,,ii  #aafth ,,congress  #ast ,session  
,s4 #bahd  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,july #ah1     
#bjai,mr4 ,durbin 7for himself1 ,mr4    
,reed1 ,mr4 ,brown1 ,mr4 ,cardin1 ,ms4  
,baldwin1 and ,ms4 ,smith7 introduced   
the following bill2 which was read twice
 and referred to the ,committee on      
,banking1 ,housing1 and ,urban ,affairs 
,a ,,bill  ,to amend the ,truth in      
,lending ,act and the ,higher ,education
 ,act of #aife to require certain       
creditors to obtain certifications from 
institutions of higher education1 and   
for other purposes4  #a4 ,short title   
,this ,act may be cited as the ,know    
,before ,you ,owe ,private ,education   
,loan ,act of #bjai4  #b4 ,amendments to
 the ,truth in ,lending ,act  7a7 ,in   
general ,section #abh7;e7 of the ,truth 
in ,lending ,act 7#ae ,u4,s4,c4         
#afch7;e77 is amended--  7#a7 by        
striking paragraph 7#c7 and inserting   
the following3  7#c7 ,institutional     
certification required  7,a7 ,in        

,general ,except as provided in         
subparagraph 7,b71 before a creditor may
 issue any funds with respect to an     
extension of credit described in this   
subsection1 the creditor shall obtain   
from the relevant institution of higher 
education where such loan is to be used 
for a student1 such institution's       
certification of--  7i7 the enrollment  
status of the student2  7ii7 the        
student's cost of attendance at the     
institution as determined by the        
institution under part ,f of title ,,iv 
of the ,higher ,education ,act of #aife2
 and  7iii7 the difference between--    
7,i7 such cost of attendance2 and       
7,,ii7 the student's estimated financial
 assistance1 including such assistance  
received under title ,,iv of the ,higher
 ,education ,act of #aife 7#bj ,u4,s4,c4
 #ajgj et seq47 and other financial     
assistance known to the institution1 as 
applicable4  7,b7 ,exception            
,notwithstanding subparagraph 7,a71 a   
creditor may issue funds with respect to

 an extension of credit described in    
this subsection without obtaining from  
the relevant institution of higher      
education such institution's            
certification if such institution fails 
to provide within #ae business days of  
the creditor's request for such         
certification--  7i7 notification of the
 institution's refusal to certify the   
request2 or  7ii7 notification that the 
institution has received the request for
 certification and will need additional 
time to comply with the certification   
request4  7,c7 ,loans ,disbursed        
,without ,certification ,if a creditor  
issues funds without obtaining a        
certification1 as described in          
subparagraph 7,b71 such creditor shall  
report the issuance of such funds in a  
manner determined by the ,director of   
the ,consumer ,financial ,protection    
,bureau4  2  7#b7 by redesignating      
paragraphs 7#i71 7#aj71 and 7#aa7 as    
paragraphs 7#aj71 7#aa71 and 7#ab71     
respectively2 and  7#c7 by inserting    

after paragraph 7#h7 the following3     
7#i7 ,provision of information  7,a7    
,provision of ,information to ,students 
7i7 ,loan ,statement ,a creditor that   
issues any funds with respect to an     
extension of credit described in this   
subsection shall send loan statements1  
where such loan is to be used for a     
student1 to borrowers of such funds not 
less than once every #c months during   
the time that such student is enrolled  
at an institution of higher education4  
7ii7 ,contents of ,loan ,statement ,each
 statement described in clause 7i7      
shall--  7,i7 report the borrower's     
total remaining debt to the creditor1   
including accrued but unpaid interest   
and capitalized interest2  7,,ii7 report
 any debt increases since the last      
statement2 and  7,,iii7 list the current
 interest rate for each loan4  7,b7     
,notification of loans disbursed without
 certification ,on or before the date a 
creditor issues any funds with respect  
to an extension of credit described in  

this subsection1 the creditor shall     
notify the relevant institution of      
higher education1 in writing1 of the    
amount of the extension of credit and   
the student on whose behalf credit is   
extended4 ,the form of such written     
notification shall be subject to the    
regulations of the ,bureau4  7,c7       
,annual ,report ,a creditor that issues 
funds with respect to an extension of   
credit described in this subsection     
shall prepare and submit an annual      
report to the ,bureau containing the    
required information about private      
student loans to be determined by the   
,director of the ,bureau1 in            
consultation with the ,secretary of     
,education4  4  7b7 ,definition of      
,private ,education ,loan ,section      
#adj7;a77#h77;,a7 of the ,truth in      
,lending ,act 7#ae ,u4,s4,c4            
#afej7;a77#h77;,a77 is amended--  7#a7  
by redesignating clause 7ii7 as clause  
7iii72  7#b7 in clause 7i71 by striking 
and after the semicolon2 and  7#c7 by   

