It was referred to the Education and Labor committee.
This bill excludes certain arrangements or agreements regarding education loans from the definition of a preferred lender arrangement.
A preferred lender arrangement is an arrangement or agreement between a lender and an institution of higher education (IHE) that receives federal funding or assistance (1) under which a lender issues education loans to students attending the IHE; and (2) that relates to the IHE recommending, promoting, or endorsing the education loan products of the lender.
The bill provides that arrangements or agreements made under a state-based education loan program or that are funded, insured, or guaranteed by any federal agency other than the Department of Education do not meet the definition of a preferred lender agreement for purposes of certain required disclosures to student borrowers.
117th CONGRESS 2d Session |
To establish that a State-based education loan program is excluded from certain requirements relating to a preferred lender arrangement.
April 26, 2022
Mr. Sessions introduced the following bill; which was referred to the Committee on Education and Labor
To establish that a State-based education loan program is excluded from certain requirements relating to a preferred lender arrangement.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
This Act may be cited as the “State-Based Education Loan Awareness Act”.
SEC. 2. State-based education loan programs.
Section 151 of the Higher Education Act of 1965 (20 U.S.C. 1019) is amended—
(A) in clause (i), by striking “or” after the semicolon;
(B) in clause (ii), by striking the period at the end and inserting a semicolon; and
(C) by adding at the end the following:
“(iii) arrangements or agreements with respect to education loans made under a State-based education loan program; or
“(iv) arrangements or agreements with respect to education loans funded, insured, or guaranteed by any other Federal agency that is not the Department of Education.”; and
(2) by adding at the end the following:
“(10) STATE-BASED EDUCATION LOAN PROGRAM.—The term ‘State-based education loan program’ means an education loan program that—
“(A) is provided by a State agency, State authority, or nonprofit organization, separately or jointly;
“(B) makes loans that are not funded, insured, or guaranteed by the Federal Government;
“(C) is authorized, established, or chartered by State law, or otherwise approved by the State;
“(D) offers one or more loans for which the interest rate and fees, as calculated in accordance with sections 106 and 107 of the Truth in Lending Act (15 U.S.C. 1605; 1606), are at least as favorable as the interest rate and fees of the Direct PLUS loans authorized under part D of title IV at the time such loan is originated; and
“(E) is available only to a borrower who has been advised by an institution of higher education (as defined under section 102)—
“(i) that the borrower has the opportunity to exhaust eligibility for Federal education loans made under part D of title IV prior to accepting a private education loan; and
“(ii) of the interest rates, fees, and benefits of such Federal education loans, including income-driven repayment options, opportunities for loan forgiveness, forbearance or deferment options, interest subsidies, and tax benefits.”.
You can read the bill here.
