INSTITUTION AND LENDER REPORTING AND DISCLOSURE REQUIREMENTS.

SEC. 120. INSTITUTION AND LENDER REPORTING AND DISCLOSURE REQUIREMENTS. Title I (as amended by this title) (20 U.S.C. 1001 et seq.) is further amended by adding at the end the following:“PART E—LENDER AND INSTITUTION REQUIREMENTS RELATING TO EDUCATION LOANS“SEC. 151. DEFINITIONS. “In this part:“(1) Agent.—The term ‘agent’ means an officer or employee of a covered institution or an institution-affiliated organization.“(2) Covered institution.—The term ‘covered institution’ means any institution of higher education, as such term is 122 STAT. 3118 defined in section 102, that receives any Federal funding or assistance.“(3) Education loan.—The term ‘education loan’ (except when used as part of the term ‘private education loan’) means—“(A) any loan made, insured, or guaranteed under part B of title IV;“(B) any loan made under part D of title IV; or“(C) a private education loan.“(4) Eligible lender.—The term ‘eligible lender’ has the meaning given such term in section 435(d).“(5) Institution-affiliated organization.—The term ‘institution-affiliated organization’—“(A) means any organization that—“(i) is directly or indirectly related to a covered institution; and“(ii) is engaged in the practice of recommending, promoting, or endorsing education loans for students attending such covered institution or the families of such students;“(B) may include an alumni organization, athletic organization, foundation, or social, academic, or professional organization, of a covered institution; and“(C) notwithstanding subparagraphs (A) and (B), does not include any lender with respect to any education loan secured, made, or extended by such lender.“(6) Lender.—The term ‘lender’ (except when used as part of the terms ‘eligible lender’ and ‘private educational lender’)—“(A) means—“(i) in the case of a loan made, insured, or guaranteed under part B of title IV, an eligible lender;“(ii) in the case of any loan issued or provided to a student under part D of title IV, the Secretary; and“(iii) in the case of a private education loan, a private educational lender as defined in section 140 of the Truth in Lending Act; and“(B) includes any other person engaged in the business of securing, making, or extending education loans on behalf of the lender.“(7) Officer.—The term ‘officer’ includes a director or trustee of a covered institution or institution-affiliated organization, if such individual is treated as an employee of such covered institution or institution-affiliated organization, respectively.“(8) Preferred lender arrangement.—The term ‘preferred lender arrangement’—“(A) means an arrangement or agreement between a lender and a covered institution or an institution-affiliated organization of such covered institution—“(i) under which a lender provides or otherwise issues education loans to the students attending such covered institution or the families of such students; and“(ii) that relates to such covered institution or such institution-affiliated organization recommending, promoting, or endorsing the education loan products of the lender; and“(B) does not include—122 STAT. 3119“(i) arrangements or agreements with respect to loans under part D of title IV; or“(ii) arrangements or agreements with respect to loans that originate through the auction pilot program under section 499(b).“(9) Private education loan.—The term ‘private education loan’ has the meaning given the term in section 140 of the Truth in Lending Act. “SEC. 152. RESPONSIBILITIES OF COVERED INSTITUTIONS, INSTITUTION-AFFILIATED ORGANIZATIONS, AND LENDERS.“(a) Responsibilities of Covered Institutions and Institution-Affiliated Organizations.—“(1) Disclosures by covered institutions and institution-affiliated organizations.—“(A) Preferred lender arrangement disclosures.—In addition to the disclosures required by subsections (a)(27) and (h) of section 487 (if applicable), a covered institution, or an institution-affiliated organization of such covered institution, that participates in a preferred lender arrangement shall disclose—“(i) on such covered institution’s or institution-affiliated organization’s website and in all informational materials described in subparagraph (C) that describe or discuss education loans—“(I) the maximum amount of Federal grant and loan aid under title IV available to students, in an easy to understand format;“(II) the information required to be disclosed pursuant to section 153(a)(2)(A)(i), for each type of loan described in section 151(3)(A) that is offered pursuant to a preferred lender arrangement of the institution or organization to students of the institution or the families of such students; and“(III) a statement that such institution is required to process the documents required to obtain a loan under part B of title IV from any eligible lender the student selects; and“(ii) on such covered institution’s or institution-affiliated organization’s website and in all informational materials described in subparagraph (C) that describe or discuss private education loans—“(I) in the case of a covered institution, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(11) of the Truth in Lending Act (15 U.S.C. 1638(e)(11)), for each type of private education loan offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and“(II) in the case of an institution-affiliated organization of a covered institution, the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)), for each type of private education loan 122 STAT. 3120 offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students.“(B) Private education loan disclosures.—A covered institution, or an institution-affiliated organization of such covered institution, that provides information regarding a private education loan from a lender to a prospective borrower shall—“(i) provide the prospective borrower with the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)) for such loan;“(ii) inform the prospective borrower that—“(I) the prospective borrower may qualify for loans or other assistance under title IV; and“(II) the terms and conditions of loans made, insured, or guaranteed under title IV may be more favorable than the provisions of private education loans; and“(iii) ensure that information regarding private education loans is presented in such a manner as to be distinct from information regarding loans that are made, insured, or guaranteed under title IV.