S.Amdt. 1666

SA 1666. Mr. LEE submitted an amendment intended to be proposed to
amendment SA 1502 proposed by Mr. Schumer to the bill S. 1260, to
establish a new Directorate for Technology and Innovation in the
National Science Foundation, to establish a regional technology hub
program, to require a strategy and report on economic security,
science, research, innovation, manufacturing, and job creation, to
establish a critical supply chain resiliency program, and for other
purposes;

[[Page S3158]]

which was ordered to lie on the table; as follows:

At the end of title I of division F, insert the following:

Subtitle D--School Accountability for Student Loans

SEC. 6132. SCHOOL ACCOUNTABILITY FOR STUDENT LOANS.

(a) Default Rate Fine.--Section 487 of the Higher Education
Act of 1965 (20 U.S.C. 1094) is amended--
(1) in subsection (a), by adding at the end the following:
``(30) The institution will pay a default rate fine that is
determined pursuant to subsection (k).''; and
(2) by adding at the end the following:
``(k) Default Rate Fine.--
``(1) In general.--Each institution described in paragraph
(2) shall pay to the Secretary an annual default rate fine in
accordance with this subsection.
``(2) Applicable institutions.--An institution shall pay a
default rate fine under this subsection for a fiscal year
based on the cohort default rate (as defined in section
435(m)) on loans made under this title for such fiscal year.
``(3) Fine.--
``(A) In general.--Each institution described in paragraph
(2) shall pay a default rate fine for a fiscal year that is
equal to 10 percent of the applicable amount determined under
subparagraph (B)(i) for such fiscal year.
``(B) Applicable amount.--
``(i) In general.--The applicable amount for a fiscal year
with respect to an institution shall be an amount equal to
the product of the amount of loans made under this title for
such fiscal year, and the applicable rate determined in
clause (ii). If the applicable rate is equal to or less than
zero percent then the applicable amount shall be equal to
zero.
``(ii) Applicable rate.--The applicable rate for a fiscal
year with respect to an institution shall be the rate that is
equal to the difference between the cohort default rate on
loans made under this title (as defined in section 435(m))
for such fiscal year and the average rate of total
unemployment in the United States for the 3-year period
covered by that cohort default rate (as defined in section
435(m)), as determined by the Secretary of Labor.
``(4) Credit for certain institutions.--Each institution
that is described in paragraph (2) shall receive a $400
credit for the fiscal year for each graduate of the
institution during such fiscal year who received a Federal
Pell Grant while enrolled at the institution.
``(5) Flexibility in counsel and advice.--Notwithstanding
any other provision of the Act, the Secretary shall grant
institutions of higher education flexibility under this Act
to counsel and advise students on Federal financial aid,
including granting flexibility for institutions to award less
than the maximum amount of Federal student aid for which an
individual is eligible if the cost of tuition, room, and
board at the institution is less than such maximum amount.''.
(b) Flexibility in Counseling and Advice.--Section 485(l)
of the Higher Education Act of 1965 (20 U.S.C. 1092(l)) is
amended by adding at the end the following:
``(3) Flexibility in counseling and advice.--In addition to
the entrance counseling under paragraph (1), an eligible
institution may require any borrower, at or prior to the time
of a disbursement to the borrower of a loan made under part
D, to receive the information described in paragraph (2) with
respect to such loan, or any other financial counseling,
including financial literacy counseling.''.
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