[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 890 Referred in Senate (RFS)]

  1st Session
                                H. R. 890


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 10, 2007

     Received; read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 AN ACT


 
   To establish requirements for lenders and institutions of higher 
 education in order to protect students and other borrowers receiving 
                           educational loans.

    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 ``Student Loan Sunshine Act''.

SEC. 2. INSTITUTION AND LENDER REPORTING AND DISCLOSURE REQUIREMENTS.

    Title I of the Higher Education Act of 1965 (20 U.S.C. 1001 et 
seq.) is amended by adding at the end the following:

 ``PART E--LENDER AND INSTITUTION REQUIREMENTS RELATING TO EDUCATIONAL 
                                 LOANS

``SEC. 151. DEFINITIONS.

    ``In this part:
            ``(1) Covered institution.--The term `covered 
        institution'--
                    ``(A) means any educational institution that offers 
                a postsecondary educational degree, certificate, or 
                program of study (including any institution of higher 
                education, as such term is defined in section 102) and 
                receives any Federal funding or assistance; and
                    ``(B) includes an agent of the educational 
                institution (including an alumni association, booster 
                club, or other organization directly or indirectly 
                associated with such institution) or employee of such 
                institution.
            ``(2) Educational loan.--The term `educational loan' 
        (except when used as part of the term `private educational 
        loan') means--
                    ``(A) any loan made, insured, or guaranteed under 
                title IV; or
                    ``(B) a private educational loan (as defined in 
                paragraph (6)).
            ``(3) Preferred lender arrangement.--The term `preferred 
        lender arrangement' means an arrangement or agreement between a 
        lender and a covered institution--
                    ``(A) under which arrangement or agreement a lender 
                provides or otherwise issues educational loans to the 
                students attending the covered institution or the 
                parents of such students; and
                    ``(B) which arrangement or agreement relates to the 
                covered institution recommending, promoting, endorsing, 
                or using the educational loan product of the lender.
            ``(4) Lender.--
                    ``(A) In general.--The term `lender'--
                            ``(i) means a creditor, except that such 
                        term shall not include an issuer of credit 
                        secured by a dwelling or under an open end 
                        credit plan; and
                            ``(ii) includes an agent of a lender.
                    ``(B) Incorporation of tila definitions.--The terms 
                `creditor', `dwelling' and `open end credit plan' have 
                the meanings given such terms in section 103 of the 
                Truth in Lending Act (15 U.S.C. 1602).
            ``(5) Officer.--The term `officer' includes a director or 
        trustee of an institution.
            ``(6) Private educational loan.--The term `private 
        educational loan' means a private loan provided by a lender 
        that--
                    ``(A) is not made, insured, or guaranteed under 
                title IV; and
                    ``(B) is issued by a lender expressly for 
                postsecondary educational expenses to a student, or the 
                parent of the student, regardless of whether the loan 
                involves enrollment certification by the educational 
                institution that the student attends.
            ``(7) Postsecondary educational expenses.--The term 
        `postsecondary educational expenses' means any of the expenses 
        that are included as part of a student's cost of attendance, as 
        defined under section 472.

``SEC. 152. REQUIREMENTS FOR LENDERS AND INSTITUTIONS PARTICIPATING IN 
              PREFERRED LENDER ARRANGEMENTS.

    ``(a) Certification by Lenders.--In addition to any other 
disclosure required under Federal law, each lender that participates in 
one or more preferred lender arrangements shall annually certify to the 
Secretary that all of the preferred lender arrangements in which it 
participates is in compliance with the requirements of this Act. Such 
compliance of such preferred lender arrangement shall be reported on 
and attested to annually by the auditor of such lender in the audit 
conducted pursuant to section 428(b)(1)(U)(iii).
    ``(b) Provision of Loan Information.--A lender may not provide a 
private educational loan to a student attending a covered institution 
with which the lender has a preferred lender arrangement, or the parent 
of such student, until the covered institution has informed the student 
or parent of their remaining options for borrowing under title IV, 
including information on any terms and conditions of available loans 
under such title that are more favorable to the borrower.
    ``(c) Use of Institution Name.--
            ``(1) In general.--A covered institution that has entered 
        into a preferred lender arrangement with a lender regarding 
        private educational loans shall not allow the lender to use the 
        name, emblem, mascot, or logo of the institution, or other 
        words, pictures, or symbols readily identified with the 
        institution, in the marketing of private educational loans to 
        the students attending the institution in any way that implies 
        that the institution endorses the private educational loans 
        offered by the lender.
            ``(2) Applicability.--Paragraph (1) shall apply to any 
        preferred lender arrangement, or extension of such arrangement, 
        entered into or renewed after the date of enactment of the 
        Student Loan Sunshine Act.

