[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2877 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2877

    To establish a matched savings program for low-income students.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 21, 2023

Ms. Sinema (for herself and Mr. Romney) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
    To establish a matched savings program for low-income students.

    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 ``Earn to Learn Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Skyrocketing costs of higher education are outpacing 
        available financial aid. Individuals in the United States owe 
        more than $1,700,000,000,000 in student loan debt, and more 
        than 3,000 student loan borrowers default on a student loan 
        every day, many of whom did not complete their educational 
        program before obtaining a degree.
            (2) The cost of paying for public higher education and 
        workforce training programs continues to rise while the 
        purchasing power of Federal Pell Grant aid has significantly 
        diminished.
            (3) The confluence of these issues forces prospective 
        students to make the tough choice between foregoing 
        postsecondary education and borrowing enough money to pay for 
        it, an amount that is often many times their annual salary and 
        can remain a financial burden for decades after these students 
        graduate.
            (4) The higher rates of loan delinquencies and default 
        among low- and moderate-income populations often lead to 
        increased financial hardship, fewer assets, and lower net 
        worth.
            (5) In 2013, the Brookings Institute found that the 
        increasing debt burden represents a drag on recent graduates 
        and also serves as a deterrent to would-be students who may 
        question the trade-off between the debt burden and the payoff 
        of a college degree.
            (6) During the 2015-2016 academic year, the Department of 
        Education found that nearly 3 in 4 students experienced unmet 
        need, and that unmet need among postsecondary students had 
        risen by 23 percent since the 2011-2012 academic year.
            (7) The Federal Reserve System has determined student loan 
        payments are displacing retirement savings, home ownership, 
        small business development, and other forms of building wealth.
            (8) The Report on the Economic Well-Being of United States 
        Households in 2018 by the Federal Reserve found that 2 in 3 
        graduates with a bachelor's degree or higher feel that their 
        educational investment paid off financially, but only 3 in 10 
        students who started higher education programs but did not 
        complete a degree share this view.
            (9) The United States urgently needs a new, innovative 
        approach to financial aid to help low-income students achieve 
        their educational goals, graduate with affordable amounts of 
        student loan debt, and improve their financial capability.

SEC. 3. PURPOSE.

