[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1968 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1968

   To amend the Higher Education Act of 1965 to enhance literacy in 
             finance and economics, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 25, 2003

   Mr. Enzi (for himself, Mr. Akaka, Mr. Corzine, and Mr. Sarbanes) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
   To amend the Higher Education Act of 1965 to enhance literacy in 
             finance and economics, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Literacy in Higher 
Education Act''.

SEC. 2. AREAS OF EMPHASIS.

    Part B of title I of the Higher Education Act of 1965 (20 U.S.C. 
1011 et seq.) is amended by adding at the end the following:

``SEC. 123. AREAS OF EMPHASIS.

    ``In carrying out activities under this Act related to improving 
financial and economic literacy, education, and counseling, the 
Secretary shall emphasize, among other elements, basic personal income 
and household money management and financial planning skills, and basic 
economic decision making skills, including how to--
            ``(1) create household budgets, initiate savings plans, and 
        make strategic investment decisions for education, employment, 
        retirement, home ownership, wealth building, or other savings 
        goals;
            ``(2) manage credit and debt effectively, including student 
        financial aid and credit card debt, and understand the merits 
        of establishing and maintaining excellent credit history;
            ``(3) understand, evaluate, and compare fair and favorable 
        financial products, services, and opportunities, and avoid 
        abusive, predatory, or deceptive financial products, services, 
        and opportunities;
            ``(4) complete tax returns and understand tax consequences 
        when making certain financial decisions, such as placing an 
        investment or purchasing a home;
            ``(5) identify economic problems, alternatives, benefits, 
        and costs;
            ``(6) analyze the incentives at work in an economic 
        situation;
            ``(7) examine the consequences of changes in economic 
        conditions and public policies;
            ``(8) collect and organize economic evidence, including 
        understanding, evaluating, and making strategic decisions using 
        economic indicators;
            ``(9) compare benefits with costs; and
            ``(10) improve financial and economic literacy and 
        education through all other related skills.''.

SEC. 3. COORDINATION.

    In carrying out the financial and economic literacy activities 
authorized under this Act and the amendments made by this Act, the 
Secretary of Education, to the greatest extent practicable, shall 
coordinate such activities with the financial and economic literacy 
efforts of a Federal commission comprised of the following:
            (1) The Secretary of the Treasury.
            (2) The respective head of each of the following:
                    (A) Each of the Federal banking agencies (as 
                defined in section 3 of the Federal Deposit Insurance 
                Act (12 U.S.C. 1813)).
                    (B) The National Credit Union Administration.
                    (C) The Securities and Exchange Commission.
                    (D) Each of the Departments of Education, 
                Agriculture, Defense, Health and Human Services, 
                Housing and Urban Development, Labor, and Veterans 
                Affairs.
                    (E) The Federal Trade Commission.
                    (F) The General Services Administration.
                    (G) The Small Business Administration.
                    (H) The Social Security Administration.
                    (I) The Commodity Futures Trading Commission.
                    (J) The Office of Personnel Management.
            (3) At the discretion of the President, not more than 5 
        individuals appointed by the President from among the 
        administrative heads of any other Federal agencies, 
        departments, or other Government entities, whom the President 
        determines to be engaged in a serious effort to improve 
        financial literacy and education.

SEC. 4. ENHANCEMENT OF FINANCIAL LITERACY AND ECONOMIC LITERACY.