``SEC. 153. INTEREST RATE REPORT FOR INSTITUTIONS AND LENDERS 
              PARTICIPATING IN PREFERRED LENDER ARRANGEMENTS.

    ``(a) Duties of the Secretary.--
            ``(1) Report and model format.--Not later than 180 days 
        after the date of enactment of the Student Loan Sunshine Act, 
        the Secretary shall--
                    ``(A) prepare a report on the adequacy of the 
                information provided to students and the parents of 
                such students about educational loans, after consulting 
                with students, representatives of covered institutions 
                (including financial aid administrators, registrars, 
                and business officers), lenders, loan servicers, and 
                guaranty agencies;
                    ``(B) develop and prescribe by regulation a model 
                disclosure form to be used by lenders and covered 
                institutions in carrying out subsections (b) and (c) 
                that--
                            ``(i) will be easy for students and parents 
                        to read and understand;
                            ``(ii) will be easily usable by lenders, 
                        institutions, guaranty agencies, and loan 
                        servicers;
                            ``(iii) will provide students and parents 
                        with the relevant information about the terms 
                        and conditions for both Federal and private 
                        educational loans;
                            ``(iv) is based on the report's findings 
                        and developed in consultation with--
                                    ``(I) students;
                                    ``(II) representatives from 
                                institutions of higher education, 
                                including financial aid administrators, 
                                registrars, business officers, and 
                                student affairs officials;
                                    ``(III) lenders;
                                    ``(IV) loan servicers;
                                    ``(V) guaranty agencies; and
                                    ``(VI) with respect to the 
                                requirements of clause (vi) concerning 
                                private educational loans, the Board of 
                                Governors of the Federal Reserve 
                                System;
                            ``(v) provides information on the 
                        applicable interest rates and other terms and 
                        conditions of the educational loans provided by 
                        a lender to students attending the institution, 
                        or the parents of such students, disaggregated 
                        by each type of educational loans provided to 
                        such students or parents by the lender, 
                        including--
                                    ``(I) the interest rate of the 
                                loan;
                                    ``(II) any fees associated with the 
                                loan;
                                    ``(III) the repayment terms 
                                available on the loan;
                                    ``(IV) the opportunity for 
                                deferment or forbearance in repayment 
                                of the loan, including whether the loan 
                                payments can be deferred if the student 
                                is in school;
                                    ``(V) any additional terms and 
                                conditions applied to the loan, 
                                including any benefits that are 
                                contingent on the repayment behavior of 
                                the borrower;
                                    ``(VI) the annual percentage rate 
                                for such loans, computed determined in 
                                the manner required under section 107 
                                of the Truth in Lending Act (15 U.S.C. 
                                1606) on the basis of the actual net 
                                disbursed amount of the loan;
                                    ``(VII) the average amount borrowed 
                                from the lender by students enrolled in 
                                the institution who obtain loans of 
                                such type from the lender for the 
                                preceding academic year;
                                    ``(VIII) the average interest rate 
                                on such loans provided to such students 
                                for the preceding academic year;
                                    ``(IX) contact information for the 
                                lender; and
                                    ``(X) any philanthropic 
                                contributions made by the lender to the 
                                covered institution; and
                            ``(vi) provides, in addition, with respect 
                        to private educational loans, the following 
                        information with respect to loans made by each 
                        lender recommended by the covered institution:
                                    ``(I) the method of determining the 
                                interest rate of the loan;
                                    ``(II) whether, and under what 
                                conditions, early repayment may be 
                                available without penalty;
                                    ``(III) late payment penalties; and
                                    ``(IV) such other information as 
                                the Secretary may require; and
