II 110th CONGRESS 1st Session S. 511 IN THE SENATE OF THE UNITED STATES February 7, 2007 Mrs. Clinton (for herself, Ms. Mikulski, Mr. Kerry, and Mr. Lieberman) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To provide student borrowers with basic rights, including the right to timely information about their loans and the right to make fair and reasonable loan payments, and for other purposes.

1.

Short title

This Act may be cited as the Student Borrower Bill of Rights Act of 2007.

2.

Findings

Congress finds the following: (1)Postsecondary education is increasingly a requirement for a high-paying job in the modern economy; college graduates earn, on average, $1,000,000 more over their working lives than people who stop their education after secondary school. (2)As the cost of college increases and as need-based grant aid stagnates, more and more students go into debt to pursue higher education and better economic opportunities. (3)The amount students borrowed from Federal student loan programs increased by 76 percent from academic year 1994–1995 to academic year 2004–2005, totaling $54,000,000,000 in academic year 2004–2005. (4)The fastest growing source of financial aid is private credit, increasing by 734 percent from academic year 1994–1995 to academic year 2004–2005, totaling $14,000,000,000 in academic year 2004–2005. (5)In academic year 2003–2004, 62 percent of students who graduated with a baccalaureate degree from a public college or university graduated with debt, and their debt averaged $15,500, and 73 percent of students who graduated with a baccalaureate degree from a private college or university graduated with debt, and their debt averaged $19,400. (6)Some student borrowers need additional timely, clear, and complete information about the terms and conditions of their loans, beyond the counseling and information currently provided. (7)High-interest rates and high fees have caused the balance owed by some borrowers to balloon in short periods of time. (8)Income-contingent repayment plans are unavailable to many borrowers who, as a result, are required to make unaffordable high monthly payments. (9)The prospect of high levels of debt, burdensome monthly payments, and confusion about rights and repayment options deters people from taking out loans and pursuing higher education. (10)There is a need to guarantee student borrowers that they will have access to timely information about student loans and that their loan repayments will be affordable.

3.

Definition of lender

In this Act, the term lender means any public or private entity that— (1)lends funds to an individual to enable such individual to attend an institution of higher education; or (2)insures, guarantees, or collects on a loan made to an individual to enable such individual to attend an institution of higher education.

4.

A right to shop in a free marketplace

(a)

Sense of the Senate

It is the sense of the Senate that the Department of Education should vigorously enforce rules requiring lenders to complete lender verification certificates in a timely manner for borrowers seeking to consolidate loans. (b)

Accurate and comprehensive reporting to credit bureaus

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended— (1)in section 430A(a)— (A)by striking agreements with credit bureau organizations and inserting an agreement with each national credit bureau organization (as described in section 603(p) of the Fair Credit Reporting Act); (B)in paragraph (2), by striking and after the semicolon; (C)by redesignating paragraph (3) as paragraph (4); (D)in paragraph (4), as redesignated by subparagraph (C), by striking the period at the end and inserting ; and; (E)by inserting after paragraph (2) the following: (3)of any on time payments made for such loan; ; and (F)by inserting at the end the following: (5)that such loan is a student loan. ; and (2)in section 463(c)— (A)in paragraph (1), by striking cooperative agreements with credit bureau organizations and inserting a cooperative agreement with each national credit bureau organization (as described in section 603(p) of the Fair Credit Reporting Act); and (B)in paragraph (2)— (i)in subparagraph (B), by striking and after the semicolon; (ii)in subparagraph (C), by striking the period at the end and inserting ; and; and (iii)by adding at the end the following: (D)any on time payments made for such loan; and (E)such loan as a student loan. . (c)

A right To reconsolidate loans

(1)

