[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1968 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1968
To amend the Higher Education Act of 1965 to enhance literacy in
finance and economics, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 25, 2003
Mr. Enzi (for himself, Mr. Akaka, Mr. Corzine, and Mr. Sarbanes)
introduced the following bill; which was read twice and referred to the
Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to enhance literacy in
finance and economics, and for other purposes.
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 ``Financial Literacy in Higher
Education Act''.
SEC. 2. AREAS OF EMPHASIS.
Part B of title I of the Higher Education Act of 1965 (20 U.S.C.
1011 et seq.) is amended by adding at the end the following:
``SEC. 123. AREAS OF EMPHASIS.
``In carrying out activities under this Act related to improving
financial and economic literacy, education, and counseling, the
Secretary shall emphasize, among other elements, basic personal income
and household money management and financial planning skills, and basic
economic decision making skills, including how to--
``(1) create household budgets, initiate savings plans, and
make strategic investment decisions for education, employment,
retirement, home ownership, wealth building, or other savings
goals;
``(2) manage credit and debt effectively, including student
financial aid and credit card debt, and understand the merits
of establishing and maintaining excellent credit history;
``(3) understand, evaluate, and compare fair and favorable
financial products, services, and opportunities, and avoid
abusive, predatory, or deceptive financial products, services,
and opportunities;
``(4) complete tax returns and understand tax consequences
when making certain financial decisions, such as placing an
investment or purchasing a home;
``(5) identify economic problems, alternatives, benefits,
and costs;
``(6) analyze the incentives at work in an economic
situation;
``(7) examine the consequences of changes in economic
conditions and public policies;
``(8) collect and organize economic evidence, including
understanding, evaluating, and making strategic decisions using
economic indicators;
``(9) compare benefits with costs; and
``(10) improve financial and economic literacy and
education through all other related skills.''.
SEC. 3. COORDINATION.
In carrying out the financial and economic literacy activities
authorized under this Act and the amendments made by this Act, the
Secretary of Education, to the greatest extent practicable, shall
coordinate such activities with the financial and economic literacy
efforts of a Federal commission comprised of the following:
(1) The Secretary of the Treasury.
(2) The respective head of each of the following:
(A) Each of the Federal banking agencies (as
defined in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813)).
(B) The National Credit Union Administration.
(C) The Securities and Exchange Commission.
(D) Each of the Departments of Education,
Agriculture, Defense, Health and Human Services,
Housing and Urban Development, Labor, and Veterans
Affairs.
(E) The Federal Trade Commission.
(F) The General Services Administration.
(G) The Small Business Administration.
(H) The Social Security Administration.
(I) The Commodity Futures Trading Commission.
(J) The Office of Personnel Management.
(3) At the discretion of the President, not more than 5
individuals appointed by the President from among the
administrative heads of any other Federal agencies,
departments, or other Government entities, whom the President
determines to be engaged in a serious effort to improve
financial literacy and education.
SEC. 4. ENHANCEMENT OF FINANCIAL LITERACY AND ECONOMIC LITERACY.
The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 201(a)(3), by inserting ``personal
finance,'' after ``economics,'';
(2) in section 311(c)--
(A) by redesignating paragraphs (7) through (12) as
paragraphs (8) through (13), respectively; and
(B) by inserting after paragraph (6) the following:
``(7) Education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents.'';
(3) in section 316(c)(2)--
(A) by redesignating subparagraphs (G) through (L)
as subparagraphs (H) through (M), respectively;
(B) by inserting after subparagraph (F) the
following:
``(G) education or counseling services designed to
improve the financial literacy and economic literacy of
students and their parents;''; and
(C) in subparagraph (M), as redesignated by
subparagraph (A), by striking ``subparagraphs (A)
through (K)'' and inserting ``subparagraphs (A) through
(L)'';
(4) in section 317(c)(2)--
(A) in subparagraph (G), by striking ``and'' after
the semicolon;
(B) in subparagraph (H), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(I) education or counseling services designed to
improve the financial literacy and economic literacy of
students and their parents.'';
(5) in section 323(a)--
(A) by redesignating paragraphs (7) through (12) as
paragraphs (8) through (13), respectively; and
(B) by inserting after paragraph (6) the following:
``(7) Education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents.'';
(6) in section 326(c)--
