rates available with respect to such Federal financial assistance through a program under title IV of the Higher Education Act of 1965;CommentsClose CommentsPermalink





`(N) the maximum monthly payment, calculated using the maximum rate of interest actually offered by the lender, to the extent that such maximum rate may be determined, or if not, a good faith estimate thereof; andCommentsClose CommentsPermalink





`(O) such other information as the Board shall prescribe, by rule, as necessary or appropriate for consumers to make informed borrowing decisions.CommentsClose CommentsPermalink





`(3) DISCLOSURES AT THE TIME OF PRIVATE EDUCATIONAL LOAN CONSUMMATION- Subject to the rules of the Board, contemporaneously with the consummation of a private educational loan, the lender shall make each of the disclosures described in subparagraphs (A) through (J) and (L) through (O) of paragraph (2) to the borrower.CommentsClose CommentsPermalink





`(4) FORMAT OF DISCLOSURES- Disclosures required under paragraphs (1), (2), and (3) shall appear in a clearly legible, uniform format, subject to section 122(c).CommentsClose CommentsPermalink





`(5) EFFECTIVE PERIOD OF APPROVED RATE OF INTEREST AND LOAN TERMS-CommentsClose CommentsPermalink





`(A) IN GENERAL- With respect to a private educational loan, the borrower shall have the right to accept the terms of the loan and consummate the transaction at any time within 30 calendar days following the date on which the application for the private educational loan is approved and the borrower receives the disclosure documents required under this subsection for the loan, and the rates and terms of the loan may not be changed by the lender during that period, subject to the rules of the Board.CommentsClose CommentsPermalink





`(B) PROHIBITION ON CHANGES- Except for changes based on adjustments to the index used for a loan, the rates and terms of the loan may not be changed by the lender prior to the earlier of--CommentsClose CommentsPermalink





`(i) the date of acceptance of the terms of the loan and consummation of the transaction by the borrower, as described in subparagraph (A); orCommentsClose CommentsPermalink





`(ii) the expiration of the 30-day period referred to in subparagraph (A).CommentsClose CommentsPermalink





`(C) PROHIBITION ON DISBURSEMENT- No funds may be disbursed with respect to a private educational loan until acceptance of the loan by the borrower under subparagraph (A) and the expiration of the 3-day period under paragraph (6).CommentsClose CommentsPermalink





`(6) RIGHT TO CANCEL- With respect to a private educational loan, the borrower may cancel the loan, without penalty to the borrower, at any time within 3 business days of the date on which the loan is consummated, subject to the rules of the Board. No funds may be transferred to the borrower during that 3-day period.CommentsClose CommentsPermalink





`(7) DEFINITIONS- For purposes of this subsection--CommentsClose CommentsPermalink





`(A) the term `institution of higher education' has the same meaning as in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);CommentsClose CommentsPermalink





`(B) the term `private educational lender' means--CommentsClose CommentsPermalink





`(i) a financial institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) that solicits, makes, or extends private educational loans;CommentsClose CommentsPermalink





`(ii) a Federal credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752) that solicits, makes, or extends private educational loans; andCommentsClose CommentsPermalink





`(iii) any other person engaged in the business of soliciting, making, or extending private educational loans; andCommentsClose CommentsPermalink





`(C) the term `private educational loan'--CommentsClose CommentsPermalink





`(i) means a loan provided by a private educational lender that--CommentsClose CommentsPermalink





`(I) is not made, insured, or guaranteed under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); andCommentsClose CommentsPermalink





`(II) is issued by a private educational lender expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the lender; andCommentsClose CommentsPermalink





`(ii) does not include an extension of credit under an open end consumer credit plan, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling.'.CommentsClose CommentsPermalink

SEC. 202. APPLICATION OF TRUTH IN LENDING ACT TO ALL PRIVATE EDUCATIONAL LOANS.

Section 104(3) of the Truth in Lending Act (15 U.S.C. 1603(3)) is amended by inserting `and other than private educational loans (as that term is defined in section 140(a))' after `consumer'.CommentsClose CommentsPermalink

TITLE III--COLLEGE AFFORDABILITY

SEC. 301. COMMUNITY REINVESTMENT ACT CREDIT FOR LOW-COST LOANS.