adding after clause 7i7 the following3  
7ii7 is not made1 insured1 or guaranteed
 under title ,,vii or title ,,viii of   
the ,public ,health ,service ,act 7#db  
,u4,s4,c4 #bib et seq4 and #bif et      
seq472 and  4  7c7 ,regulations ,not    
later than #cfe days after the date of  
enactment of this ,act1 the ,director of
 the ,consumer ,financial ,protection   
,bureau shall issue regulations in final
 form to implement paragraphs 7#c7 and  
7#i7 of section #abh7;e7 of the ,truth  
in ,lending ,act 7#ae ,u4,s4,c4         
#afch7;e771 as amended by subsection    
7a74 ,such regulations shall become     
effective not later than #f months after
 their date of issuance4  #c4 ,amendment
 to the ,higher ,education ,act of #aife
  7a7 ,amendment to the ,higher         
,education ,act of #aife ,section       
#dhg7;a7 of the ,higher ,education ,act 
of #aife 7#bj ,u4,s4,c4 #ajid7;a77 is   
amended by striking paragraph 7#bh7 and 
inserting the following3  7#bh7 7,a7    
,upon the request of a private          

educational lender1 acting in connection
 with an application initiated by a     
borrower for a private education loan in
 accordance with section #abh7;e77#c7 of
 the ,truth in ,lending ,act1 the       
institution shall within #ae days of    
receipt of the request--  7i7 provide   
certification to such private           
educational lender-- 7,i7 that the      
student who initiated the application   
for the private education loan1 or on   
whose behalf the application was        
initiated1 is enrolled or is scheduled  
to enroll at the institution2  7,,ii7 of
 such student's cost of attendance at   
the institution as determined under part
 ,f of this title2 and  7,,iii7 of the  
difference between--  7aa7 the cost of  
attendance at the institution2 and  7bb7
 the student's estimated financial      
assistance received under this title and
 other assistance known to the          
institution1 as applicable2  7ii7 notify
 the creditor that the institution has  
received the request for certification  

and will need additional time to comply 
with the certification request2 or      
7iii7 provide notice to the private     
educational lender of the institution's 
refusal to certify the private education
 loan pursuant to subparagraph 7,d74    
7,b7 ,with respect to a certification   
request described in subparagraph 7,a71 
and prior to providing such             
certification under subparagraph 7,a77i7
 or providing notice of the refusal to  
provide certification under subparagraph
 7,a77iii71 the institution shall--  7i7
 determine whether the student who      
initiated the application for the       
private education loan1 or on whose     
behalf the application was initiated1   
has applied for and exhausted the       
,federal financial assistance available 
to such student under this title and    
inform the student accordingly2 and     
7ii7 provide the borrower whose loan    
application has prompted the            
certification request by a private      
educational lender1 as described in     

subparagraph 7,a77i71 with the following
 information and disclosures3  7,i7 ,the
 amount of additional ,federal student  
assistance for which the borrower is    
eligible and the advantages of ,federal 
loans under this title1 including       
disclosure of the fixed interest rates1 
deferments1 flexible repayment options1 
loan forgiveness programs1 and          
additional protections1 and the higher  
student loan limits for dependent       
students whose parents are not eligible 
for a ,federal ,direct ,,plus ,loan4    
7,,ii7 ,the borrower's ability to select
 a private educational lender of the    
borrower's choice4  7,,iii7 ,the impact 
of a proposed private education loan on 
the borrower's potential eligibility for
 other financial assistance1 including  
,federal financial assistance under this
 title4  7,,iv7 ,the borrower's right to
 accept or reject a private education   
loan within the #cj-;day period         
following a private educational lender's
 approval of a borrower's application   

and about a borrower's #c-;day right to 
cancel period4  7,c7 ,for purposes of   
this paragraph1 the terms private       
educational lender and private education
 loan have the meanings given such terms
 in section #adj of the ,truth in       
,lending ,act 7#ae ,u4,s4,c4 #afej74  4 
7b7 ,effective date ,the amendment made 
by subsection 7a7 shall take effect on  
the effective date of the regulations   
described in section #b7;c74  7c7       
,preferred lender arrangement ,section  
#aea7h77;,a77ii7 of the ,higher         
,education ,act of #aife 7#bj ,u4,s4,c4 
#ajai7h77;,a77ii77 is amended by        
inserting certifying1 after promoting14 
#d4 ,report  7a7 ,in general ,not later 
than #bd months after the issuance of   
regulations under section #b7;c71 the   
,director of the ,consumer ,financial   
,protection ,bureau and the ,secretary  
of ,education shall jointly submit to   
,congress a report on the compliance    
of--  7#a7 private educational lenders  
with section #abh7;e77#c7 of the ,truth 

in ,lending ,act 7#ae ,u4,s4,c4         
#afch7;e77#c771 as amended by section   
#b2 and  7#b7 institutions of higher    
education with section #dhg7;a77#bh7 of 
the ,higher ,education ,act of #aife    
7#bj ,u4,s4,c4 #ajid7;a77#bh771 as      
amended by section #c4  7b7 ,contents   
,the contents of the report described in
 subsection 7a7 shall include           
information about the degree to which   
specific institutions utilize           
certifications in effectively--  7#a7   
encouraging the exhaustion of ,federal  
student loan eligibility by borrowers   
prior to taking on private education    
loan debt2 and  7#b7 lowering private   
education loan debt by borrowers4