                    ``(C)(i) submit the report and model disclosure 
                form to the Committee on Health, Education, Labor, and 
                Pensions of the Senate and the Committee on Education 
                and Labor of the House of Representatives; and
                    ``(ii) make the report and model disclosure form 
                available to covered institutions, lenders, and the 
                public.
            ``(2) Model form update.--Not later than 1 year after the 
        submission of the report and model disclosure form described in 
        paragraph (1)(B), the Secretary shall--
                    ``(A) assess the adequacy of the model disclosure 
                form;
                    ``(B) after consulting with students, 
                representatives of covered institutions (including 
                financial aid administrators, registrars, and business 
                officers), lenders, loan servicers, and guaranty 
                agencies--
                            ``(i) prepare a list of any improvements to 
                        the model disclosure form that have been 
                        identified as beneficial to borrowers; and
                            ``(ii) update the model disclosure form 
                        after taking such improvements into 
                        consideration; and
                    ``(C)(i) submit the list of improvements and 
                updated model disclosure form to the Committee on 
                Health, Education, Labor, and Pensions of the Senate 
                and the Committee on Education and Labor of the House 
                of Representatives; and
                    ``(ii) make updated model disclosure form available 
                to covered institutions, lenders, and the public.
            ``(3) Use of form.--The Secretary shall take such steps as 
        necessary to make the model disclosure form, and any updated 
        model disclosure form, available to covered institutions and to 
        encourage--
                    ``(A) lenders subject to subsection (b) to use the 
                model disclosure form or updated model disclosure form 
                (if available) in providing the information required 
                under subsection (b); and
                    ``(B) covered institutions to use such format in 
                preparing the information reported under subsection 
                (c).
            ``(4) Procedures.--Sections 482(c) and 492 of this Act 
        shall not apply to the model disclosure form in the regulations 
        prescribed under paragraph (1)(B), but shall apply to the 
        updating of such form under paragraph (2).
    ``(b) Lender Duties.--Each lender that has a preferred lender 
arrangement with a covered institution shall annually, by a date 
determined by the Secretary, provide to the covered institution and to 
the Secretary the information included on the model disclosure form or 
an updated model disclosure form (if available) for each type of 
educational loan provided by the lender to students attending the 
covered institution, or the parents of such students, for the preceding 
academic year.
    ``(c) Covered Institution Reports.--Each covered institution 
shall--
            ``(1) prepare and submit to the Secretary an annual report, 
        by a date determined by the Secretary, that includes, for each 
        lender that has a preferred lender arrangement with the covered 
        institution and that has submitted to the institution the 
        information required under subsection (b)--
                    ``(A) the information included on the model 
                disclosure form or updated model disclosure form (if 
                available) for each type of educational loan provided 
                by the lender to students attending the covered 
                institution, or the parents of such students; and
                    ``(B) a detailed explanation of why the covered 
                institution believes the terms and conditions of each 
                type of educational loan provided pursuant to the 
                agreement are beneficial for students attending the 
                covered institution, or the parents of such students; 
                and
            ``(2) ensure that the report required under paragraph (1) 
        is made available to the public and provided to students 
        attending or planning to attend the covered institution, and 
        the parents of such students, in time for the student or parent 
        to take such information into account before applying for or 
        selecting an educational loan.
    ``(d) Disclosures by Covered Institutions.--A covered institution 
shall disclose, on its website and in the informational materials 
described in subsection (e)--
            ``(1) a statement that--
                    ``(A) indicates that students are not limited to or 
                required to use the lenders the institutions 
                recommends; and
                    ``(B) the institution is required to process the 
                documents required to obtain a loan from any eligible 
                lender the student selects;
            ``(2) at a minimum, all of the information provided by the 
        model disclosure form prescribed under subsection (a)(1)(B) 
        with respect to any lender recommended by the institution for 
        Federal student loans and, as applicable, private educational 
        loans;
            ``(3) the maximum amount of Federal grant and loan aid 
        available to students in an easy-to-understand format; and
            ``(4) the institution's cost of attendance (as determined 
        under section 472).
    ``(e) Informational Materials.--The informational materials 
described in this subsection are any publications, mailings, or 
electronic messages or media distributed to prospective or current 
students and parents of students that describe, discuss, or relate to 
the financial aid opportunities available to students at an institution 
of higher education.