Part B

Section 428C(a)(3)(B) of the Higher Education Act of 1965 (20 U.S.C. 1078–3(a)(3)(B)) is amended to read as follows: (B)(i)Except as provided in clause (ii), an individual who has received a consolidation loan under this section, or the consolidation lender, shall pay a fee of 1 percent of the balance owed on the sum of such loans to be consolidated to the Department to obtain a subsequent consolidation loan under this section. (ii)An individual who has received a consolidation loan under this section may obtain a subsequent consolidation loan under this section for no fee if such individual was eligible to obtain a subsequent consolidation loan pursuant to this subparagraph on the day before the date of enactment of the Student Borrower Bill of Rights Act of 2007. . (2)

Part d

Section 455(g) of the Higher Education Act of 1965 (20 U.S.C. 1087e(g)) is amended— (A)by striking A borrower and inserting the following: (1)

In general

A borrower ; and (B)by adding at the end the following: (2)

Refinancing authority

Notwithstanding any other provision of this part, a borrower may refinance a Federal Direct Consolidation Loan. .

5.

A right to timely information about loans

(a)

In general

Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) is amended by adding at the end the following: I

Student borrower bill of rights

499.

Definitions

In this part: (1)

Federal student loan

The term Federal student loan means a loan made, insured, or guaranteed under this title (except loans made to parents under section 428B or under the Federal Direct PLUS Loan program). (2)

Lender

The term lender means any public or private entity that— (A)lends funds to an individual to enable such individual to attend an institution of higher education; or (B)insures, guarantees, or collects on a loan made to an individual to enable such individual to attend an institution of higher education.

499A.

A right to timely information about loans

(a)

Regular bill providing pertinent information about a loan

A lender of a Federal student loan shall provide the borrower of such loan a bill each month or, in the case of a loan payable less frequently than monthly, a bill that corresponds to each payment installment time period, including a clear and conspicuous notice of— (1)the borrower's principal borrowed; (2)the borrower's current balance; (3)the interest level on such loan; (4)the amount the borrower has paid in interest; (5)the amount of additional interest payments the borrower is expected to pay over the life of the loan; (6)the total amount the borrower has paid for the loan, including the amount the borrower has paid in interest, the amount the borrower has paid in fees, and the amount the borrower has paid against the balance; (7)a description of each fee the borrower has been charged for the current payment period; (8)the applicable monthly payment amount set by the Secretary under section 499B for such borrower and the amount such borrower would owe each month according to the borrower's repayment plan absent the provisions of section 499B, or, in the case of a loan payable less frequently than monthly, the amount that corresponds to the payment installment time period taking into consideration the applicable monthly payment amount set by the Secretary under section 499B for such borrower and the amount such borrower would owe that corresponds to the payment installment time period according to the borrower's repayment plan absent the provisions of section 499B; (9)the date by which the borrower needs to make the payment described in paragraph (8) to avoid additional fees; (10)the amount of such payment that will be put towards interest, the balance, and any fees; (11)the lender’s address and toll-free phone number for payment purposes; (12)the lender’s address and toll-free number for billing error purposes; and (13)any change in the terms and conditions of the loan. (b)

Information provided five months after ceasing To be at least a half-time student

A lender of a Federal student loan shall provide to the borrower of such loan, on the date that is 5 months after the borrower has ceased to be at least a half-time student at the institution of higher education for which the loan was made, who requests it, and make readily available on the Internet, a clear and conspicuous notice of not less than the following information: (1)The conditions under which a borrower could be charged any fee, and the amount of such fee. (2)The conditions under which a loan would default and the consequences of default. (3)The borrower’s rights and options, including repayment options, deferments, forbearances, and discharge rights to which the borrower may be entitled. (4)Legitimate resources, including nonprofit organizations, advocates, and counselors (including the Office of the Ombudsman at the Department), where borrowers can receive advice and assistance, if such resources exist. (5)Information about how a borrower can appeal to the Department a decision made by a lender about their loan. (c)

Information provided during delinquency

(1)