    It is the purpose of this Act to--
            (1) establish a proven and innovative matched savings 
        program for low-income students that provides the financial 
        resources and support those students need to attain their 
        educational goals;
            (2) provide a much-needed supplement to traditional 
        financial aid options through matched savings;
            (3) give students the tools to succeed by giving students 
        the opportunity to invest in their education and to improve 
        their financial capability through financial empowerment 
        training and success coaching; and
            (4) help students--
                    (A) develop healthy financial habits and life 
                skills;
                    (B) prepare to embark on a lifetime of healthy 
                financial practices after graduation; and
                    (C) minimize or eliminate student loan debt.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) 529 account.--The term ``529 account'' means a 
        qualified tuition program as defined in section 529(b) of the 
        Internal Revenue Code of 1986.
            (2) Eligible educational institution.--The term ``eligible 
        educational institution'' means--
                    (A) an institution of higher education, as defined 
                in section 102 of the Higher Education Act of 1965 (20 
                U.S.C. 1002); or
                    (B) an area career and technical education school, 
                as defined in section 3(3) of the Carl D. Perkins 
                Career and Technical Education Act of 2006 (20 U.S.C. 
                2302(3)).
            (3) Eligible entity.--The term ``eligible entity'' means a 
        State or a nonprofit organization.
            (4) Eligible student.--The term ``eligible student'' means 
        an individual who--
                    (A) is selected to participate in a postsecondary 
                education match savings account program;
                    (B) has been admitted to an eligible educational 
                institution;
                    (C) is a student from a low-income family, as 
                determined by the eligible entity;
                    (D) successfully completes a required prerequisite 
                personal finance training program;
                    (E) agrees to contribute savings to the 
                postsecondary education match savings account 
                administered by the eligible entity under this section; 
                and
                    (F) meets any other eligibility criteria as defined 
                by the eligible entity.
            (5) Financial capability training platform.--The term 
        ``Financial Capability Training Platform'' means a program for 
        use by a postsecondary education match savings account program 
        carried out with a grant under section 5 that--
                    (A) delivers financial capability training to 
                participating students that is designed to help 
                students improve their financial capability and overall 
                financial well-being;
                    (B) includes an initial assessment to identify 
                individual learning goals and objectives;
                    (C) creates a personal and dynamic learning 
                experience for each individual participant, including 
                ongoing assessments and interim milestones related to 
                learning objectives and longer-term goals; and
                    (D) includes modules on student loans, financial 
                aid, budgeting and credit, consumer debt, housing 
                costs, retirement, the importance of emergency savings, 
                banking (including checking and savings accounts), 
                credit use and interest rates, predatory lending 
                practices, privacy, and security, which shall be 
                conducted by or at the direction of the eligible 
                entity.
            (6) Postsecondary education match savings account.--The 
        term ``postsecondary education match savings account'' means an 
        account that is--
                    (A) a custodial account; or
                    (B) a 529 account.
            (7) Program guide.--The term ``Program Guide'' means a 
        guide that includes program policies and procedures, a savings 
        plan agreement template, a withdrawal form template, 
        recommended timelines, other key forms, and the structure for 
        implementing and reporting program results for a postsecondary 
        education match savings account program carried out with a 
        grant under this section.
            (8) Reporting dashboard.--The term ``Reporting Dashboard'' 
        means a robust online data portal for postsecondary education 
        match savings account programs carried out with a grant under 
        this section that--
                    (A) allows eligible entities to monitor student 
                progress, track achievement, and measure relevant 
                behavioral change;
                    (B) standardizes and facilitates student evaluation 
                across participating eligible educational institutions; 
                and
                    (C) is in compliance with the requirements of 
                section 444 of the General Education Provisions Act 
                (commonly known as the ``Family Educational Rights and 
                Privacy Act of 1974'') (20 U.S.C. 1232g).
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (10) Student with preliminary eligibility.--The term 
        ``student with preliminary eligibility'' means an individual 
        who--
                    (A) is from a low-income family, as determined by 
                an eligible entity;
                    (B) plans to attend an eligible educational 
                institution; and
                    (C) meets the requirements described in 
                subparagraphs (E) and (F) of paragraph (4).
            (11) Success coaching model.--The term ``Success Coaching 
        Model'' includes--
                    (A) financial capability training to address 
                budgeting, managing student debt, savings, debit 
                management, credit cards, retirement readiness, and 
                credit reports;
                    (B) postsecondary education readiness training that 
                provides mentoring to help students be better prepared 
                for the challenges of postsecondary education; and
                    (C) workforce readiness training to learn 
                interviewing, resume skills, and career exploration.

SEC. 5. POSTSECONDARY EDUCATION MATCH SAVINGS ACCOUNT DEMONSTRATION 
              GRANT PROGRAM.

