1.Short title; table of
contents
(a)This Act may be cited
as the Private Student Loan
Transparency and Improvement Act of 2007
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Regulations.
Sec. 4. Effective dates.
TITLE I—Preventing unfair and deceptive private educational
lending practices and eliminating conflicts of interest
Sec. 101. Amendment to the Truth in Lending Act.
Sec. 102. Civil liability.
Sec. 103. Clerical amendment.
TITLE II—Improved disclosures for private educational
loans
Sec. 201. Private educational loan disclosures and
limitations.
Sec. 202. Application of Truth in Lending Act to all private
educational loans.
TITLE III—College Affordability
Sec. 301. Community Reinvestment Act credit for low-cost
loans.
TITLE IV—Financial literacy
Sec. 401. Coordinated education efforts.
TITLE V—Study and report on nonindividual information
Sec. 501. Study and report on nonindividual
information.
2.As used in this Act—
(1)the term Board means the Board
of Governors of the Federal Reserve System;
(2)the term
covered educational institution
—
(A)means any
educational institution that offers a postsecondary educational degree,
certificate, or program of study (including any institution of higher
education); and
(B)includes an agent
or employee of the educational institution;
(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);
(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);
(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);
(6)the term
private educational lender means—
(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;
(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; and
(C)any other person
engaged in the business of soliciting, making, or extending private educational
loans; and
(7)the term
private educational loan—
(A)means a loan
provided by a private educational lender that—
(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.); and
(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; and
(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.
3.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.
4.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.
<enum>I</enum><header>Preventing unfair
and deceptive private educational lending practices and eliminating conflicts
of interest</header>
<section id="ID90b10d14cc5d41cf8237eb4ecffe60b1"><enum>101.</enum><header>Amendment to
the Truth in Lending Act</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="id1CF8DF8FB35A4B99BB859256A379BF3F" style="USC">
<section id="id01A07C0068C140CF85A566D7F7341179"><enum>140.</enum><header>Preventing
unfair and deceptive private educational lending practices and eliminating
conflicts of interest</header>
<subsection id="idEF3B656B124F40F1BC4A5A6E5C1080F3"><enum>(a)</enum><header>Definitions</header><text>As
used in this section—</text>
<paragraph id="idC4A08B9C01A2424391EED4FE37A77893"><enum>(1)</enum><text>the term
<quote>covered educational institution</quote>—</text>
<subparagraph id="id3449FCF5911B4A69BE14FA358123D982"><enum>(A)</enum><text>means any
educational institution that offers a postsecondary educational degree,
certificate, or program of study (including any institution of higher
education); and</text>
</subparagraph><subparagraph id="id4F8A2425E50E4106960DFA5980A68F98"><enum>(B)</enum><text>includes an agent
or employee of the educational institution;</text>
</subparagraph></paragraph><paragraph id="idECF673FCFB644E62B6E5546172318048"><enum>(2)</enum><text>the term
<quote>gift</quote>—</text>
<subparagraph id="id0A69F794B4E047059A72428A6CCF9E62"><enum>(A)</enum><text>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; and</text>
</subparagraph><subparagraph id="id1B6617196324413D813DB04CA7D75E65"><enum>(B)</enum><text>does not
include—</text>
<clause id="idC27198A1DDBE4311A3448B1543F640D8"><enum>(i)</enum><text>standard
informational material related to a loan (such as a brochure);</text>
</clause><clause id="idF4B2F13B899E4084B6D8455A93D60E8D"><enum>(ii)</enum><text>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; or</text>
</clause><clause id="idC070EE57505740A38DD6C3F9185F64E9"><enum>(iii)</enum><text>favorable
terms, conditions, and borrower benefits on an educational loan provided to a
student employed by the covered educational institution;</text>
</clause></subparagraph></paragraph><paragraph id="id6263C08D2D8B41928D7078C33EB3E12B"><enum>(3)</enum><text>the term
<quote>institution of higher education</quote> has the same meaning as in