Sense of the senate

It is the sense of the Senate that the Secretary should vigorously enforce rules requiring that a lender of a Federal student loan provide a borrower in delinquency information about such borrower’s rights and options, means of avoiding default, and the consequences of default, at such a time and in such manner as is most useful for such borrower. (2)

Additional information

In addition to any other information required under law, a lender of a Federal student loan shall provide a borrower in delinquency with a clear and conspicuous notice of the date on which the loan will default if no payment is made, the minimum payment that must be made to avoid default, discharge rights to which the borrower may be entitled, legitimate resources, including nonprofit organizations, advocates, and counselors (including the Office of the Ombudsman at the Department), where borrowers can receive advice and assistance, if such resources exist, and information about how a borrower can appeal to the Department a decision made by a lender about their loan. (d)

Information provided during default

A lender of a Federal student loan shall provide a borrower in default, on not less than 2 separate occasions, with a clear and conspicuous notice of not less than the following information: (1)The options available to the borrower to get out of default. (2)The cost and conditions of each option. (3)Information about how a borrower can appeal to the Department a decision made by a lender about their loan. (e)

Sense of the Senate

It is the sense of the Senate that the Department should— (1)write and distribute a training manual for organizations, advocates, and counselors who help people who are having problems repaying Federal student loans, describing— (A)the rights of such borrowers; and (B)the Department’s policies for dealing with particular programs; and (2)provide to such organizations, advocates, and counselors technical assistance where needed.

. (b)

Information provided during the transfer of a loan to a new servicer

Section 428(b)(2)(F) of the Higher Education Act of 1965 (20 U.S.C. 1078(b)(2)(F)) is amended— (1)in clause (i)— (A)in subclause (III), by striking and after the semicolon; (B)in subclause (IV), by striking and after the semicolon; and (C)by adding at the end the following: (V)the effective date of the transfer; (VI)the date the current servicer will stop accepting payments; (VII)the date at which the new servicer will begin accepting payments; and (VIII)that the transfer does not affect any term or condition of their loan documents other than those terms directly related to the servicing of the loan; ; (2)in clause (ii)(II), by striking the comma at the end and inserting ; and; and (3)by adding at the end the following: (iii)the transferee will be required, during the 60-day period beginning on the effective date of the transfer, to not treat a payment as late if the borrower mistakenly sends such payment to the transferor instead of to the transferee and the payment is otherwise on time, . (c)

Information provided during consolidation

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 the lender of the consolidation loan shall, upon application for such loan, provide the borrower with a clear and conspicuous notice of not less than the following information: (i)the effects of consolidation on total interest to be paid, fees to be paid, and length of repayment, relative to the borrower's currently scheduled total interest to be paid, fees to be paid, and length of repayment at the borrower's current interest rate; (ii)the effects of consolidation on a borrower's underlying loan benefits, including loan forgiveness, cancellation, deferment, and reduced interest rates on those underlying loans; (iii)the ability of the borrower to prepay the loan, pay on a shorter schedule, and to change repayment plans; (iv)that borrower benefit programs may vary among different loan holders, and a description of how the borrower benefits may vary among different loan holders; (v)the tax benefits for which borrowers may be eligible; (vi)the consequences of default; and (vii)that by making the application the applicant is not obligated to agree to take the consolidation loan; and . (d)

Information provided during consolidation or reconsolidation of a Federal student loan with a private loan

A lender shall, upon application for a consolidation or reconsolidation loan of one or more loans made, insured, or guaranteed under part B, part D, or part E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071, 1087a, 1087aa) with one or more private loans, provide the borrower with a clear and conspicuous notice of not less than the following information: (1)That the consolidation or reconsolidation loan would be a private loan, not a Federal loan. (2)A description of the benefits and protections for the loan made, insured, or guaranteed under part B, part D, or part E that the borrower would lose by consolidating such loan with a private loan. (3)That the lender may be eligible to consolidate two or more loans made, insured, or guaranteed under part B, part D, or part E within the Federal loan program.

