[Congressional Record Volume 157, Number 90 (Wednesday, June 22, 2011)]
[Senate]
[Pages S4032-S4033]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 1260. A bill to require financial literacy and economic education 
counseling for student borrowers, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. AKAKA. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1260

       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 ``College Literacy in Finance 
     and Economics Act of 2011'' or the ``College LIFE Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Student borrowing is widespread in higher education, 
     and more than $100,000,000,000 in Federal education loans are 
     originated each year. In 2008, 62 percent of recipients of a 
     baccalaureate degree graduated with student debt.
       (2) Forty-eight percent of students at 4-year public 
     institutions of higher education borrow money to pay for 
     college, as do 57 percent of students at 4-year private 
     institutions of higher education, and 96 percent of students 
     at for-profit institutions of higher education.
       (3) In 2008, 92 percent of Black students, 85 percent of 
     Hispanic students, 85 percent of American Indian/Alaska 
     Native students, 82 percent of multi-racial students, 80 
     percent of Native Hawaiian/Pacific Islander students, 77 
     percent of White students, and 68 percent of Asian students 
     received financial aid.
       (4) Students depart from institutions of higher education 
     with significant debt. In 2008, the average student loan debt 
     among graduates of institutions of higher education was 
     $23,186, and 1 in 10 recipients of a baccalaureate degree 
     graduated at least $40,000 in debt. In 2008, 57 percent of 
     recipients of a baccalaureate degree from a for-profit 
     institution of higher education owed more than $30,000, and 
     the median amount of debt was $32,700. Since 2003, the 
     average cumulative debt among students at institutions of 
     higher education has increased by 5.6 percent each year.
       (5) Students enrolled in for-profit institutions of higher 
     education account for 47 percent of all student loan 
     defaults, despite representing approximately 10 percent of 
     all

[[Page S4033]]

     students enrolled in institutions of higher education. Since 
     2003, the national cohort default rate has increased from 4.5 
     percent to 7 percent.
       (6) Students rely on access to credit. Fifty-six percent of 
     dependent students at institutions of higher education had a 
     credit card in their own name in 2004. The average credit 
     card balance among such students who were carrying a balance 
     on their cards was $2,000.
       (7) According to the National Foundation for Credit 
     Counseling, the majority of adults (56 percent of adults in 
     the United States, or 127,000,000 people) do not have a 
     budget or keep close track of expenses or spending.
       (8) According to a 2009 National Bankruptcy Research Center 
     study, consumers who received financial education through 
     pre-bankruptcy counseling had 27.5 percent fewer delinquent 
     accounts and remained current on their accounts for 29 
     percent longer.
       (9) According to the Financial Industry Regulatory 
     Authority Investor Education Foundation, less than one-third 
     of young adults (ages 18 to 29) set aside emergency savings 
     to weather unexpected financial challenges.
       (10) According to a Jump$tart Coalition for Personal 
     Financial Literacy survey, 62 percent of high school students 
     cannot pass a basic personal finance exam, and financial 
     literacy scores among future higher education students are 
     low.
       (11) According to research by the National Endowment for 
     Financial Education and the University of Arizona, schools 
     are the institutions that students trust most to help 
     increase their knowledge of personal finance.

     SEC. 3. FINANCIAL LITERACY COUNSELING.

       Section 485 of the Higher Education Act of 1965 (20 U.S.C. 
     1092) is amended by adding at the end the following:
       ``(n) Financial Literacy Counseling.--
       ``(1) In general.--Each eligible institution shall provide 
     financial literacy counseling to student borrowers in 
     accordance with the requirements of this subsection, 
     through--
       ``(A) financial aid offices;
       ``(B) an employee or group of employees designated under 
     subsection (c); or
       ``(C) a partnership with a nonprofit organization that has 
     substantial experience developing or administering financial 
     literacy and economic education curricula, which may include 
     an organization that has received grant funding under the 
     Excellence in Economic Education Act of 2001 (20 U.S.C. 7267 
     et seq.).
       ``(2) Entrance and exit counseling required.--
       ``(A) In general.--Financial literacy counseling, as 
     required under this subsection, shall be provided to student 
     borrowers on the following 2 occasions:
       ``(i) Entrance counseling.--Such counseling shall be 
     provided not later than 45 days after the first disbursement 
     of a borrower's first loan that is made, insured, or 
     guaranteed under part B, made under part D, or made under 
     part E. Financial literacy counseling on this occasion may be 
     provided in conjunction with the entrance counseling 
     described in subsection (l), if the financial literacy 
     counseling component is provided in accordance with the 
     requirements of subparagraph (C).
       ``(ii) Exit counseling.--Such financial literacy counseling 
     shall be provided, in addition to the financial literacy 
     counseling provided under clause (i), prior to the completion 
     of the course of study for which the borrower enrolled at the 
     institution or at the time of departure from such 
     institution, to each borrower of a loan that is made, 
     insured, or guaranteed under part B, made under part D, or 
     made under part E. Financial literacy counseling on this 
     occasion may be provided in conjunction with the exit 
     counseling described in subsection (b), if the financial 
     literacy counseling component is provided in accordance with 
     the requirements of subparagraph (C).
       ``(B) Exceptions.--The requirements of subparagraph (A) 
     shall not apply to borrowers of--
       ``(i) a loan made, insured, or guaranteed pursuant to 
     section 428C;
       ``(ii) a loan made, insured, or guaranteed on behalf of a 
     student pursuant to section 428B; or
       ``(iii) a loan made under part D that is a Federal Direct 
     Consolidation Loan or a Federal Direct PLUS loan made on 
     behalf of a student.
       ``(C) Minimum counseling requirements.--Such financial 
     literacy counseling shall include a total of not less than 4 
     hours of counseling on the occasion described in subparagraph 
     (A)(i), and an additional period of not less than 4 hours of 
     counseling on the occasion described in subparagraph (A)(ii). 
     A total of not more than 2 hours of counseling for each of 
     the occasions described in subparagraph (A) shall be provided 
     electronically.
       ``(D) Early departure.--Notwithstanding subparagraph (C), 
     if a borrower leaves an eligible institution without the 
     prior knowledge of such institution, the institution shall 
     attempt to provide the information required under this 
     subsection to the student in writing.
       ``(3) Information to be provided.--Financial literacy 
     counseling, as required under this subsection, shall include 
     information on the Financial Education Core Competencies as 
     determined by the Financial Literacy and Education Commission 
     established under title V of the Fair and Accurate Credit 
     Transactions Act of 2003 (20 U.S.C. 9701 et seq.).
       ``(4) Use of interactive programs.--The Secretary may 
     encourage institutions to carry out the requirements of this 
     subsection through the use of interactive programs that test 
     the borrower's understanding of the financial literacy 
     information provided through counseling under this 
     subsection, using simple and understandable language and 
     clear formatting.
       ``(5) Model financial literacy counseling curriculum.--Not 
     later than 1 year after the date of enactment of the College 
     Literacy in Finance and Economics Act of 2011, the Secretary 
     shall develop a curriculum in accordance with the 
     requirements of paragraph (3), which eligible institutions 
     may use to fulfill the requirements of this subsection. In 
     developing such curriculum, the Secretary may consult with 
     members of the Financial Literacy and Education Commission.'

                          ____________________