section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idAA179E625F444447A07883E731DD0862"><enum>(4)</enum><text display-inline="yes-display-inline">the term <term>postsecondary educational
expenses</term> 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);</text>
</paragraph><paragraph id="id2810AA8B99934B57BF913FB79C20F586"><enum>(5)</enum><text>the term
<term>private educational lender</term> means—</text>
<subparagraph id="id2F299B3E605F4680B143B63C8FDA7F44"><enum>(A)</enum><text>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;</text>
</subparagraph><subparagraph id="id6264EE57C2294B65AD085690AEEA9ABB"><enum>(B)</enum><text>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; and</text>
</subparagraph><subparagraph commented="no" id="idBA89DE3AC9A84683A59CD3A0192C7750"><enum>(C)</enum><text>any other person
engaged in the business of soliciting, making, or extending private educational
loans;</text>
</subparagraph></paragraph><paragraph id="idA14766D7E7CD443297255690AADA698F"><enum>(6)</enum><text>the term
<term>private educational loan</term>—</text>
<subparagraph id="id921C6135325E40B997B535154CAF1BA2"><enum>(A)</enum><text>means a loan
provided by a private educational lender that—</text>
<clause id="id0C4353316F1740CEB02D87E0A59CB377"><enum>(i)</enum><text>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.); and</text>
</clause><clause id="id11BD2ADBB9344DA19828E10367DD0D2B"><enum>(ii)</enum><text>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; and</text>
</clause></subparagraph><subparagraph id="idBC04426689BB4FF3A3F90E8351D93FE1"><enum>(B)</enum><text>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; and</text>
</subparagraph></paragraph><paragraph id="id8926B4CE7EC245D18CB7ACCF797896D3"><enum>(7)</enum><text>the term
<term>revenue sharing</term> means an arrangement between a covered educational
institution and a private educational lender under which—</text>
<subparagraph id="id8B4D187769034067A1273DA8819E325C"><enum>(A)</enum><text>a private
educational lender provides or issues private educational loans to students
attending the covered educational institution or to the parents of such
students;</text>
</subparagraph><subparagraph id="idF1BDE4D538C64C0191F3C7E3A0555979"><enum>(B)</enum><text>the covered
educational institution recommends to students or others the private
educational lender or the private educational loans of the private educational
lender; and</text>
</subparagraph><subparagraph id="id962200E275E640ACA3AB96EB7F05DD7E"><enum>(C)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="ID51a3ee4e82144db0abccafa01bd7afd6"><enum>(b)</enum><header>Prohibition on
certain gifts and arrangements</header><text>A private educational lender,
including any officer or employee thereof, may not, directly or
indirectly—</text>
<paragraph id="idD489CE725E83404383B3ABF08988BA0A"><enum>(1)</enum><text>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; or</text>
</paragraph><paragraph id="IDa590105adb324be3a1397a6416ebc2d8"><enum>(2)</enum><text>engage in revenue
sharing with a covered educational institution.</text>
</paragraph></subsection><subsection id="ID5a516b4d0c2648a2ac302cd08cf401fe"><enum>(c)</enum><header>Prohibition on
co-branding</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection commented="no" id="ID601c1108aea245e7a72801cd37ffef97"><enum>(d)</enum><header>Advisory board
compensation</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection id="id5B57869B34D84F859337B0551230C110"><enum>(e)</enum><header>Prohibition on
prepayment or repayment fees or penalty</header><text display-inline="yes-display-inline">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.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id3D8D883425574958B5CAFEC2B737B43E"><enum>102.</enum><header>Civil
liability</header><text display-inline="no-display-inline">Section 130 of the
Truth in Lending Act (15 U.S.C. 1640) is amended—</text>
<paragraph commented="no" id="id42157A8E31624785A3BD1B1BDC71CE95"><enum>(1)</enum><text>in subsection
(a)—</text>
<subparagraph commented="no" id="id9DE5C82A710E43F980D4265E155A5EA4"><enum>(A)</enum><text>in paragraph (3),
by inserting <quote>or section 128(e)(6)</quote> after <quote>section
125</quote>; and</text>
</subparagraph><subparagraph commented="no" id="idB7CF114C6B1D47E2BE3374724A0D5878"><enum>(B)</enum><text>in the fourth
sentence of the undesignated matter at the end—</text>
<clause commented="no" id="id27E65C9310C741ADB8E8663911C0F9A5"><enum>(i)</enum><text>by striking
<quote>125 or</quote> and inserting <quote>125,</quote>; and</text>
