Empowering Students Through Enhanced Financial Counseling Act

Floor Speech

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Ms. BONAMICI. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chair, I rise today in support of the Empowering Students Through Enhanced Financial Counseling Act, a bill I introduced with Congressman Guthrie.

Mr. Chair, I want to thank Chairwoman Foxx, Ranking Member Scott, and Congressman Guthrie for their leadership on this bill. I would also like to thank the Education and the Workforce Committee staff on both sides of the aisle for their hard work to include the shared priorities of Members in this bill.

This bill shows that there are areas of bipartisan consensus in Congress.

Today, a college education continues to be a powerful force for economic and social mobility in our country. I know. Neither of my parents graduated from college. I worked my way first through community college, which opened the door to the university and then to law school.

I am pleased that Democrats and Republicans are working together to take a meaningful step toward addressing the student loan debt crisis, which is now shockingly close to consumer debt in this country.

This bill recognizes and addresses the clear need for enhanced financial counseling. More than 40 million Americans are struggling with student loan debt, and default rates are climbing.

At the same time, there is evidence that student loan debt is a drag on the broader economy. For many borrowers, student loan debt affects the ability to buy a home, to purchase a new car, or to afford childcare. Student loan borrowers may be unable to access capital to start a small business or they may put off saving for retirement.

That is why we need to help current and future students understand their rights and obligations as borrowers, and we need to help them forecast their obligations in the years after college so they can make informed decisions now for the years ahead.

One of the frustrations I have heard from former students in Oregon is that they didn't understand all of the jumble of terms in their loan agreement or all of the differences between Federal and private student loans. With this bill, students, whether they are sophomores or seniors, will have information about how much they have borrowed, what they are expected to borrow, how their loans will accrue interest, and what they can expect their monthly payment to be when they leave college. They will be better able to see their road to repayment.

Importantly, this bill provides annual counseling, so borrowers who don't graduate will still receive information about what to expect when they leave school and have to start repayment.

Borrowers will have more clarity about their monthly payments under two repayment plans: income-based repayment and the standard 10-year option. That is critical for students to see what those differences will be, and they will with this bill. Clarifying and streamlining this information will simplify the repayment process for borrowers and reduce default.

Borrowers will be reminded each year they don't have to borrow the full amount made available to them. They should consider grants, work study, and Federal loans before turning to private lenders.

Unlike current practice, borrowers will receive financial counseling before signing their master promissory notes, and they will be reminded that they can repay interest before it capitalizes.

For the first time, parent borrowers of student loans will be given virtually the same information about their loans that the students receive.

Additionally, this bill will extend counseling to Pell grant recipients so they understand the limits on eligibility for the grants and the circumstances under which they would be asked to repay their grants, helping students to avoid expensive surprises.

Finally, this bill does not interrupt the disbursement of financial aid, and it delivers enhanced student loan information in consumer- tested formats that check for students' understanding. It will make sure we provide personalized borrower information in a way that borrowers understand.

Mr. Chair, again, I want to thank my colleagues on both sides of the aisle for their support, and I encourage all my colleagues to support the Empowering Students Through Enhanced Financial Counseling Act.

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Ms. BONAMICI. Mr. Chair, I yield myself as much time as I may consume.

Mr. Chairman, I thank the chairwoman for her remarks.

This bill we are considering today is an important step to protect students and borrowers, but it is not a substitute for an update to the Higher Education Act.

We still have more work to do to invest in our Nation's students, our future leaders. We especially need to do more to keep higher education within reach for low-income students and working families.

We need to strengthen the Pell Grant Program, which has served as a foundation of support and opportunity for many Americans and helped them afford college.

We need to do more to address State disinvestment and partner with States. State disinvestment in higher education has also led to a rise in college costs, and we need to do more to make sure student loan borrowers have access to affordable repayment plans.

The Democratic proposal to update the Higher Education Act, the Aim Higher Act, will do all of this and more.

