[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 835 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 835

   To amend the Higher Education Act of 1965 to provide student loan 
 borrowers with a choice of lender for loan consolidation, to provide 
      notice regarding loan consolidation, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 9, 2003

 Ms. Landrieu 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 provide student loan 
 borrowers with a choice of lender for loan consolidation, to provide 
      notice regarding loan consolidation, 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. STUDENT LOAN CONSOLIDATION.

    (a) Short Title.--This section may be cited as the ``Consolidation 
Student Loan Flexibility Act of 2003''.
    (b) Student Loan Borrower Choice of Loan Consolidator.--Section 
428C(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 1078-
3(b)(1)(A)) is amended by striking ``and (i) the lender holds'' and all 
that follows through ``selected for consolidation)''.
    (c) Consolidation Loan Agreements.--Section 428C(b)(1) of the 
Higher Education Act of 1965 (20 U.S.C. 1078-3(b)(1)) is amended--
            (1) in subparagraph (E), by striking ``and'' after the 
        semicolon;
            (2) by redesignating subparagraph (F) as subparagraph (G); 
        and
            (3) by inserting after subparagraph (E) the following:
                    ``(F) that each applicant for a consolidation loan 
                will be provided a clear and conspicuous notice, in 
                such form as the Secretary shall prescribe, describing 
                (i) the effects of a consolidation loan and its 
                available repayment plans on the borrower's interest 
                rate, the amount of the applicant's monthly and total 
                payments, the total interest accrued, and the length of 
                the repayment term, (ii) the availability of the 
                student borrower to prepay loans, and (iii) the 
                differences between variable and fixed interest rates, 
                which information shall be relative to the borrower's 
                reported current loan balance and the likely interest 
                rate estimated by the lender under consideration for 
                the consolidation loan.''.
    (d) Exit Counseling.--Section 485(b) of the Higher Education Act of 
1965 (20 U.S.C. 1092(b)) is amended by adding at the end the following:
    ``(3) Each eligible institution shall provide to the borrower of a 
loan made under part B, D, or E, during the exit interview required by 
this subsection, a clear and conspicuous notice, in such form as the 
Secretary shall prescribe, describing the effect of using a 
consolidation loan to discharge the borrower's student loans, and 
including, with respect to a series of loan amount ranges--
            ``(A) the differences between fixed and variable interest 
        rates;
            ``(B) the effects of a consolidation loan and its available 
        repayment plans on the borrower's interest rate, the amount of 
        the borrower's monthly and total payments, the total interest 
        accrued, and the length of repayment term; and
            ``(C) the ability of the borrower to prepay loans.''.
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