6.

A right to make affordable loan payments

(a)

Affordable loan payments

Part I of title IV of the Higher Education Act of 1965, as added by section 5, is amended by adding at the end the following:

499B.

A right to make affordable loan payments

(a)

Limit on monthly payment amounts to an affordable level

(1)

In general

(A)

Limitation

(i)

In general

With respect to Federal student loans that are made, insured, or guaranteed after the date of enactment of this section, the Secretary shall limit the total monthly payment amount for all of such loans of a student borrower to not more than the amount determined pursuant to subparagraph (B), except as provided in subsection (b)(3). (ii)

Commencement

The limit on the monthly payment amount described in clause (i) shall begin the day after 1 year after the date the student ceases to carry at least one-half the normal full-time academic workload (as determined by the institution). (B)

Formula amount

(i)

In general

The amount referred to in subparagraph (A) shall be the same amount for each month of a year. Such amount shall be an amount that is the quotient of the sum of 10 percent of the borrower's annual adjusted gross income between 100 percent and 200 percent of the poverty line for the previous year and 20 percent of the borrower's annual adjusted gross income above 200 percent of the poverty line for the previous year divided by 12. (ii)

Poverty line

In this subparagraph, the term poverty line means the poverty line described in section 673 of the Community Services Block Grant Act (42 U.S.C. 9902), applicable to a family of the size involved. (2)

Provision of information to the secretary

(A)

In general

The limit on the monthly payment amount set by the Secretary under paragraph (1) shall apply only if a borrower provides the Secretary, in such form and at such time— (i)such information as the Secretary shall require to determine the monthly payment amount that is applicable for such borrower; and (ii)certification that the borrower is employed full time or is actively seeking full-time employment. (B)

Update to information

The Secretary shall require a borrower to— (i)provide the information required under subparagraph (A)(i) annually for the term of the loan of such borrower; or (ii)during each year for the term of the loan of such borrower, authorize the Secretary to obtain the information required under subparagraph (A)(i) from the Internal Revenue Service for such year. (3)

Continuous update

Upon receiving information under paragraph (2)(B), the Secretary shall revise the limit on the monthly payment amount for such borrower under paragraph (1), as necessary. (4)

Applicability to all repayment plans

Regardless of which repayment plan a borrower of a loan selects under this title, the limit on the monthly payment amount set by the Secretary under paragraph (1) shall apply to the monthly repayment amount applicable for such repayment plan. (5)

No fees or charges

Notwithstanding any other term or condition of Federal student loans of a borrower that are made, insured, or guaranteed after the date of enactment of this section, if the borrower pays the maximum monthly payment amount that is applicable for the borrower for such loans, as determined under this section, on time according to the terms and conditions of such loans, such borrower may not be charged any late fee, underpayment fee, or finance charge for such loans for such month. (6)

Subsidized loans

In the case of a Federal student loan made, insured, or guaranteed after the date of enactment of this section for which an interest subsidy is paid under section 428(a), if the amount owed each month in interest payments for such loan exceeds the applicable amount for such borrower as determined under this section, and, at the discretion of the Secretary, if the borrower pays such applicable amount, the Federal Government shall pay the difference between such amount owed in interest payments and such amount that has been determined is applicable. (b)

Study

(1)

In general

The Secretary shall conduct a study to determine what additional protections beyond those described in subsection (a) are necessary, if any, to ensure that monthly payment amounts for student borrowers of different incomes and with different costs of living are affordable. (2)

Content of study

The study under paragraph (1) shall— (A)consider the payments required of student borrowers in other countries, including the United Kingdom, Australia, and New Zealand, and compare such payments to the payments required of student borrowers in the United States; and (B)be completed and submitted to the appropriate committees of Congress not later than 12 months after the date of enactment of this section. (3)