``SEC. 154. PRIVATE EDUCATIONAL LOAN DISCLOSURE REQUIREMENTS FOR 
              COVERED INSTITUTIONS.

    ``A covered institution that provides information to any student, 
or the parent of such student, regarding a private educational loan 
from a lender shall, prior to or concurrent with such information--
            ``(1) inform the student or parent of--
                    ``(A) the student or parent's eligibility for 
                assistance and loans under title IV; and
                    ``(B) the terms and conditions of such private 
                educational loan that are less favorable than the terms 
                and conditions of educational loans for which the 
                student or parent is eligible, including interest 
                rates, repayment options, and loan forgiveness; and
            ``(2) ensure that information regarding such private 
        educational loan is presented in such a manner as to be 
        distinct from information regarding loans that are made, 
        insured, or guaranteed under title IV.

``SEC. 155. INTEGRITY PROVISIONS.

    ``(a) Institution Code of Conduct Required.--
            ``(1) Code of conduct.--Each institution of higher 
        education that participates in the Federal student loan 
        programs under title IV or has students that obtain private 
        educational loans shall--
                    ``(A) develop a code of conduct in accordance with 
                paragraph (2) with which its officers, employees, and 
                agents shall comply with respect to educational loans;
                    ``(B) publish the code of conduct prominently on 
                its website; and
                    ``(C) administer and enforce such code in 
                accordance with the requirements of this subsection.
            ``(2) Contents of code.--The code required by this section 
        shall--
                    ``(A) prohibit a conflict of interest or the 
                appearance of a conflict of interest with the 
                responsibilities of such officer, employee, or agent 
                with respect to student loans or other financial aid; 
                and
                    ``(B) at a minimum, include provisions in 
                compliance with the provisions of the following 
                subsections of this section.
            ``(3) Training and compliance.--An institution of higher 
        education shall administer and enforce a code of conduct 
        required by this section by, at a minimum, requiring all of its 
        officers, employees, and agents with responsibilities with 
        respect to student loans or other financial aid to obtain 
        training annually in compliance with the code.
    ``(b) Gift Ban.--
            ``(1) Prohibition.--A lender, guarantor, or servicer of 
        educational loans shall not offer any gift to an officer, 
        employee, or agent of a covered institution.
            ``(2) Inspector general report.--The Inspector General of 
        the Department of Education shall investigate any reported 
        violation of this subsection and shall annually submit a report 
        to the Committee on Health, Education, Labor, and Pensions of 
        the Senate and the Committee on Education and Labor of the 
        House of Representatives identifying all reported violations of 
        the gift ban under paragraph (1), including the lenders 
        involved in each such violation, for the preceding year.
            ``(3) Definition of gift.--
                    ``(A) In general.--In this subsection, the term 
                `gift' means any gratuity, favor, discount, 
                entertainment, hospitality, loan, or other item having 
                a monetary value of more than a de minimus amount. The 
                term includes 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.
                    ``(B) Exceptions.--The term `gift' shall not 
                include any of the following:
                            ``(i) Standard informational material 
                        related to a loan or financial literacy, such 
                        as a brochure.
                            ``(ii) Food, refreshments, training, or 
                        informational material furnished to an officer, 
                        employee, or agent of an institution as an 
                        integral part of a training session that is 
                        designed to improve the lender's service to the 
                        covered institution, if such training 
                        contributes to the professional development of 
                        the officer, employee, or agent of the 
                        institution.
                            ``(iii) Favorable terms, conditions, and 
                        borrower benefits on an educational loan 
                        provided to a student employed by the covered 
                        institution if such terms, conditions, or 
                        benefits are comparable to those provided to 
                        all students of the institution.
                            ``(iv) Exit counseling services provided to 
                        borrowers to meet a covered institution's 
                        responsibilities for exit counseling as 
                        required by section 485(b) provided that--
                                    ``(I) a covered institution's staff 
                                are in control of the counseling 
                                (whether in person or via electronic 
                                capabilities); and
                                    ``(II) such counseling does not 