    (a) Grant Established.--
            (1) In general.--Not later than 9 months after the date of 
        enactment of this Act, the Secretary shall establish a 
        postsecondary education match savings account demonstration 
        grant program described in this section, through which the 
        Secretary shall award grants, on a competitive basis, to 
        eligible entities to enable those eligible entities to carry 
        out the activities described in subsection (e).
            (2) Tools for grantees.--The Secretary shall develop the 
        Reporting Dashboard, Financial Capability Training Platform, 
        Program Guide, and Success Coaching Model and make those tools 
        available to grantees.
            (3) Pell eligibility not affected.--The Secretary shall 
        ensure that, notwithstanding any other provision of law--
                    (A) participation in the grant program shall not 
                affect a student's eligibility for a Federal Pell Grant 
                under section 401 of the Higher Education Act of 1965 
                (20 U.S.C. 1070a); and
                    (B) funds deposited in a postsecondary education 
                match savings account by a participating student, as 
                well as any matching funds under this section, shall 
                not be considered when a determination is made about 
                that student's eligibility for Federal student aid 
                under title IV of the Higher Education Act of 1965 (20 
                U.S.C. 1070 et seq.), including for a Federal Pell 
                Grant.
    (b) Application.--An eligible entity that desires to participate in 
the grant program under this section shall submit an application to the 
Secretary at such time, in such manner, and containing such information 
as the Secretary may determine, including, at a minimum--
            (1) a demonstration of--
                    (A) a commitment of non-Federal matching funds at a 
                ratio of 1:1 (which non-Federal funds may be provided 
                by an entity other than the eligible entity);
                    (B) the ability to launch and implement the 
                program; and
                    (C) a plan for compliance with evaluation and 
                program monitoring; and
            (2) an assurance that the applicant will utilize the 
        Reporting Dashboard, Financial Capability Training Platform, 
        and Success Coaching Model developed by the Secretary under 
        subsection (a)(2).
    (c) Selection.--
            (1) Priority.--In selecting eligible entities to 
        participate in the grant program under this section, the 
        Secretary shall give priority to eligible entities that--
                    (A) target eligible students and students with 
                preliminary eligibility at a statewide level with 
                networks of participating eligible educational 
                institutions; and
                    (B) commit to supporting selected students through 
                the student's graduation from an eligible educational 
                institution.
            (2) Diversity of projects.--The Secretary shall ensure, to 
        the maximum extent practicable, that the eligible entities 
        awarded grants under this section include eligible entities 
        that represent a range of communities (both rural and urban) 
        and diverse populations.
    (d) Amount.--A grant awarded under this section shall be in an 
amount not to exceed the lesser of--
            (1) the aggregate amount of funds committed as matching 
        contributions from non-Federal public or private sector 
        sources; or
            (2) $10,000,000.
    (e) Uses of Funds.--
            (1) In general.--An eligible entity receiving a grant under 
        this section shall use the grant funds to--
                    (A) select eligible students, or students with 
                preliminary eligibility, in the State in which the 
                eligible entity is located to participate in the grant 
                program;
                    (B) provide selected students with financial 
                literacy education using the Success Coaching Model;
                    (C) after ensuring that a selected eligible student 
                or selected student with preliminary eligibility has 
                completed an agreement regarding the terms and 
                conditions of the postsecondary education match savings 
                account, establish a postsecondary education match 
                savings account for each participating eligible student 
                or student with preliminary eligibility and allow 
                students and their families to deposit funds in that 
                account to save for attendance at an eligible 
                educational institution; and
                    (D) reserve matching funds for participating 
                students in accordance with paragraph (2).
            (2) Matching funds.--
                    (A) In general.--Upon a participating student or 
                student's family depositing $100 into a postsecondary 
                education match savings account for the appropriate 
                academic year, the eligible entity shall provide a 
                match of $8 into the student's postsecondary education 
                match savings account for each subsequent dollar 
                deposited by the student or student's family.
                    (B) Withdrawal from school.--If a participating 
                student withdraws from an eligible educational 
                institution during the drop-add period at that eligible 
                educational institution, the student shall be 
                responsible for any amounts owed for that academic 
                period and will not receive matching funds for that 
                academic period.
                    (C) Delay of attendance; extenuating 
                circumstances.--Subject to paragraph (3), each eligible 
                entity shall describe in the agreement under paragraph 
                (1)(C) the eligible entity's policy regarding the 
                availability of matching funds in the event a student 
                decides to delay attendance at an eligible educational 
                institution or in the case of extenuating 
                circumstances, such as illness of a student.
            (3) Return of deposited funds.--
                    (A) In general.--Each eligible entity shall ensure 
                that a participating eligible student, or a student 
                with preliminary eligibility, who does not meet or 