Additional limits on monthly repayments

If the Secretary determines in the study under paragraph (1) that additional protections are necessary to ensure that monthly payment amounts of student borrowers of Federal student loans made, insured, or guaranteed after the date of enactment of this section are affordable, the Secretary may establish rules based on such study that limits the monthly payment amount for a student borrower to a level that is affordable for such borrower. (c)

Notification of right To make payments of more than minimum

Notwithstanding any other provision of this section, a borrower whose applicable monthly payment amount set by the Secretary under this section is less than the amount such borrower would owe each month according to the borrower's repayment plan absent the provisions of this section— (1)shall be notified of the amount the borrower would owe each month according to the borrower's repayment plan absent the provisions of this section; and (2)may pay the amount described in paragraph (1) or another amount that is greater than the applicable monthly payment amount set by the Secretary under this section.

. (b)

Income contingent repayment

Section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)) is amended by adding at the end the following: (7)

Tax burden

The balance due on a loan made under this part at the end of the maximum repayment period is exempted from the definition of income for the purpose of taxes. . (c)

Discharge rights in cases of severe need

(1)

Discharge and cancellation rights in cases of disability

(A)

Amendments

(i)

FFEL and direct loans

Section 437(a) of the Higher Education Act of 1965 (20 U.S.C. 1087(a)) is amended by striking or becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary) and inserting or is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted, or can be expected to last, for a continuous period of not less than 60 months. (ii)

Perkins

Section 464(c)(1)(F) of the Higher Education Act of 1965 (20 U.S.C. 1087dd(c)(1)(F)) is amended by striking or if he and all that follows through the semicolon and inserting or if the borrower is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted, or can be expected to last, for a continuous period of not less than 60 months;. (B)

Sense of the senate

It is the Sense of the Senate that the Department of Education should continue to administer the discharge and cancellation right provisions of the Higher Education Act of 1965 amended in subparagraph (A) in such a way as to prevent fraud and abuse. (2)

Discharge rights in cases of bankruptcy

(A)

Sense of the senate

It is the Sense of the Senate that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law 109–8) affords sufficient protections to prevent fraud and abuse in the carefully regulated discharge of student loans in bankruptcy. (B)

Amendment

Section 523(a)(8) of title 11, United States Code, is amended to read as follows: (8)unless— (A)excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for a debt that does not meet the requirements of subparagraph (B) and that is— (i)an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; (ii)an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (iii)an educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual; or (B)such debt is for an overpayment, loan, obligation, or qualified education loan described in clause (i), (ii) or (iii) of subparagraph (A) that— (i)was made, entered into, or incurred after the date of enactment of the Student Borrower Bill of Rights Act of 2007; and (ii)first became due more than 7 years (exclusive of any applicable suspension of the repayment period) before the date of the filing of the petition; .

7.

A right for interest rates and fees to be reasonable

(a)

In general

Part I of title IV of the Higher Education Act of 1965, as added by section 5 and amended by section 6, is further amended by adding at the end the following:

499C.

A right for interest rates and fees to be reasonable

(a)

In general

The Secretary shall conduct a study of the interest rates and fees that are charged of borrowers of private student loans, including— (1)the conditions under which the interest rate charged of such a borrower is raised or lowered, including the conditions under which the interest rate is raised on delinquent payments, and the amount and frequency of such interest rate changes; (2)the conditions under which fees are charged of such a borrower and frequency of such fees, including fees that are charged as a condition of taking a deferment or forbearance, and the amount and frequency of such fees; (3)identifying such practices as described in paragraphs (1) and (2) that are exploitative or unreasonable; and (4)determining what remedies exist for such practices identified in paragraph (3). (b)

Maximum collection fees

(1)