                                promote the products or services of any 
                                lender.
                    ``(C) Rule for gifts to family members.--For 
                purposes of this section, a gift to a family member of 
                an officer, employee, or agent of a covered 
                institution, or a gift to any other individual based on 
                that individual's relationship with the officer, 
                employee, or agent, shall be considered a gift to the 
                officer, employee, or agent if--
                            ``(i) the gift is given with the knowledge 
                        and acquiescence of the officer, employee, or 
                        agent; and
                            ``(ii) the officer, employee, or agent has 
                        reason to believe the gift was given because of 
                        the official position of the officer, employee, 
                        or agent.
    ``(c) Fees From Lenders for Service Prohibited.--An officer, 
employee, or agent who is employed in the financial aid office of the 
institution, or who otherwise has responsibilities with respect to 
educational loans or other financial aid, shall not accept from any 
lender or affiliate of any lender (as the term affiliate is defined in 
section 487(a)) any fee, payment, or other financial benefit (including 
the opportunity to purchase stock) as compensation for consulting 
services, serving on an advisory council, or otherwise advising such 
lender or affiliate.
    ``(d) Ban on Educational Loan Arrangements.--
            ``(1) Prohibition.--An institution of higher education 
        shall not enter into any educational loan arrangement with any 
        lender.
            ``(2) Definition.--For purposes of this subsection, an 
        educational loan arrangement is an arrangement between an 
        institution of higher education (or an agent of the 
        institution) and a lender under which--
                    ``(A) a lender provides or issues educational loans 
                to students attending the institution or to parents of 
                such students;
                    ``(B) the institution recommends the lender or the 
                loan products of the lender; and
                    ``(C) the lender pays a fee or provides other 
                material benefits, including profit or revenue sharing, 
                to the institution or officers, employees, or agents of 
                the institution.
    ``(e) Ban on Staffing Assistance.--
            ``(1) Prohibition.--An institution of higher education 
        shall not request or accept from any lender any assistance with 
        call center staffing or financial aid office staffing.
            ``(2) Certain assistance permitted.--Nothing in paragraph 
        (1) shall be construed to prohibit an institution from 
        requesting or accepting assistance from a lender related to--
                    ``(A) professional development training for 
                financial aid administrators; or
                    ``(B) providing educational counseling materials, 
                financial literacy materials, or debt management 
                materials to borrowers, provided that such materials 
                disclose to borrowers the identification of any lender 
                that assisted in preparing or providing such materials.
    ``(f) Ban on Opportunity Pools.--An institution of higher education 
shall not request, accept, or consider from any lender any offer of 
funds to be used for private educational loans to students in exchange 
for the covered institution providing concessions or promises to the 
lender, and a lender shall not make any such offer.
    ``(g) Ban on Participation on Advisory Councils.--An officer, 
employee, or agent who is employed in the financial aid office of a 
covered institution, or who otherwise has responsibilities with respect 
to educational loans or other financial aid, shall not serve on or 
otherwise participate with advisory councils of lenders or affiliates 
of lenders. Nothing in this subsection shall prohibit lenders from 
seeking advice from covered institutions or groups of covered 
institutions (including through telephonic or electronic means, or a 
meeting) in order to improve products and services for borrowers, 
provided there are no gifts or compensation (including for 
transportation, lodging, or related expenses) provided by lenders in 
connection with seeking this advice from such institutions.

``SEC. 156. COMPLIANCE AND ENFORCEMENT.

    ``(a) Condition of Any Federal Assistance.--Notwithstanding any 
other provision of law, a covered institution or lender shall comply 
with this part as a condition of receiving Federal funds or assistance 
provided after the date of enactment of the Student Loan Sunshine Act.
    ``(b) Penalties.--Notwithstanding any other provision of law, if 
the Secretary determines, after providing notice and an opportunity for 
a hearing for a covered institution or lender, that the covered 
institution or lender has violated subsection (a)--
            ``(1) in the case of a covered institution, or a lender 
        that does not participate in a loan program under title IV, the 
        Secretary may impose a civil penalty in an amount of not more 
        than $25,000; and
            ``(2) in the case of a lender that does participate in a 
        program under title IV, the Secretary may limit, terminate, or 
        suspend the lender's participation in such program.
    ``(c) Considerations.--In taking any action against a covered 
institution or lender under subsection (b), the Secretary shall take 
into consideration the nature and severity of the violation of 
subsection (a).''.