    The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--
            (1) in section 201(a)(3), by inserting ``personal 
        finance,'' after ``economics,'';
            (2) in section 311(c)--
                    (A) by redesignating paragraphs (7) through (12) as 
                paragraphs (8) through (13), respectively; and
                    (B) by inserting after paragraph (6) the following:
            ``(7) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents.'';
            (3) in section 316(c)(2)--
                    (A) by redesignating subparagraphs (G) through (L) 
                as subparagraphs (H) through (M), respectively;
                    (B) by inserting after subparagraph (F) the 
                following:
                    ``(G) education or counseling services designed to 
                improve the financial literacy and economic literacy of 
                students and their parents;''; and
                    (C) in subparagraph (M), as redesignated by 
                subparagraph (A), by striking ``subparagraphs (A) 
                through (K)'' and inserting ``subparagraphs (A) through 
                (L)'';
            (4) in section 317(c)(2)--
                    (A) in subparagraph (G), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (H), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(I) education or counseling services designed to 
                improve the financial literacy and economic literacy of 
                students and their parents.'';
            (5) in section 323(a)--
                    (A) by redesignating paragraphs (7) through (12) as 
                paragraphs (8) through (13), respectively; and
                    (B) by inserting after paragraph (6) the following:
            ``(7) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents.'';
            (6) in section 326(c)--
                    (A) by redesignating paragraphs (5) through (7) as 
                paragraphs (6) through (8), respectively; and
                    (B) by inserting after paragraph (4) the following:
            ``(5) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;'';
            (7) in section 503(b)--
                    (A) by redesignating paragraphs (5) through (14) as 
                paragraphs (6) through (15), respectively; and
                    (B) by inserting after paragraph (4) the following:
            ``(5) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents.'';
            (8) in section 402B(b)--
                    (A) by redesignating paragraphs (3) through (10) as 
                paragraphs (4) through (11), respectively;
                    (B) by inserting after paragraph (2) the following:
            ``(3) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;''; and
                    (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)'';
            (9) in section 402C--
                    (A) in subsection (b)--
                            (i) by redesignating paragraphs (2) through 
                        (12) as paragraphs (3) through (13), 
                        respectively;
                            (ii) by inserting after paragraph (1) the 
                        following:
            ``(2) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;''; and
                            (iii) in paragraph (13), as redesignated by 
                        clause (i), by striking ``paragraphs (1) 
                        through (11)'' and inserting ``paragraphs (1) 
                        through (12)''; and
                    (B) in subsection (e), by striking ``subsection 
                (b)(10)'' and inserting ``subsection (b)(11)'';
            (10) in section 402D(b)--
                    (A) by redesignating paragraphs (2) through (10) as 
                paragraphs (3) through (11), respectively;
                    (B) by inserting after paragraph (1) the following:
            ``(2) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;''; and
                    (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)'';
            (11) in section 402E(b)--
                    (A) by redesignating paragraphs (7) and (8) as 
                paragraphs (8) and (9), respectively; and
                    (B) by inserting after paragraph (6) the following:
            ``(7) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;'';
            (12) in section 402F(b)--
                    (A) by redesignating paragraphs (4) through (10) as 
                paragraphs (5) through (11), respectively;
                    (B) by inserting after paragraph (3) the following:
            ``(4) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and 
        their parents;''; and
                    (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)'';
            (13) in section 404D(b)(2)(A)(ii), by striking ``and 
        academic counseling'' and inserting ``academic counseling, and 
        financial literacy and economic literacy education or 
        counseling'';
            (14) by striking section 418A(c)(1)(B)(i) and inserting the 
        following:
                    ``(i) personal, academic, career, and economic 
                education or personal finance counseling as an ongoing 
                part of the program;'';
            (15) in section 428F, by adding at the end the following:
    ``(c) Financial and Economic Literacy.--Where appropriate, each 
program described under subsection (b) shall include making available 
financial and economic education materials for the borrower.'';
            (16) in section 432(k)(1), by striking ``and offering'' and 
        all that follows through the period and inserting ``, offering 
        loan repayment matching provisions as part of employee benefit 
        packages, and providing employees with financial and economic 
        education and counseling.'';
            (17) in section 441(c)--
                    (A) in paragraph (1), by inserting ``financial 
                literacy and economic literacy,'' after ``social 
                services,''; and
                    (B) in paragraph (4)(C), by striking the period at 
                the end and inserting ``and counseling for the purposes 
                of improving financial literacy and economic 
                literacy.'';
            (18) in section 485--
                    (A) in subsection (a)(1)(D), by striking the 
                semicolon at the end and inserting ``, including the 
                merits of taking a personal finance course, if the 
                institution offers such a course, and of the student 
                reviewing the student's personal credit profile not 
                less frequently than once a year;'';
                    (B) in subsection (b)--
                            (i) in paragraph (1)(A)--
                                    (I) in clause (i), by striking 
                                ``and'' after the semicolon;
                                    (II) in clause (ii), by striking 
                                the period at the end and inserting ``; 
                                and''; and
                                    (III) by adding at the end the 
                                following:
                            ``(iii) if it is determined during the 
                        counseling that the borrower is not connected 
                        to a mainstream financial institution, 
                        information about low-cost financial services 
                        and the benefits of using such services, and 
                        where and how the borrower could open a low-
                        cost account in a federally insured credit 
                        union or bank.''; and
                            (ii) by adding at the end the following:
            ``(3) Pilot program.--
                    ``(A) Authorization.--
                            ``(i) In general.--The Secretary shall 
                        establish a pilot program that awards a total 
                        of 5 grants to 5 different institutions of 
                        higher education that are located in 
                        geographically different parts of the United 
                        States to enable the institutions to provide 
                        annual personal finance counseling for students 
                        enrolled at such institutions.
                            ``(ii) Minority serving institutions.--In 
                        awarding grants under this paragraph, the 
                        Secretary shall award not less than 2 of the 5 
                        grants to institutions of higher education that 