In general

Notwithstanding any other provision of this title, the fee charged to a borrower for collecting on a defaulted Federal student loan shall not exceed the lesser of the expenses incurred in collecting on such loan or the amount calculated for such loan based on the following: (A)In the case of a defaulted loan that is paid off through consolidation by the borrower under this title, the amount that is 7.5 percent of the balance of such loan. (B)In the case of a defaulted loan rehabilitated under part D or pursuant to section 428F(a)(1)(A), the amount that is 13.5 percent of the balance of such loan. (C)In the case of a defaulted loan collected under part D or part B and not described in subparagraph (A) or (B), the amount that is 18 percent of the balance of such loan. (2)

Itemized list of expenses

An entity that charges a borrower for collecting on a defaulted Federal student loan shall provide such borrower an itemized list of any expenses incurred in collecting on such loan. (c)

Cap on total charges

(1)

In general

The Department shall set a cap on the maximum total amount that can be charged of a borrower on a Federal student loan, including all interest and fees, as a percentage of the original loan balance, over a period of 10 years, 15 years, and 20 years. (2)

Level of cap

The cap set under paragraph (1) shall be set— (A)at the minimum level beyond which additional amount charged on a loan is unreasonable or exploitative; and (B)for each time period, at a level that is higher than the amount the borrower, who makes regularly scheduled payments in accordance with a standard repayment plan, currently pays over such time period.

. (b)

Conforming amendments

(1)

Loans paid off through consolidation

Section 428(c)(6)(B) of the Higher Education Act of 1965 (20 U.S.C. 1078(c)(6)(B)) is amended— (A)by striking clause (i) and inserting the following: (i)on or after October 1, 2007, not charge the borrower collection costs in excess of the amount provided in section 499C(b)(1)(A); and ; and (B)in clause (ii), by striking clause (i)(I) and inserting clause (i). (2)

Rehabilitated loans

Section 428F(a)(1)(C) of the Higher Education Act of 1965 (20 U.S.C. 1078–6(a)(1)(C)) is amended by striking not to exceed and all that follows through the period and inserting not to exceed the amount provided in section 499C(b)(1)(B)..

8.

A right to not be exploited

Part I of title IV of the Higher Education Act of 1965, as added by section 5 and amended by sections 6 and 7, is further amended by adding at the end the following:

499D.

A right to not be exploited

(a)

Publication of job placement information

(1)

In general

Each institution of higher education (as defined in section 102) that enrolls a student receiving assistance under this Act and that is determined by the Secretary, in accordance with paragraph (2), to be a disclosure institution, shall make publicly available and include in institution materials (including applications for admission to the institution) a clear and conspicuous notice of group level job placement information for each of the past 5 years of graduates (or, if the institution has not been in operation for 5 years, for as long as the institution has been in operation), including not less than the following information: (A)The percentage of students entering the institution who graduated within 150 percent of their expected graduation date. (B)The percentage of graduates employed within 6 months of graduating. (C)The percentage of graduates employed in the field that the graduates studied at the institution. (D)The median annual earnings of those graduates who are employed. (E)The percentage of former students of the institution who took out a loan to attend the institution who defaulted on such loan at least once after leaving the institution. (2)

Disclosure institution

In determining whether an institution is a disclosure institution, the Secretary primarily shall consider whether the institution makes claims relating to the employment prospects of the graduates of the institution. In addition, the Secretary shall consider each of the following criteria as a supplementary factor in determining whether an institution is a disclosure institution with respect to a particular year: (A)More than 75 percent of the institution’s revenue for such year is loan volume. (B)Fewer than 50 percent of the students enrolled in the institution the previous year, who did not graduate from such institution in such previous year, are still enrolled in the institution. (C)More than 10 percent of the students who have taken out loans to attend the institution have defaulted on such loans at least once after leaving the institution. (3)

Records

Each institution of higher education (as defined in section 102) that enrolls a student receiving assistance under this Act and that is determined by the Secretary, in accordance with paragraph (2), to be a disclosure institution, shall keep, for a period of 5 years, the records that substantiate the information the institution is required to publicize under paragraph (1). (b)

