Short title

This Act may be cited as the

Financial Fitness Act

Findings

Congress finds the following:(1)Nearly 43,000,000 people owe an average of $36,406 in Federal student loans, and student loan debt in the United States totals $1,730,000,000,000, growing 6 times faster than the Nation’s economy.(2)Student debt has significant racial equity implications. Almost half of Black college students are using Federal student loans to cover educational costs, and Black college graduates are still substantially more likely than white college graduates to default on their debt within 4 years of graduation (7.6 percent versus 2.4 percent of white graduates). In addition, 4 years after graduation, 48 percent of Black students owe an average of 12.5 percent more than they borrowed. Students who are veterans, parents, first-generation college students, or low income are also likely to face higher risk of default.(3)Since before the COVID–19 pandemic, about 23 percent of Hispanic and Latino college graduates who had taken out loans for tuition and school expenses were behind on their payments, in contrast with 6 percent of white student borrowers. Hispanic and Latino borrowers also were the most likely to delay getting married and having children due to student loan debt.(4)Native American financial status remains among the lowest of all minority populations in the Nation. Native people are the least likely of all population groups, including other minorities, to plan for retirement, have an emergency fund, or have a checking account. Native American and Alaska Native borrowers take on student loan debt at a rate higher than the overall population, 76 percent compared to 69 percent.(5)Among college graduates with any outstanding debt for their education, first-generation college graduates tend to owe more. About two-thirds of first-generation college graduates owe at least $25,000 or more, compared with 57 percent of second-generation college graduates, and 200,000 United States service members owe nearly $3,000,000,000 in student loans.(6)Student debt among older adults has steadily increased, with many individuals taking on debt to finance higher education for their children and grandchildren.(7)Despite the fact that many students and families must make substantial and highly consequential decisions about student loan borrowing and face growing college affordability challenges, less than half of States make personal finance a core part of basic education.(8)Just over 2 in 10 non-retirees under age 45 have retirement savings that meet their age-specific thresholds. 42 percent of Americans age 18–29 have no retirement savings; 26 percent of those age 30–44; 17 percent of those age 45–59; and 13 percent of those over age 60.(9)People with self-directed retirement savings (nearly 7 in 10 non-retired adults) must make decisions about how the money is invested. Six in 10 non-retirees with these self-directed accounts express low levels of comfort in making investment decisions with their retirement savings.(10)The COVID–19 pandemic exacerbated the need to provide families with better tools to weather financial challenges, with a rapid spike in unemployment occurring in mid-2020, along with significant shifts to individuals’ housing and transportation needs.(11)Nearly 1 in 10 student loan borrowers end up in default, and even more struggle to repay their loans, indicating an important need to ensure borrowers can access information to help them navigate repayment and succeed financially.

Personal finance education portal

Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is amended by adding at the end the following:

(n)

Personal finance education portal

(1)

In general

Not later than 3 years after the date of enactment of this Act, the Secretary, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue, shall create a personal finance education portal on a centralized and publicly available website of the Department pertaining to Federal financial aid for the voluntary use by recipients of aid awarded under this title.(2)

Content of personal finance education portal

The personal finance education portal created under paragraph (1) shall include information on personal finance concepts, including the following:(A)Core personal finance concepts, such as earning, saving, investing, spending, and borrowing, including—(i)the concept of compound growth as it applies to savings and retirement savings, with information about the different types of retirement savings accounts; and(ii)budgeting and credit usage.(B)Managing student loan repayment, including—(i)the interaction between savings and retirement decisions and Federal student loan repayment plans;(ii)Federal student loan discharge or forgiveness options;(iii)the types of voluntary benefits employers may use to help workers while they are paying down student loan debt;(iv)tax credits or deductions that are relevant to student loan borrowers in repayment; and(v)any other Federal policies that significantly impact student loan borrowers in repayment, as determined by the Secretary.(C)Any other personal finance concepts determined relevant by the Secretary, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue.(3)

Provision of content

The personal finance content included under paragraph (2) may be provided in an interactive format through text or video.(4)

Analytics

The Secretary, in consultation with the Director of the Bureau of Consumer Financial Protection, the Secretary of the Treasury as chair of the Financial Literacy and Education Commission, and the Commissioner of Internal Revenue, shall review not less than once every three years the utilization of the portal and make such findings publicly available.(5)

Authorization of appropriations

There are authorized to be appropriated such sums as may be necessary to carry out the purposes of this subsection.