</clause><clause commented="no" id="idBEA420CB0EB94D239BAFD6EC17FEA21D"><enum>(ii)</enum><text>by inserting
<quote>or of section 128(e),</quote> before <quote>or for failing</quote>;
and</text>
</clause></subparagraph></paragraph><paragraph id="idE022C0FFBFD24EC890CAA6E6B1CB8EB4"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (e), by inserting before the
first period, the following: <quote>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</quote>.</text>
</paragraph></section><section id="id9BB33E4D02C348FD8E2537B5597C63DD"><enum>103.</enum><header>Clerical
amendment</header><text display-inline="no-display-inline">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:</text>
<toc>
<toc-entry bold="off" level="section"><quote>140. Preventing unfair
and deceptive private educational lending practices and eliminating conflicts
of interest.</quote>.</toc-entry>
</toc>
</section><enum>II</enum><header>Improved
disclosures for private educational loans</header>
<section id="IDd51b335d1cd24753929245f641c1fa54"><enum>201.</enum><header>Private
educational loan disclosures and limitations</header><text display-inline="no-display-inline">Section 128 of the Truth in Lending Act (15
U.S.C. 1638) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="id867D878D8D1142DAA361C07BF77A4D59" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID9478AFDA936D4875A819D777E509CCA3"><enum>(e)</enum><header display-inline="yes-display-inline">Terms and disclosure with respect to
private educational loans</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID4043896C65D0469282D0DBB36B654688"><enum>(1)</enum><header>Disclosures
required in private educational loan applications and
solicitations</header><text>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—</text>
<subparagraph id="IDF5A9669A11AF4DDDAF0F077085161653"><enum>(A)</enum><text>the potential
range of rates of interest applicable to the private educational loan;</text>
</subparagraph><subparagraph id="id5B47305224B043EAACE395895C29895F"><enum>(B)</enum><text>whether the rate
of interest applicable to the private educational loan is fixed or
variable;</text>
</subparagraph><subparagraph id="idBB3F967570274BB2B7FCA40D311AFCD0"><enum>(C)</enum><text>limitations on
interest rate adjustments, both in terms of frequency and amount, or the lack
thereof;</text>
</subparagraph><subparagraph id="ID2ef6bd7a1d7b4db98c22387210359b7f"><enum>(D)</enum><text>requirements for
a co-borrower, including any changes in the applicable interest rates without a
co-borrower;</text>
</subparagraph><subparagraph id="ID7c6b03c7f8f1489fb2c98ced30bd28f3"><enum>(E)</enum><text>potential finance
charges, late fees, penalties, and adjustments to principal, based on defaults
or late payments of the borrower;</text>
</subparagraph><subparagraph id="ID18ba727ede27471aa214c46e7078d272"><enum>(F)</enum><text>fees or range of
fees applicable to the private educational loan;</text>
</subparagraph><subparagraph id="ID35be6d836fc7408292ee878110f44f9b"><enum>(G)</enum><text>the term of the
private educational loan;</text>
</subparagraph><subparagraph id="IDf233d7efaf374a289d36569ec129234d"><enum>(H)</enum><text>whether interest
will accrue while the student to whom the private educational loan relates is
enrolled at an institution of higher education;</text>
</subparagraph><subparagraph id="ID612e217dcfc849cbb904585942eb58e7"><enum>(I)</enum><text>payment deferral
options, including whether the deferment would apply to interest or principal,
or both;</text>
</subparagraph><subparagraph id="IDc21b73c08c194cec8589942fd1ce485c"><enum>(J)</enum><text>general
eligibility criteria for the private educational loan;</text>
</subparagraph><subparagraph id="ID3ff81ceb616446a6b47e010b0850fe18"><enum>(K)</enum><text>an example of the
total cost of the private educational loan over the life of the loan—</text>
<clause id="id58EA69229C39469280D1ECACFE8C0045"><enum>(i)</enum><text>which shall be
calculated using the principal amount and the maximum rate of interest actually
offered by the lender; and</text>
</clause><clause id="id0EAB0F0AFA194764B41737A661225429"><enum>(ii)</enum><text>calculated both
with and without capitalization of interest, if that is an option for
postponing interest payments;</text>
</clause></subparagraph><subparagraph id="ID599ae0dda9754fe3a21ba2b8f609f959"><enum>(L)</enum><text>a statement that
an institution of higher education may have school-specific educational loan
benefits and terms not detailed on the disclosure form;</text>