I am glad we are considering this bipartisan proposal today instead of the PROSPER Act, which would actually make college less affordable and accessible by cutting student aid by billions of dollars.

The Aim Higher Act, on the other hand, invests in students and makes higher education more affordable through robust funding in financial aid programs. It also addresses the rising cost of college through the creation of a Federal-State partnership to reduce the student debt burden on families. It is a thoughtful package that deserves to be considered on the House floor.

The legislation we are considering today, though not a comprehensive reauthorization, will protect students and families and make a real, positive difference for grant recipients and student loan borrowers.

Mr. Chair, I do urge all of my colleagues to support this bill, and I reserve the balance of my time.

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Ms. BONAMICI. Mr. Chair, I continue to reserve the balance of my time.

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Ms. BONAMICI. Mr. Chair, I continue to reserve the balance of my time.

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Ms. BONAMICI. Mr. Chair, I continue to reserve the balance of my time.

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Ms. BONAMICI. Mr. Chairman, I continue to reserve the balance of my time.

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Ms. BONAMICI. Mr. Chairman, may I inquire as to how much time is remaining.

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Ms. BONAMICI. Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, I want to again thank Mr. Guthrie for cosponsoring this legislation with me, and thank the leadership, both Chairwoman Foxx and Ranking Member Scott, for their support, and all of the staff. I want to thank my colleagues on both sides of the aisle for their support for this legislation.

Mr. Roe from Tennessee mentioned his story, and it is not unlike mine, from a middle-class family, went through 7 years of higher education on my own, working my way through. I ended up with a very modest amount of student debt.

As I say, that is not what I am hearing from families today in Oregon, and I know my colleagues are not hearing that from their constituents across the country.

I also want to point out how the student loan debt crisis is affecting the workforce issues that we all talk about and care about.

An example is that there are many people who wanted to go into primary care. They are going through medical school. They wanted to go into primary care. I just had a conversation with one last week. Too many medical students are choosing higher paying specialties, not because that is where their passion or interest is, but because their student loan debt is so high.

I just had a great conversation on Labor Day with some firefighters in the district I am honored to represent. I thanked them for working, keeping our communities safe. They are concerned about student debt, and they are very concerned about the Public Service Loan Forgiveness Program, which, of course, is threatened under the PROSPER Act.

We need to come back to the table and talk about how we can preserve the Public Service Loan Forgiveness Program.

Today, however, I urge all of my colleagues to take this important step forward on this bipartisan legislation, the Empowering Students Through Enhanced Financial Counseling Act. I encourage broad support for the bill, and I yield back the balance of my time.

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Ms. BONAMICI. Mr. Chairman, I claim the time in opposition, although I am not opposed to the amendment.

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Ms. BONAMICI. Mr. Chairman, I thank my friend, the gentlewoman from New York, for her amendment. It improves the bill, and I support its acceptance.

Financing a college education can be a daunting process, especially for first-generation students. It can seem like there are things that everyone else knows but no one is telling them. If we are going to improve student counseling, we need to recognize this fact.

This amendment requires that as part of the annual counseling students receive, they be made aware, if their financial circumstances change, they can and should contact their financial aid office on campus. There they can seek someone with the professional background, judgment, and assistance to help them make changes to awards, or they may find out about other aid for which the student may be eligible.

Additionally, students may not know that while they are eligible for a certain amount of Federal aid, they are not required to take the full amount. Many debt-conscious students may prefer to fund a smaller portion of their education through loans but may not know that this is an option. This amendment clarifies that in cases where the student specifies they would like to receive less aid, that is an amount that is discussed in their counseling.

Again, I support the gentlewoman's amendment, and I urge a ``yes'' vote.

Mr. Chairman, I yield back the balance of my time.

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Ms. BONAMICI. Mr. Chairman, I claim the time in opposition, although I am not opposed to the amendment.

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Ms. BONAMICI. Mr. Chair, I would like to thank the gentleman from Minnesota for his amendment. It improves the bill, and I support its acceptance.