(A) by redesignating paragraphs (5) through (7) as
paragraphs (6) through (8), respectively; and
(B) by inserting after paragraph (4) the following:
``(5) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;'';
(7) in section 503(b)--
(A) by redesignating paragraphs (5) through (14) as
paragraphs (6) through (15), respectively; and
(B) by inserting after paragraph (4) the following:
``(5) Education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents.'';
(8) in section 402B(b)--
(A) by redesignating paragraphs (3) through (10) as
paragraphs (4) through (11), respectively;
(B) by inserting after paragraph (2) the following:
``(3) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;''; and
(C) in paragraph (11), as redesignated by
subparagraph (A), by striking ``paragraphs (1) through
(9)'' and inserting ``paragraphs (1) through (10)'';
(9) in section 402C--
(A) in subsection (b)--
(i) by redesignating paragraphs (2) through
(12) as paragraphs (3) through (13),
respectively;
(ii) by inserting after paragraph (1) the
following:
``(2) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;''; and
(iii) in paragraph (13), as redesignated by
clause (i), by striking ``paragraphs (1)
through (11)'' and inserting ``paragraphs (1)
through (12)''; and
(B) in subsection (e), by striking ``subsection
(b)(10)'' and inserting ``subsection (b)(11)'';
(10) in section 402D(b)--
(A) by redesignating paragraphs (2) through (10) as
paragraphs (3) through (11), respectively;
(B) by inserting after paragraph (1) the following:
``(2) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;''; and
(C) in paragraph (11), as redesignated by
subparagraph (A), by striking ``paragraphs (1) through
(9)'' and inserting ``paragraphs (1) through (10)'';
(11) in section 402E(b)--
(A) by redesignating paragraphs (7) and (8) as
paragraphs (8) and (9), respectively; and
(B) by inserting after paragraph (6) the following:
``(7) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;'';
(12) in section 402F(b)--
(A) by redesignating paragraphs (4) through (10) as
paragraphs (5) through (11), respectively;
(B) by inserting after paragraph (3) the following:
``(4) education or counseling services designed to improve
the financial literacy and economic literacy of students and
their parents;''; and
(C) in paragraph (11), as redesignated by
subparagraph (A), by striking ``paragraphs (1) through
(9)'' and inserting ``paragraphs (1) through (10)'';
(13) in section 404D(b)(2)(A)(ii), by striking ``and
academic counseling'' and inserting ``academic counseling, and
financial literacy and economic literacy education or
counseling'';
(14) by striking section 418A(c)(1)(B)(i) and inserting the
following:
``(i) personal, academic, career, and economic
education or personal finance counseling as an ongoing
part of the program;'';
(15) in section 428F, by adding at the end the following:
``(c) Financial and Economic Literacy.--Where appropriate, each
program described under subsection (b) shall include making available
financial and economic education materials for the borrower.'';
(16) in section 432(k)(1), by striking ``and offering'' and
all that follows through the period and inserting ``, offering
loan repayment matching provisions as part of employee benefit
packages, and providing employees with financial and economic
education and counseling.'';
(17) in section 441(c)--
(A) in paragraph (1), by inserting ``financial
literacy and economic literacy,'' after ``social
services,''; and
(B) in paragraph (4)(C), by striking the period at
the end and inserting ``and counseling for the purposes
of improving financial literacy and economic
literacy.'';
(18) in section 485--
(A) in subsection (a)(1)(D), by striking the
semicolon at the end and inserting ``, including the
merits of taking a personal finance course, if the
institution offers such a course, and of the student
reviewing the student's personal credit profile not
less frequently than once a year;'';
(B) in subsection (b)--
(i) in paragraph (1)(A)--
(I) in clause (i), by striking
``and'' after the semicolon;
(II) in clause (ii), by striking
the period at the end and inserting ``;
and''; and
(III) by adding at the end the
following:
``(iii) if it is determined during the
counseling that the borrower is not connected
to a mainstream financial institution,
information about low-cost financial services
and the benefits of using such services, and
where and how the borrower could open a low-
cost account in a federally insured credit
union or bank.''; and
(ii) by adding at the end the following:
``(3) Pilot program.--
``(A) Authorization.--
``(i) In general.--The Secretary shall
establish a pilot program that awards a total
of 5 grants to 5 different institutions of
higher education that are located in
geographically different parts of the United
States to enable the institutions to provide
annual personal finance counseling for students
enrolled at such institutions.
``(ii) Minority serving institutions.--In
awarding grants under this paragraph, the
Secretary shall award not less than 2 of the 5
grants to institutions of higher education that
are eligible to receive assistance under title
III or title V.