</subparagraph><subparagraph commented="no" id="id0BA7D516A6854965A938C70E291C360D"><enum>(M)</enum><text>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;</text>
</subparagraph><subparagraph commented="no" id="id47E727A3E9B24B03903014BBD3B3FBE4"><enum>(N)</enum><text>the interest
rates available with respect to such Federal financial assistance through a
program under title IV of the Higher Education Act of 1965;</text>
</subparagraph><subparagraph id="idD36F586D6B3C443BB582A6347B8354B9"><enum>(O)</enum><text>that, as provided
in paragraph (5)—</text>
<clause commented="no" id="idFEBD4F4478B44F88BEBD91E310D5CF8E"><enum>(i)</enum><text>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;
and</text>
</clause><clause commented="no" id="id4E3031EBEF304555AB4705A0BBADD17E"><enum>(ii)</enum><text>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;
and</text>
</clause></subparagraph><subparagraph commented="no" id="idB1DA7AB5F8FF4D1682217ADCBD65954F"><enum>(P)</enum><text>such other
information as the Board shall prescribe, by rule, as necessary or appropriate
for consumers to make informed borrowing decisions.</text>
</subparagraph></paragraph><paragraph id="IDB8725C5EB08E45019E12FB3D06D1C2CE"><enum>(2)</enum><header>Disclosures at
the time of private educational loan approval</header><text>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—</text>
<subparagraph id="ID255ad22e868d45f7845526a8b1eb4d54"><enum>(A)</enum><text>the applicable
rate of interest in effect on the date of approval;</text>
</subparagraph><subparagraph id="IDf65376469583402e9b9f220f64f4540f"><enum>(B)</enum><text>whether the rate
of interest applicable to the private educational loan is fixed or
variable;</text>
</subparagraph><subparagraph id="IDddef91ccb6bf44f38845f347dea4424f"><enum>(C)</enum><text>limitations on
interest rate adjustments, both in terms of frequency and amount, or the lack
thereof;</text>
</subparagraph><subparagraph id="ID4c2dc6a89cde4f8aa8a82d133fa2bc0b"><enum>(D)</enum><text>the initial
approved principal amount;</text>
</subparagraph><subparagraph id="IDa1f60da54c634defb014fcca65e128e7"><enum>(E)</enum><text>applicable
finance charges, late fees, penalties, and adjustments to principal, based upon
borrower defaults or late payments;</text>
</subparagraph><subparagraph id="IDe9801a8d29254b33a43e5537936dc36e"><enum>(F)</enum><text>the maximum term
under the private educational loan program;</text>
</subparagraph><subparagraph id="IDaf82db10bd334517887ae4fc99812718"><enum>(G)</enum><text>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;</text>
</subparagraph><subparagraph id="ID3958fcc87af24f8a90f498af20869986"><enum>(H)</enum><text>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;</text>
</subparagraph><subparagraph id="id5DDAC1B5579A4720A37677D68496BEA8"><enum>(I)</enum><text>payment deferral
options, including whether the deferment would apply to interest or principal,
or both;</text>
</subparagraph><subparagraph id="ID01b8fe29ba69475f8a198a93c9edc922"><enum>(J)</enum><text>whether monthly
payments are graduated;</text>
</subparagraph><subparagraph commented="no" id="idCB34B965F1CC405A9617905831B0411C"><enum>(K)</enum><text>that, as provided
in paragraph (5)—</text>
<clause commented="no" id="idADDBF6E2D3004DDEBED71AF0BA299F93"><enum>(i)</enum><text>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;
and</text>
</clause><clause commented="no" id="idEBB649C225E842538538CAEFE4D666B0"><enum>(ii)</enum><text>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;</text>
</clause></subparagraph><subparagraph commented="no" id="id88432F9D3FDD452D8FE6A93E862FBCE2"><enum>(L)</enum><text>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;</text>
</subparagraph><subparagraph commented="no" id="id2CDF20D9B85A49AB83A3815728034407"><enum>(M)</enum><text>the interest
rates available with respect to such Federal financial assistance through a
program under title IV of the Higher Education Act of 1965;</text>
</subparagraph><subparagraph commented="no" id="idADFEB460A719447AB5A516FCF77918E6"><enum>(N)</enum><text>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; and</text>
</subparagraph><subparagraph commented="no" id="id84EB8B520E3A41F38CAF0A6015EDB8A1"><enum>(O)</enum><text>such other
information as the Board shall prescribe, by rule, as necessary or appropriate
for consumers to make informed borrowing decisions.</text>
</subparagraph></paragraph><paragraph id="id6DA857608C7D4EE3993F02A21A28A0AF"><enum>(3)</enum><header>Disclosures at
the time of private educational loan consummation</header><text>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.</text>