                maintain the requirements of paragraph (4) or (10) of 
                section 4, respectively, shall be entitled to withdraw 
                funds that the student or the student's family 
                contributed to the postsecondary education match 
                savings account in accordance with the terms and 
                conditions that are contained in the agreement for that 
                postsecondary education match savings account, as 
                described in paragraph (1)(C).
                    (B) Expiration.--
                            (i) In general.--The participation of an 
                        eligible student or student with preliminary 
                        eligibility in the postsecondary education 
                        match savings account demonstration grant 
                        program shall terminate on the expiration date 
                        described in clause (ii). The eligible entity 
                        shall cease reserving matching funds on behalf 
                        of that student as described in paragraph 
                        (1)(D). Any remaining funds that the student or 
                        the student's family deposited in a 
                        postsecondary education match savings account 
                        shall be made available for withdrawal in 
                        accordance with subparagraph (A).
                            (ii) Expiration date.--The expiration date 
                        described in this clause is--
                                    (I) the date that is 8 years after 
                                the date on which a participating 
                                eligible student first enrolled in an 
                                eligible educational institution; or
                                    (II) in the case of a student with 
                                preliminary eligibility, or a 
                                participating eligible student who does 
                                not enroll in an eligible educational 
                                institution, the date that is 4 years 
                                after the date on which the student 
                                first agrees to participate in the 
                                postsecondary education match savings 
                                account demonstration grant program.
            (4) Management costs.--An eligible entity receiving a grant 
        under this section may use not more than 5 percent of grant 
        funds for management costs, which may include nonadministrative 
        and administrative functions, including program management, 
        reporting requirements, recruitment and enrollment of 
        individuals, and monitoring.
    (f) Data Sharing.--An eligible entity receiving a grant under this 
section shall enter into a data sharing agreement with eligible 
educational institutions in order to exchange data necessary to carry 
out the activities described in this section. Such data sharing shall 
be carried out in a manner that complies with the requirements of 
section 444 of the General Education Provisions Act (commonly known as 
the ``Family Educational Rights and Privacy Act of 1974'') (20 U.S.C. 
1232g).
    (g) Annual Progress Reports.--Each eligible entity receiving a 
grant under this section shall prepare and submit to the Secretary an 
annual progress report containing the following information, in the 
aggregate and in a manner that protects personally identifiable 
information in accordance with Federal privacy laws:
            (1) The number and characteristics of participating 
        students making a deposit into a postsecondary education match 
        savings account supported under this section.
            (2) Data on program goals and achievements including 
        enrollment rates, first-year retention rates, program 
        completion, average Federal student loan debt, and share of 
        participating eligible students borrowing Federal student 
        loans.
            (3) The amount that the eligible entity has reserved in 
        accordance with subsection (e)(1)(D).
            (4) The aggregate amounts deposited in postsecondary 
        education match savings accounts by participating students and 
        their families.
            (5) What service configurations of the eligible entity 
        (such as configurations relating to peer support, structured 
        planning exercises, mentoring, and case management) increased 
        the rate and consistency of participation in the demonstration 
        project and how such configurations varied among different 
        populations or communities.
            (6) Such other information as the Secretary may require to 
        evaluate the demonstration project.
    (h) Report to Congress.--Not later than 1 year after the 
establishment of the demonstration project under this section, the 
Secretary shall prepare and submit to Congress a report containing the 
following information:
            (1) The effects of incentives and organizational or 
        institutional support on postsecondary retention in the 
        demonstration project.
            (2) The savings rates of individuals in the demonstration 
        project, in the aggregate and disaggregated by demographic 
        characteristics including gender, age, family size, race or 
        ethnic background, and income.
            (3) The effects of postsecondary education match savings 
        accounts on savings rates and postsecondary education retention 
        and completion, and how such effects vary among different 
        populations or communities.
            (4) The lessons to be learned from the demonstration 
        projects conducted under this section and whether a permanent 
        postsecondary education savings grant program should be 
        established.
            (5) The characteristics of postsecondary education match 
        savings accounts (such as threshold amounts and match rates) 
        required to stimulate participation in the demonstration 
        project, and how such characteristics vary among different 
        populations or communities.
            (6) Such other factors as may be prescribed by the 
        Secretary.
    (i) Technical Assistance.--The Secretary may reserve not more than 
10 percent of the amounts appropriated under section 6 to provide 
technical assistance to eligible entities receiving grants under this 
section.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act 
$100,000,000 for fiscal year 2024 and each of the succeeding 4 years.
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