College Literacy in Finance and Economics Act of 2011 or College LIFE Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require institutions of higher education (IHEs) to provide student borrowers under the Federal Family Education Loan, Direct Loan, and Perkins Loan programs with financial literacy counseling within 45 days of their first receipt of such a loan and prior to the completion of their studies or when they leave school.
Requires student borrowers to receive at least four hours of counseling on each occasion.
Makes such counseling requirements inapplicable to borrowers of consolidation loans.
Requires financial literacy counseling to include information on the Financial Education Core Competencies as determined by the Financial Literacy and Education Commission.
Directs the Secretary of Education to develop a curriculum that IHEs may use to fulfill this Act's requirements.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1260 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1260
To require financial literacy and economic education counseling for
student borrowers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 22, 2011
Mr. Akaka introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To require financial literacy and economic education counseling for
student borrowers, 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 ``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 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.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Health, Education, Labor, and Pensions. (text of measure as introduced: CR S4032-4033)
Sponsor introductory remarks on measure. (CR S4040)
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line