“(C) Informational materials.—The informational materials described in this subparagraph are publications, mailings, or electronic messages or materials that—“(i) are distributed to prospective or current students of a covered institution and families of such students; and“(ii) describe or discuss the financial aid opportunities available to students at an institution of higher education.“(2) Use of institution name.—A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans shall not agree to the lender’s use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols readily identified with such institution or organization, in the marketing of private education loans to students attending such institution in any way that implies that the loan is offered or made by such institution or organization instead of the lender.“(3) Use of lender name.—A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans shall ensure that the name of the lender is displayed in all information and documentation related to such loans.“(b) Lender Responsibilities.—“(1) Disclosures by lenders.—“(A) Disclosures to borrowers.—“(i) Federal education loans.—For each education loan that is made, insured, or guaranteed under part B or D of title IV (other than a loan made under section 428C or a Federal Direct Consolidation Loan), 122 STAT. 3121 at or prior to the time the lender disburses such loan, the lender shall provide the prospective borrower or borrower, in writing (including through electronic means), with the disclosures described in subsections (a) and (c) of section 433.“(ii) Private education loans.—For each of a lender’s private education loans, the lender shall comply with the disclosure requirements under section 128(e) of the Truth in Lending Act (15 U.S.C. 1638(e)).“(B) Disclosures to the secretary.—“(i) In general.—Each lender of a loan made, insured, or guaranteed under part B of title IV shall, on an annual basis, report to the Secretary—“(I) any reasonable expenses paid or provided under section 435(d)(5)(D) or paragraph (3)(B) or (7) of section 487(e) to any agent of a covered institution who—“(aa) is employed in the financial aid office of a covered institution; or“(bb) otherwise has responsibilities with respect to education loans or other financial aid of the institution; and“(II) any similar expenses paid or provided to any agent of an institution-affiliated organization who is involved in the practice of recommending, promoting, or endorsing education loans.“(ii) Contents of reports.—Each report described in clause (i) shall include—“(I) the amount for each specific instance in which the lender provided such expenses;“(II) the name of any agent described in clause (i) to whom the expenses were paid or provided;“(III) the dates of the activity for which the expenses were paid or provided; and“(IV) a brief description of the activity for which the expenses were paid or provided.“(iii) Report to congress.—The Secretary shall summarize the information received from the lenders under this subparagraph in a report and transmit such report annually to the authorizing committees.“(2) Certification by lenders.—Not later than 18 months after the date of enactment of the Higher Education Opportunity Act—“(A) in addition to any other disclosure required under Federal law, each lender of a loan made, insured, or guaranteed under part B of title IV that participates in one or more preferred lender arrangements shall annually certify the lender’s compliance with the requirements of this Act; and“(B) if an audit of a lender is required pursuant to section 428(b)(1)(U)(iii), the lender’s compliance with the requirements under this section shall be reported on and attested to annually by the auditor of such lender.122 STAT. 3122 “SEC. 153. LOAN INFORMATION TO BE DISCLOSED AND MODEL DISCLOSURE FORM FOR COVERED INSTITUTIONS, INSTITUTION-AFFILIATED ORGANIZATIONS, AND LENDERS PARTICIPATING IN PREFERRED LENDER ARRANGEMENTS.“(a) Duties of the Secretary.—“(1) Determination of minimum disclosures.—“(A) In general.—Not later than 18 months after the date of enactment of the Higher Education Opportunity Act, the Secretary, in coordination with the Board of Governors of the Federal Reserve System, shall determine the minimum information that lenders, covered institutions, and institution-affiliated organizations of such covered institutions participating in preferred lender arrangements shall make available regarding education loans described in section 151(3)(A) that are offered to students and the families of such students.“(B) Consultation and content of minimum disclosures.—In carrying out subparagraph (A), the Secretary shall—“(i) consult with students, the families of such students, representatives of covered institutions (including financial aid administrators, admission officers, and business officers), representatives of institution-affiliated organizations, secondary school guidance counselors, lenders, loan servicers, and guaranty agencies;“(ii) include, in the minimum information under subparagraph (A) that is required to be made available, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)), modified as necessary to apply to such loans; and“(iii) consider the merits of requiring each covered institution, and each institution-affiliated organization of such covered institution, with a preferred lender arrangement to provide to prospective borrowers and the families of such borrowers the following information for each type of education loan offered pursuant to such preferred lender arrangement:“(I) The interest rate and terms and conditions of the loan for the next award year, including loan forgiveness and deferment.