H.R. 618 — Introduced in House

I 113th CONGRESS 1st Session H. R. 618 IN THE HOUSE OF REPRESENTATIVES February 12, 2013 Mr. Michaud (for himself, Mr. Price of North Carolina, Ms. Bordallo, and Ms. Pingree of Maine) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To authorize the Secretary of Education to enter into voluntary, flexible agreements with certain guarantee agencies to provide delinquency prevention and default aversion services for borrowers and potential borrowers of Federal Direct Loans under the Higher Education Act of 1965, and for other purposes. 1. Short title This Act may be cited as the Student Loan Default Prevention Act. 2. Voluntary, flexible agreements (a) In general Section 428A of the Higher Education Act of 1965 (20 U.S.C. 1078–1) is amended— (1) by redesignating subsection (d) as subsection (e); and (2) by inserting after subsection (c), the following: (d) Supplemental student loan services (1) In general Not later than 9 months after the date of enactment of the Student Loan Default Prevention Act and notwithstanding any other provision of this part, the Secretary shall, upon the request of an eligible guarantee agency, enter into a voluntary, flexible agreement with the guarantee agency, or revise the voluntary, flexible agreement previously entered into with the guarantee agency under this section, to provide for the services described in paragraph (3) for borrowers (including potential borrowers, if applicable) of loans made under this part or part D. (2) Eligibility For the purposes of this subsection, an eligible guarantee agency is a guarantee agency that has extensive and relevant experience and demonstrated effectiveness in providing the services described in paragraph (3). (3) Services (A) In general The services described in this paragraph for borrowers (including potential borrowers, if applicable) of loans made under this part or part D may include— (i) delinquency prevention and default aversion activities; (ii) collection of defaulted loans; (iii) monitoring of institutions participating in the program under part D; (iv) training of financial aid officials; and (v) informational outreach to schools and students in support of access to higher education and financial literacy. (B) Existing local services In carrying out the services described in subparagraph (A), an eligible guarantee agency shall provide localized services directly or through partnerships with other eligible guarantee agencies to assist borrowers and institutions of higher education. (4) Reasonable fees An agreement entered into or revised under this subsection shall include a provision regarding the fees that the Secretary shall pay to an eligible guarantee agency for carrying out services under the agreement. The determination of such fees shall be cost neutral and take into account savings resulting from the provision of such services as reasonably projected by the Secretary. (5) Public Notice The Secretary shall publish in the Federal Register a notice to all guarantee agencies that sets forth— (A) an invitation for the guarantee agencies to enter into or revise agreements under this subsection; and (B) the criteria that the Secretary will use for selecting the guarantee agencies with which the Secretary will enter into, or revise, agreements under this subsection. (6) Agreement notice The Secretary shall notify the members of the authorizing committees not later than 30 days prior to concluding an agreement under this subsection. (7) Public availability The text of any voluntary flexible agreements entered into or revised under this subsection shall be readily available to the public. . (b) Conforming amendment Section 456 of the Higher Education Act of 1965 (20 U.S.C. 1087f) is amended by inserting or section 428A(d) after sections 428(b)) and (c).