                        are eligible to receive assistance under title 
                        III or title V.
                    ``(B) Application.--An institution of higher 
                education that desires to receive a grant under this 
                paragraph shall submit an application to the Secretary 
                at such time, in such manner, and containing such 
                information as the Secretary may require.
                    ``(C) Use of funds.--
                            ``(i) Counseling.--
                                    ``(I) In general.--In addition to 
                                making available exit counseling under 
                                paragraph (1), an institution of higher 
                                education that receives a grant under 
                                this paragraph shall through financial 
                                aid officers or otherwise, make 
                                available counseling to borrowers of 
                                loans which are made, insured, or 
                                guaranteed under part B (other than 
                                loans made pursuant to section 428B) of 
                                this title or made under part D or E of 
                                this title at the commencement of the 
                                borrower's course of study at the 
                                institution, not less frequently than 
                                once annually while the borrower is 
                                enrolled at the institution, and not 
                                later than 30 days after completion of 
                                the course of study for which the 
                                borrower enrolled at the institution or 
                                at the time of departure from such 
                                institution.
                                    ``(II) Content.--The counseling 
                                required under subclause (I) shall 
                                include the average anticipated monthly 
                                repayments, a review of the repayment 
                                options available, the total amount of 
                                interest that would be paid over a 
                                range of possible interest rates and 
                                the amount of interest in the monthly 
                                payments, information on the 
                                availability and content of a personal 
                                finance course if such course is 
                                offered by the institution and if not 
                                already completed by the individual, 
                                and such debt and management strategies 
                                as the institution determines are 
                                designed to facilitate the repayment of 
                                such indebtedness, which may be 
                                implemented in partnership with State 
                                or local public, private, and 
nonprofit entities approved by the local educational agency that serves 
schools in the area where the institution is located, or a campus 
committee formed for the purpose of evaluating the qualifications of 
such entities. If it is determined during the counseling that the 
borrower is not connected to a mainstream financial institution, the 
counseling shall include information about low-cost financial services 
and the benefits of using such services, and where and how the borrower 
could open a low-cost account in a federally insured credit union or 
bank.
                            ``(ii) Permissive use.--Grant funds 
                        received under this paragraph may be used to 
                        pay for additional financial aid personnel or 
                        for training for existing financial aid 
                        personnel.
                            ``(iii) Study.--
                                    ``(I) In general.--An institution 
                                of higher education that receives a 
                                grant under this paragraph shall 
                                conduct a study to evaluate the 
                                impacts, if any, of the financial and 
                                economic literacy and counseling 
                                activities on students' levels of 
                                savings and indebtedness, and 
                                creditworthiness, and such activities' 
                                effectiveness in reducing the incidence 
                                of problems with handling credit, 
                                including bankruptcy filing and student 
                                financial loan default.
                                    ``(II) Assistance.--An institution 
                                of higher education may conduct the 
                                study under subclause (I) with the 
                                assistance of appropriate Federal 
                                agencies or other entities approved by 
                                the Secretary.
                                    ``(III) Report.--Not later than 6 
                                months after completion of the study 
                                under subclause (I), the institution of 
                                higher education shall report the 
                                results of such study to the Secretary, 
                                the Secretary of the Treasury, the 
                                Committee on Health, Education, Labor, 
                                and Pensions of the Senate, the 
                                Committee on Banking, Housing, and 
                                Urban Affairs of the Senate, the 
                                Committee on Education and the 
                                Workforce of the House of 
                                Representatives, and the Committee on 
                                Financial Services of the House of 
                                Representatives.
                    ``(D) Duration.--Grants awarded under this 
                paragraph shall be for a period of 3 years.
                    ``(E) Amount.--The Secretary shall award grants of 
                not more than $1,000,000 annually to each institution 
                of higher education awarded a grant under this 
                paragraph. The Secretary may determine the grant award 
                amount based on the number of students to be counseled 
                at the institution of higher education.
                    ``(F) Report.--Not later than 90 days after the 
                date of completion of the pilot program under this 
                paragraph, the Secretary shall submit a report to 
                Congress on the effectiveness of the program.
                    ``(G) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph such sums as may be necessary for each of 
                fiscal years 2005 through 2009.''; and
                    (C) in subsection (c), by adding at the end the 
                following: ``Appropriate Federal agencies shall provide 
                material developed by such agencies for the purpose of 
                financial education, to financial assistance 
                information personnel at institutions of higher 
                education for the use of such personnel in financial 
                aid counseling.''; and
            (19) in section 491(d)(8), by inserting ``, including those 
        related to financial literacy activities,'' after ``resources 
        and services''.

SEC. 5. EVALUATION.

    Not later than 6 years after the date of enactment of this Act, the 
Comptroller General of the United States shall submit to the Committee 
on Health, Education, Labor, and Pensions of the Senate, the Committee 
on Banking, Housing, and Urban Affairs of the Senate, the Committee on 
Education and the Workforce of the House of Representatives, and the 
Committee on Financial Services of the House of Representatives, an 
evaluation of the range and effectiveness of financial and economic 
education and financial aid counseling activities of institutions of 
higher education, lenders, servicers, and guaranty agencies as 
emphasized by the Secretary of Education pursuant to section 123 of the 
Higher Education Act of 1965.
                                 <all>