(a) In General- The appropriate Federal financial supervisory agency shall give a private educational lender credit toward meeting the credit needs of its community for purposes of the Community Reinvestment Act of 1977, for making low-cost private educational loans to low-income borrowers.CommentsClose CommentsPermalink





(b) Regulations- The Board shall develop regulations determining which private educational loans are available for the credit under this section.CommentsClose CommentsPermalink





(c) Definition- As used in this section, the term `appropriate Federal financial supervisory agency' has the same meaning as in section 803 of the Community Reinvestment Act of 1977 (12 U.S.C. 2902).CommentsClose CommentsPermalink

TITLE IV--FINANCIAL LITERACY

SEC. 401. COORDINATED EDUCATION EFFORTS.

(a) In General- The Secretary of the Treasury (in this section referred to as the `Secretary'), in coordination with the Secretary of Education, the Secretary of Agriculture (with respect to land grant covered educational institutions), and any other appropriate agency that is a member of the Financial Literacy and Education Commission established under the Financial Literacy and Education Improvement Act (20 U.S.C. 9701 et seq.), shall seek to enhance financial literacy among students at institutions of higher education through--CommentsClose CommentsPermalink





(1) the development of initiatives, programs, and curricula that improve student awareness of the short- and long-term costs associated with educational loans and other debt assumed while in college, their repayment obligations, and their rights as borrowers; andCommentsClose CommentsPermalink





(2) assisting such students in navigating the financial aid process.CommentsClose CommentsPermalink





(b) Duties- For purposes of this section, the Secretary, working in conjunction with the Secretary of Education, the Secretary of Agriculture, and the Financial Literacy and Education Commission, shall--CommentsClose CommentsPermalink





(1) identify programs that promote or enhance financial literacy for college students, with specific emphasis on programs that impart the knowledge and ability for students to best navigate the financial aid process, including those that involve partnerships between nonprofit organizations, colleges and universities, State and local governments, and student organizations;CommentsClose CommentsPermalink





(2) evaluate the effectiveness of such programs in terms of measured results, including positive behavioral change among college students;CommentsClose CommentsPermalink





(3) promote the programs identified as being the most effective; andCommentsClose CommentsPermalink





(4) encourage institutions of higher education to implement financial education programs for their students, including those that have the highest evaluations.CommentsClose CommentsPermalink





(c) Report-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 2 years after the date of enactment of this Act, the Financial Literacy and Education Commission shall submit a report to Congress on the state of financial education among students at institutions of higher education.CommentsClose CommentsPermalink





(2) CONTENT- The report required by this subsection shall include a description of progress made in enhancing financial education with respect to student understanding of financial aid, including the programs and evaluations required by this section.CommentsClose CommentsPermalink





(3) APPEARANCE BEFORE CONGRESS- The Secretary shall, upon request, provide testimony before the Committee on Banking, Housing, and Urban Affairs of the Senate concerning the report required by this subsection.CommentsClose CommentsPermalink

TITLE V--STUDY AND REPORT ON NONINDIVIDUAL INFORMATION

SEC. 501. STUDY AND REPORT ON NONINDIVIDUAL INFORMATION.

(a) Study- The Comptroller General of the United States (in this section referred to as the `Comptroller') conduct a study--CommentsClose CommentsPermalink





(1) on the impact on and benefits to borrowers of the inclusion of nonindividual factors, including cohort default rate, accreditation, and graduation rate at institutions of higher education, used in the underwriting criteria to determine the pricing of private educational loans;CommentsClose CommentsPermalink





(2) to examine whether and to what extent the inclusion of such nonindividual factors--CommentsClose CommentsPermalink





(A) increases access to private educational loans for borrowers who lack credit history or results in less favorable rates for such borrowers; andCommentsClose CommentsPermalink





(B) impacts the types of private educational loan products and rates available at certain institutions of higher education, including a comparison of such impact--CommentsClose CommentsPermalink





(i) on private and public institutions; andCommentsClose CommentsPermalink





(ii) on historically Black colleges and universities (defined for purposes of this section as a `part B institution', within the meaning of section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061)) and other colleges and universities; andCommentsClose CommentsPermalink





(3) to assess the extent to which the use of such nonindividual factors in underwriting may have a disparate impact on the pricing of private educational loans, based on gender, race, income level, and institution of higher education.CommentsClose CommentsPermalink





(b) Report- Not later than 1 year after the date of enactment of this Act, the Comptroller shall submit a report to Congress on the results of the study required by this section.CommentsClose CommentsPermalink

Calendar No. 702CommentsClose CommentsPermalink

To establish requirements for private lenders to protect student borrowers receiving private educational loans, and for other purposes.CommentsClose CommentsPermalink

April 21, 2008