</paragraph><paragraph id="id70CF6911659B49F98E793A4990263005"><enum>(4)</enum><header>Format of
disclosures</header><text>Disclosures required under paragraphs (1), (2), and
(3) shall appear in a clearly legible, uniform format, subject to section
122(c).</text>
</paragraph><paragraph commented="no" id="id13F1BBF78FB14E3E86911AC4D96E4CDB"><enum>(5)</enum><header>Effective
period of approved rate of interest and loan terms</header>
<subparagraph commented="no" id="id5B754E2825864A9EB229B0424E5F5B60"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph commented="no" id="idC41DC9FC5D134B86842FF7F2C87A8E74"><enum>(B)</enum><header>Prohibition on
changes</header><text>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—</text>
<clause id="idF941545689C64340BAEE5F71C03C895D"><enum>(i)</enum><text>the date of
acceptance of the terms of the loan and consummation of the transaction by the
borrower, as described in subparagraph (A); or</text>
</clause><clause id="idCEDCB50378884B929F561DF8060460E2"><enum>(ii)</enum><text>the expiration
of the 30-day period referred to in subparagraph (A).</text>
</clause></subparagraph><subparagraph commented="no" id="idD52BA8C06FDC4E8EAA44DF07164C2AAD"><enum>(C)</enum><header>Prohibition on
disbursement</header><text>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).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idB4144382977F46D78A28EAFAAE185C03"><enum>(6)</enum><header display-inline="yes-display-inline">Right to cancel</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="id0C71BF05B14F40B191E8145E4F529659"><enum>(7)</enum><header>Definitions</header><text>For
purposes of this subsection—</text>
<subparagraph id="id688F48884E66438B9D42A904B57C7117"><enum>(A)</enum><text>the term
<quote>institution of higher education</quote> has the same meaning as in
section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002);</text>
</subparagraph><subparagraph id="id4B30AAD26FB1415A916FA7BB40978521"><enum>(B)</enum><text>the term
<term>private educational lender</term> means—</text>
<clause id="id56183D6007AD4BF5934CC85C5B013895"><enum>(i)</enum><text>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;</text>
</clause><clause id="idDCEB47AAF8854E30A7A4E6EF65FC06B7"><enum>(ii)</enum><text>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; and</text>
</clause><clause commented="no" id="id00B27B98E9AB434D89C77C9125AFA132"><enum>(iii)</enum><text>any other
person engaged in the business of soliciting, making, or extending private
educational loans; and</text>
</clause></subparagraph><subparagraph id="id768E4C652B0442B2B761DCA83D4C540F"><enum>(C)</enum><text>the term
<term>private educational loan</term>—</text>
<clause id="id0E8B2C7CBCB146798910A54C173A834F"><enum>(i)</enum><text>means a loan
provided by a private educational lender that—</text>
<subclause id="id0A36B2DDC42D4725A34D1AE934904F38"><enum>(I)</enum><text>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.); and</text>
</subclause><subclause id="idDBB6438CF1304626BD645E28FA49EA41"><enum>(II)</enum><text>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; and</text>
</subclause></clause><clause id="idC11769E96BAB453A839F461EEE985616"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="ID2e0212771f7d4845bbc6e8ec5f5e7213"><enum>202.</enum><header>Application of
Truth in Lending Act to all private educational loans</header><text display-inline="no-display-inline">Section 104(3) of the Truth in Lending Act
(15 U.S.C. 1603(3)) is amended by inserting <quote>and other than private
educational loans (as that term is defined in section 140(a))</quote> after
<quote>consumer</quote>.</text>
</section><enum>III</enum><header>College
Affordability</header>
<section id="ID44797a61f6fe4f9db5402d07bcc49dfb"><enum>301.</enum><header>Community
Reinvestment Act credit for low-cost loans</header>
<subsection id="id1F5146817E17461A8A74837B9FE39DC0"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection id="id36CF51BC27234899843E0FDAF23CFC4C"><enum>(b)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board shall develop regulations
determining which private educational loans are available for the credit under
this section.</text>
</subsection><subsection id="idEC4E9DB4C0164C45830EE61E91AF9418"><enum>(c)</enum><header>Definition</header><text display-inline="yes-display-inline">As used in this section, the term
<quote>appropriate Federal financial supervisory agency</quote> has the same
meaning as in section 803 of the Community Reinvestment Act of 1977 (12 U.S.C.