SEC. 3. PROGRAM PARTICIPATION AGREEMENTS.

    Section 487(a) of the Higher Education Act of 1965 (20 U.S.C. 
1094(a)) is amended by adding at the end the following:
            ``(24)(A) In the case of an institution (including an 
        officer (including a director or trustee), employee, or agent 
        of an institution) that maintains a preferred lender list, in 
        print or any other medium, through which the institution 
        recommends 1 or more specific lenders for educational loans (as 
        such term is defined in section 151 of this Act, but excluding 
        loans under part D of this title) to the students attending the 
        institution (or the parents of such students), the institution 
        will--
                    ``(i) clearly and fully disclose on the preferred 
                lender list--
                            ``(I) why the institution has included each 
                        lender as a preferred lender, especially with 
                        respect to terms and conditions favorable to 
                        the borrower; and
                            ``(II) that the students attending the 
                        institution (or the parents of such students) 
                        do not have to borrow from a lender on the 
                        preferred lender list;
                    ``(ii) ensure, through the use of the list provided 
                by the Secretary under subparagraph (C), that--
                            ``(I) there are not less than 3 lenders 
                        named on the each preferred lending list 
                        offered by the institution that are not 
                        affiliates of each other; and
                            ``(II) the preferred lender list--
                                    ``(aa) specifically indicates, for 
                                each lender on the list, whether the 
                                lender is or is not an affiliate of 
                                each other lender on the list; and
                                    ``(bb) if the lender is an 
                                affiliate of another lender on the 
                                list, describes the specifics of such 
                                affiliation;
                    ``(iii) establish and prominently disclose a 
                process to ensure that lenders are placed upon the 
                preferred lender list on the basis of the benefits 
                provided to borrowers, including--
                            ``(I) highly competitive interest rates, 
                        terms, or conditions for loans made under part 
                        B;
                            ``(II) high-quality servicing for such 
                        loans; or
                            ``(III) additional benefits beyond the 
                        standard terms and conditions for such loans;
                    ``(iv) exercise a duty of care and a duty of 
                loyalty to compile the preferred lender list without 
                prejudice and for the sole benefit of the student;
                    ``(v) not deny or otherwise impede the borrower's 
                choice of a lender or cause unnecessary delays in loan 
                certification under this title for those borrowers who 
                choose a lender than has not been recommended or 
                suggested by the institution.
            ``(B) For the purposes of subparagraph (A)(ii)--
                    ``(i) the term `affiliate' means a person that 
                controls, is controlled by, or is under common control 
                with another person; and
                    ``(ii) a person controls, is controlled by, or is 
                under common control with another person if--
                            ``(I) the person directly or indirectly, or 
                        acting through 1 or more others, owns, 
                        controls, or has the power to vote 5 percent or 
                        more of any class of voting securities of such 
                        other person;
                            ``(II) the person controls, in any manner, 
                        the election of a majority of the directors or 
                        trustees of such other person; or
                            ``(III) the Secretary determines (after 
                        notice and opportunity for a hearing) that the 
                        person directly or indirectly exercises a 
                        controlling interest over the management or 
                        policies of such other person.
            ``(C) The Secretary shall maintain and update a list of 
        lender affiliates of all eligible lenders, and shall provide 
        such list to the eligible institutions for use in carrying out 
        subparagraph (A).''.

SEC. 4. NOTICE OF AVAILABILITY OF FUNDS FROM FEDERAL SOURCES.

    Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended 
by adding at the end the following:
    ``(e) Disclosures Relating to Private Educational Loans.--
            ``(1) In general.--In the case of an extension of credit 
        that is a private educational loan, other than a loan secured 
        by a dwelling or an open end credit plan, the creditor shall 
        provide in every application for such extensions of credit and 
        together with any solicitation, marketing, or advertisement of 
        such extensions of credit, written, electronic, or otherwise, 
        the disclosures described in paragraph (2).
            ``(2) Disclosures.--Disclosures required by this subsection 
        shall include a clear and prominent statement--
                    ``(A) 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;
                    ``(B) that in many cases, a Federal student loan 
                may provide the consumer with more beneficial terms and 
                conditions, including a lower annual percentage rate 
                and fewer and lower fees, than private educational 
                loans;
                    ``(C) that the consumer may obtain additional 
                information concerning such Federal financial 
                assistance from their institution of higher education 
                or at the website of the Department of Education; and
                    ``(D) such other information as the Board may 
                require.
            ``(3) Clear and conspicuous disclosure.--The disclosure 
        required under paragraph (2) shall be placed in a conspicuous 
        and prominent location on or with any written application, 
        solicitation, or other document or paper relating to any 
        extension of credit consisting of or involving a private 
        educational loan for which such disclosure is required under 
        this subsection.
            ``(4) Written acknowledgment of receipt.--In each case in 
        which a disclosure is provided pursuant to paragraph (2) and an 
        application initiated, a creditor shall obtain a written 
        acknowledgment from the consumer that the consumer has read and 
        understood the disclosure.
            ``(5) Additional disclosures.--In the case of an extension 
        of credit that is a private educational loan, other than a loan 
        secured by a dwelling or an open end credit plan, the creditor 
        shall make available, in a clear and accessible manner 
        (including through the website of the creditor), the 
        information required by sections 153(a)(1)(B)(iv) and (v) of 
        the Higher Education Act of 1965.
            ``(6) Provision of information.--Before a creditor may 
        issue any funds with respect to an extension of credit 
        described in paragraph (1) for an amount equal to more than 
        $1,000, the creditor shall notify the relevant postsecondary 
        educational institution, in writing, of the proposed extension 
        of credit and the amount thereof.
            ``(7) Regulatory authority.--The Board--
                    ``(A) shall issue such rules and regulations as may 
                be necessary to implement this subsection; and
                    ``(B) may, by rule, establish appropriate 
                exceptions to the requirements of this subsection.
            ``(8) Definitions.--As used in this subsection, the terms 
        `private educational loan' and `covered institution' have the 
        same meanings as in section 151 of the Higher Education Act of 
        1965.''.

SEC. 5. IMPROVED INFORMATION CONCERNING THE FEDERAL STUDENT FINANCIAL 
              AID WEBSITE.

    Section 131 of the Higher Education Act of 1965 (20 U.S.C. 1015) is 
amended by adding at the end the following new subsection:
    ``(e) Promotion of the Department of Education Federal Student 
Financial Aid Website.--The Secretary--
            ``(1) shall display a link to the Federal student financial 
        aid website of the Department of Education in a prominent place 
        on the homepage of the Department of Education website; and
            ``(2) may use administrative funds available for the 
        Department's operations and expenses for the purpose of 
        advertising and promoting the availability of the Federal 
        student financial aid website.
    ``(f) Promotion of Availability of Information Concerning Student 
Financial Aid Programs of Other Departments and Agencies.--
            ``(1) Availability of information.--The Secretary shall 
        ensure that the eligibility requirements, application 
        procedures, financial terms and conditions, and other relevant 
        information for each non-departmental student financial 
        assistance program are easily accessible through the Federal 
        student financial aid website and are incorporated into the 
        search matrix on such website in a manner that permits students 
        and parents to readily identify the programs that are 
        appropriate to their needs and eligibility.
            ``(2) Agency response.--Each Federal department and agency 
        shall promptly respond to surveys or other requests for the 
        information required by paragraph (1), and shall identify for 
        the Secretary any non-departmental student financial assistance 
        program operated, sponsored, or supported by such Federal 
        department or agency.
            ``(3) Definition.--For purposes of this subsection, the 
        term `non-departmental student financial assistance program' 
        means any grant, loan, scholarship, fellowship, or other form 
        of financial aid for students pursuing a postsecondary 
        education that is--
                    ``(A) distributed directly to the student or to the 
                student's account at the institution of higher 
                education; and
                    ``(B) operated, sponsored, or supported by a 
                Federal department or agency other than the Department 
                of Education.''.

            Passed the House of Representatives May 9, 2007.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.