Sense of the Senate

It is the sense of the Senate that the Secretary should enforce the rights of borrowers of private student loans and Federal student loans to raise claims and defenses related to the actions of for-profit institutions of higher education against lenders from which the borrowers borrowed money to attend such institutions, including the Federal Trade Commission Rule. (c)

Appeal to the Secretary

(1)

In general

(A)

In general

Any borrower of a Federal student loan who has suffered an economic loss as a result of a violation of the borrower's rights under this title shall have the right to appeal such action to the Secretary. (B)

Rights of borrower

For the purpose of this subsection, the rights of a borrower described in subparagraph (A) are those rights involved in the solicitation for, disbursement of, repayment of (including rights to terminate or suspend repayment), or collection of a Federal student loan, including— (i)such rights described in this part and under the Student Borrower Bill of Rights Act of 2007 and the amendments made by such Act; and (ii)borrower rights under the following sections of this Act: 427, 428, 428C, 428F, 428J, 428K, 430A, 433, 437, 438, 463, 463A, 464, 465, 484, 484B, 485 (except subsections (f) and (g) of section 485), and 488A. (2)

Notification

Not less than 30 days before making an appeal under this subsection, the borrower shall jointly notify the Secretary and the party whose action the borrower wishes to appeal (referred to in this subsection as the respondent) that the borrower intends to make an appeal, the action that the borrower intends to appeal, and the economic loss that the borrower suffered as a result of the violation. (3)

Settlement

(A)

In general

After the notification under paragraph (2), the borrower and the respondent shall make a good faith effort to settle the dispute. If no settlement is reached or if the respondent fails to respond to the borrower's notice within 30 days of the borrower providing such notice, the borrower may appeal the applicable action to the Secretary, which shall adjudicate the borrower's claim in a fair, impartial, and timely manner. In so doing, the Secretary may, if it should choose, develop a policy by which borrowers who make appeals work with the office of the Ombudsman or another relevant office within the Department to facilitate dispute resolution before providing a formal hearing. Whether or not the Secretary develops such a policy, the Secretary shall provide a formal hearing of the borrower's appeal within 60 days of the start of the appeal, unless the Secretary determines that there is no basis for such a hearing or if the borrower making the appeal provides written consent to waive the borrower's right to a hearing or to delay or withdraw the appeal. (B)

Judicial review

Any borrower who is adversely affected by the final agency action shall be entitled to judicial review of such action pursuant to section 706 of title 5, United States Code. (4)

Information

The Secretary shall make publicly available on the Internet and elsewhere information about how borrowers can make appeals under this subsection and in what circumstances they can do so. (5)

Same rights

Borrowers shall have the same right to appeal, including the same rights and remedies, whether their loans are held under part B, part D, or part E, and whether the respondent is the Department or another lender that participates in programs described in part B, part D, or part E. (6)

Inapplicability of apa

The Secretary shall not be required to comply with the provisions of subchapter II of chapter 5, and chapter 7, of title 5, United States Code (commonly referred to as the Administrative Procedure Act), in implementing this subsection, except as provided in paragraph (3)(B). (d)

Admissions officers as salespersons

Notwithstanding any other provision of this Act, an institution of higher education that does not comply with section 487(a) by violating paragraph (20) of such section shall be liable to a borrower of a Federal student loan taken out to attend such institution for the entire amount of such loan. (e)

Right To pay off principal faster than scheduled

A lender of a Federal student loan shall provide a borrower who pays more than the amount required for any regularly scheduled payment an easy and unbiased means of choosing whether such overpayment payment should count as a— (1)prepayment for a subsequently scheduled payment; or (2)payment against the principal owed on such loan.

.

9.

Preferred lender requirements

Section 487(a) of the Higher Education Act of 1965 (20 U.S.C. 1088) is amended by adding at the end the following: (24)The institution will not cause any unnecessary loan processing delay for a borrower who uses a lender that is not recommended or suggested by the institution. .