``(B) Application.--An institution of higher
education that desires to receive a grant under this
paragraph shall submit an application to the Secretary
at such time, in such manner, and containing such
information as the Secretary may require.
``(C) Use of funds.--
``(i) Counseling.--
``(I) In general.--In addition to
making available exit counseling under
paragraph (1), an institution of higher
education that receives a grant under
this paragraph shall through financial
aid officers or otherwise, make
available counseling to borrowers of
loans which are made, insured, or
guaranteed under part B (other than
loans made pursuant to section 428B) of
this title or made under part D or E of
this title at the commencement of the
borrower's course of study at the
institution, not less frequently than
once annually while the borrower is
enrolled at the institution, and not
later than 30 days after completion of
the course of study for which the
borrower enrolled at the institution or
at the time of departure from such
institution.
``(II) Content.--The counseling
required under subclause (I) shall
include the average anticipated monthly
repayments, a review of the repayment
options available, the total amount of
interest that would be paid over a
range of possible interest rates and
the amount of interest in the monthly
payments, information on the
availability and content of a personal
finance course if such course is
offered by the institution and if not
already completed by the individual,
and such debt and management strategies
as the institution determines are
designed to facilitate the repayment of
such indebtedness, which may be
implemented in partnership with State
or local public, private, and
nonprofit entities approved by the local educational agency that serves
schools in the area where the institution is located, or a campus
committee formed for the purpose of evaluating the qualifications of
such entities. If it is determined during the counseling that the
borrower is not connected to a mainstream financial institution, the
counseling shall include information about low-cost financial services
and the benefits of using such services, and where and how the borrower
could open a low-cost account in a federally insured credit union or
bank.
``(ii) Permissive use.--Grant funds
received under this paragraph may be used to
pay for additional financial aid personnel or
for training for existing financial aid
personnel.
``(iii) Study.--
``(I) In general.--An institution
of higher education that receives a
grant under this paragraph shall
conduct a study to evaluate the
impacts, if any, of the financial and
economic literacy and counseling
activities on students' levels of
savings and indebtedness, and
creditworthiness, and such activities'
effectiveness in reducing the incidence
of problems with handling credit,
including bankruptcy filing and student
financial loan default.
``(II) Assistance.--An institution
of higher education may conduct the
study under subclause (I) with the
assistance of appropriate Federal
agencies or other entities approved by
the Secretary.
``(III) Report.--Not later than 6
months after completion of the study
under subclause (I), the institution of
higher education shall report the
results of such study to the Secretary,
the Secretary of the Treasury, the
Committee on Health, Education, Labor,
and Pensions of the Senate, the
Committee on Banking, Housing, and
Urban Affairs of the Senate, the
Committee on Education and the
Workforce of the House of
Representatives, and the Committee on
Financial Services of the House of
Representatives.
``(D) Duration.--Grants awarded under this
paragraph shall be for a period of 3 years.
``(E) Amount.--The Secretary shall award grants of
not more than $1,000,000 annually to each institution
of higher education awarded a grant under this
paragraph. The Secretary may determine the grant award
amount based on the number of students to be counseled
at the institution of higher education.
``(F) Report.--Not later than 90 days after the
date of completion of the pilot program under this
paragraph, the Secretary shall submit a report to
Congress on the effectiveness of the program.
``(G) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
paragraph such sums as may be necessary for each of
fiscal years 2005 through 2009.''; and
(C) in subsection (c), by adding at the end the
following: ``Appropriate Federal agencies shall provide
material developed by such agencies for the purpose of
financial education, to financial assistance
information personnel at institutions of higher
education for the use of such personnel in financial
aid counseling.''; and
(19) in section 491(d)(8), by inserting ``, including those
related to financial literacy activities,'' after ``resources
and services''.
SEC. 5. EVALUATION.
Not later than 6 years after the date of enactment of this Act, the
Comptroller General of the United States shall submit to the Committee
on Health, Education, Labor, and Pensions of the Senate, the Committee
on Banking, Housing, and Urban Affairs of the Senate, the Committee on
Education and the Workforce of the House of Representatives, and the
Committee on Financial Services of the House of Representatives, an
evaluation of the range and effectiveness of financial and economic
education and financial aid counseling activities of institutions of
higher education, lenders, servicers, and guaranty agencies as
emphasized by the Secretary of Education pursuant to section 123 of the
Higher Education Act of 1965.
<all>