2902).</text>
</subsection></section><enum>IV</enum><header>Financial
literacy</header>
<section id="ID3d589419f3104a37b6413757b69b8b41"><enum>401.</enum><header>Coordinated
education efforts</header>
<subsection id="id6F4307D3BC184D4093EBD396DE06D8CF"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary of the
Treasury (in this section referred to as the <quote>Secretary</quote>), 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—</text>
<paragraph id="id6E25AA87B13A4760A1DBF44FE4763677"><enum>(1)</enum><text display-inline="yes-display-inline">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; and</text>
</paragraph><paragraph id="id210B01637C914B8CA58029F2F8CF57AE"><enum>(2)</enum><text>assisting such
students in navigating the financial aid process.</text>
</paragraph></subsection><subsection id="ID61e25e68203d4e62a1e79dacd3eae1d3"><enum>(b)</enum><header>Duties</header><text>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—</text>
<paragraph id="idFAB8D6EC01904D30B0E4B12D7F19C6EE"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="IDc8d117f3feaa4135bc40cf3ddf54dce5"><enum>(2)</enum><text>evaluate the
effectiveness of such programs in terms of measured results, including positive
behavioral change among college students;</text>
</paragraph><paragraph id="ID5e257f2236aa4ed996f558ca3ca55137"><enum>(3)</enum><text>promote the
programs identified as being the most effective; and</text>
</paragraph><paragraph id="ID7d00fb2b6049458a8a7ca65ba8391615"><enum>(4)</enum><text>encourage
institutions of higher education to implement financial education programs for
their students, including those that have the highest evaluations.</text>
</paragraph></subsection><subsection id="id9876D93BB0364DC4A234FAD9EB52D35C"><enum>(c)</enum><header>Report</header>
<paragraph id="id3D51E324A09B492F8F8E58CF594E27D5"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="id9A206B2E40C94A8BA71AADB8FE2FBAB0"><enum>(2)</enum><header>Content</header><text>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.</text>
</paragraph><paragraph id="id3323E525A8DA4823A730DA442041F5A6"><enum>(3)</enum><header>Appearance
before Congress</header><text>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.</text>
</paragraph></subsection></section><enum>V</enum><header>Study and report
on nonindividual information</header>
<section id="idEABD4591B43247EBBD822EFA6DAB2C62"><enum>501.</enum><header>Study and
report on nonindividual information</header>
<subsection id="idAA634885EBC746A28ED012F2274E58D2"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Comptroller General of the United
States (in this section referred to as the <quote>Comptroller</quote>) conduct
a study—</text>
<paragraph id="id91C93609D749490290B859CCA03D9D80"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text>
</paragraph><paragraph id="id6FCB67AB5CFC44FB9352FC6DB98A1537"><enum>(2)</enum><text display-inline="yes-display-inline">to examine whether and to what extent the
inclusion of such nonindividual factors—</text>
<subparagraph id="idF5A9E7C3758B415B8E53A2BC929A649A"><enum>(A)</enum><text display-inline="yes-display-inline">increases access to private educational
loans for borrowers who lack credit history or results in less favorable rates
for such borrowers; and</text>
</subparagraph><subparagraph id="idF90A37737EEF4F5081C6C57D3827A5A8"><enum>(B)</enum><text display-inline="yes-display-inline">impacts the types of private educational
loan products and rates available at certain institutions of higher education,
including a comparison of such impact—</text>
<clause id="idC087E9CD60184215823BE6CFEAB278B4"><enum>(i)</enum><text display-inline="yes-display-inline">on private and public institutions;
and</text>
</clause><clause id="idE50E26F3BE39463E97F1454C66BF5856"><enum>(ii)</enum><text display-inline="yes-display-inline">on historically Black colleges and
universities (defined for purposes of this section as a <quote>part B
institution</quote>, within the meaning of section 322 of the Higher Education
Act of 1965 (20 U.S.C. 1061)) and other colleges and universities; and</text>
</clause></subparagraph></paragraph><paragraph id="id4580CBB282E74DB1B3138541763EEFF1"><enum>(3)</enum><text>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.</text>
</paragraph></subsection><subsection id="idAABC9BEA3BEC4EC196C8948C06B3AECB"><enum>(b)</enum><header>Report</header><text>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.</text>
</subsection></section>
April 21, 2008
Read twice and placed on the calendar