Students may be eligible for many different forms of financial aid, and in our effort to improve financial counseling, we should make sure that appropriate disclosures and information are being shared with the borrowers based on the type of aid they are receiving.

This amendment addresses Parent PLUS loans, loans that parents or guardians can take out to pay for the education of a dependent student. Parent PLUS loans have a higher interest rate than direct loans, and because they can cover unmet need up to the cost of attendance, the loan balance can grow rather quickly. As such, parents should be counseled that there may be other forms of aid that their student can take advantage of to help reduce the size of the Parent PLUS loan that is needed. A robust counseling program will also inform parents, as the gentleman stated, that there is no penalty to prepaying either the interest or the principal on these loans.

Again, Mr. Chair, I support the gentleman's amendment because it improves the underlying legislation, I urge a ``yes'' vote, and I yield back the balance of my time.

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Ms. BONAMICI. Mr. Chair, I claim the time in opposition, although I am not opposed to the amendment.

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Ms. BONAMICI. Mr. Chair, I would like to thank the gentleman from Georgia for his amendment. It improves the underlying bill, and I support its acceptance.

I rise in support of the amendment to clarify that institutions have the ability to provide additional financial counseling beyond the requirements established in the underlying bill while making sure that the additional counseling will in no way preclude students from receiving their aid on time.

Although the underlying bill does not prohibit institutions from providing this counseling, this amendment makes explicit the institution's ability to provide that additional support.

Institutions know their students and the individual capacity of those students, and it is important to provide this flexibility so schools can provide more counseling as needed.

Again, I support the gentleman's amendment, I urge a ``yes'' vote, and I yield back the balance of my time.

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Ms. BONAMICI. Mr. Chair, I claim the time in opposition, although I am not opposed to the amendment.

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Ms. BONAMICI. Mr. Chairman, I am supportive of this amendment because it simply allows institutions to encourage in-person counseling, but I would be remiss if I did not state that this provision is not necessary. The underlying bill already permits institutions to provide either in-person counseling or use the consumer-tested online tool that would be created by the Department of Education.

H.R. 1635, the underlying bill, was written intentionally in this way to provide flexibility to institutions. Some institutions will be able to provide high quality in-person counseling, but underresourced institutions may find it difficult to do so.

This is why the bill contains provisions to have the Department of Education create a standardized tool to ensure at least a base level of quality within and across institutions. Because the success of in- person counseling is informed not only by the content but also by the individual providing the counseling, this online tool will make sure that students receive the same caliber of counseling regardless of where the counseling is provided or who provides the counseling.

To confirm effectiveness, the tool will be tested by students, financial aid advisers, advocacy organizations, and other stakeholders.

Again, in-person counseling would be fine and best for some students when the institution can provide it, but having that flexibility is important as well.

Mr. Chair, I do urge support of this amendment, and I yield back the balance of my time.

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Ms. BONAMICI. Madam Chair, I thank the gentlewoman for yielding. As someone with a consumer protection background, I thank her for her amendment.

It has already been stated during the debate that there is close to $1.5 trillion in outstanding student loan debt. It should be no surprise that there are companies and individuals poised to make money on the backs of student borrowers through fraudulent means.

In recent years, there has been an explosion of third-party debt relief scams targeting student loan borrowers. These businesses claim that, for a fee, they can cut through the red tape for borrowers and get their student loan house in order. They misrepresent services, make promises they can't keep, and charge for activities that cost nothing.

State and Federal consumer protection groups have already started cracking down on these groups. State attorneys general, the Federal Trade Commission, and the Consumer Financial Protection Bureau have either sounded the alarm or conducted enforcement actions targeting these fraudulent companies.

We should use this opportunity in this bill when conducting loan counseling to remind students that their loan servicer is paid through the Department of Education to provide assistance with these services free of charge. They should be wary of any third-party company attempting to facilitate repayment of their Federal student loans.

It is a commonsense addition to the bill, and I thank the gentlewoman for offering the amendment.

Again, I support this amendment, and I urge a ``yes'' vote.

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