“(II) Information on any charges, such as origination and Federal default fees, that are payable on the loan, and whether those charges will be—“(aa) collected by the lender at or prior to the disbursal of the loan, including whether the charges will be deducted from the proceeds of the loan or paid separately by the borrower; or“(bb) paid in whole or in part by the lender.“(III) The annual and aggregate maximum amounts that may be borrowed.“(IV) The average amount borrowed from the lender by students who graduated from such 122 STAT. 3123 institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable, and who obtained loans of such type from the lender for the preceding year.“(V) The amount the borrower may pay in interest, based on a standard repayment plan and the average amount borrowed from the lender by students who graduated from such institution in the preceding year and who obtained loans of such type from the lender for the preceding year, for—“(aa) borrowers who take out loans under section 428;“(bb) borrowers who take out loans under section 428B or 428H, who pay the interest while in school; and“(cc) borrowers who take out loans under section 428B or 428H, who do not pay the interest while in school.“(VI) The consequences for the borrower of defaulting on a loan, including limitations on the discharge of an education loan in bankruptcy.“(VII) Contact information for the lender.“(VIII) Other information suggested by the persons and entities with whom the Secretary has consulted under clause (i).“(2) Required disclosures.—After making the determinations under paragraph (1), the Secretary, in coordination with the Board of Governors of the Federal Reserve System and after consultation with the public, shall—“(A)(i) provide that the information determined under paragraph (1) shall be disclosed by covered institutions, and institution-affiliated organizations of such covered institutions, with preferred lender arrangements to prospective borrowers and the families of such borrowers regarding the education loans described in section 151(3)(A) that are offered pursuant to such preferred lender arrangements; and“(ii) make clear that such covered institutions and institution-affiliated organizations may provide the required information on a form designed by the institution or organization instead of the model disclosure form described in subparagraph (B);“(B) develop a model disclosure form that may be used by covered institutions, institution-affiliated organizations, and preferred lenders that includes all of the information required under subparagraph (A)(i) in a format that—“(i) is easily usable by students, families, institutions, institution-affiliated organizations, lenders, loan servicers, and guaranty agencies; and“(ii) is similar in format to the form developed by the Board of Governors of the Federal Reserve System under paragraphs (1) and (5)(A) of section 128(e), in order to permit students and the families of students to easily compare private education loans and education loans described in section 151(3)(A); and122 STAT. 3124“(C) update such model disclosure form periodically, as necessary.“(b) Duties of Lenders.—Each lender that has a preferred lender arrangement with a covered institution, or an institution-affiliated organization of such covered institution, with respect to education loans described in section 151(3)(A) shall annually, by a date determined by the Secretary, provide to such covered institution or such institution-affiliated organization, and to the Secretary, the information the Secretary requires pursuant to subsection (a)(2)(A)(i) for each type of education loan described in section 151(3)(A) that the lender plans to offer pursuant to such preferred lender arrangement to students attending such covered institution, or to the families of such students, for the next award year.“(c) Duties of Covered Institutions and Institution-Affiliated Organizations.—“(1) Providing information to students and families.—“(A) In general.—Each covered institution, and each institution-affiliated organization of such covered institution, that has a preferred lender arrangement shall provide the following information to students attending such institution, or the families of such students, as applicable:“(i) The information the Secretary requires pursuant to subsection (a)(2)(A)(i), for each type of education loan described in section 151(3)(A) offered pursuant to a preferred lender arrangement to students of such institution or the families of such students.“(ii)(I) In the case of a covered institution, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(11) of the Truth in Lending Act (15 U.S.C. 1638(e)(11)) to the covered institution, for each type of private education loan offered pursuant to such preferred lender arrangement to students of such institution or the families of such students.“(II) In the case of an institution-affiliated organization, the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)), for each type of private education loan offered pursuant to such preferred lender arrangement to students of the institution with which such organization is affiliated or the families of such students.“(B) Timely provision of information.—The information described in subparagraph (A) shall be provided in a manner that allows for the students or the families to take such information into account before selecting a lender or applying for an education loan.“(2) Annual report.—Each covered institution, and each institution-affiliated organization of such covered institution, that has a preferred lender arrangement, shall—“(A) prepare and submit to the Secretary an annual report, by a date determined by the Secretary, that includes, for each lender that has a preferred lender arrangement with such covered institution or organization—122 STAT. 3125“(i) the information described in clauses (i) and (ii) of paragraph (1)(A); and“(ii) a detailed explanation of why such covered institution or institution-affiliated organization entered into a preferred lender arrangement with the lender, including why the terms, conditions, and provisions of each type of education loan provided pursuant to the preferred lender arrangement are beneficial for students attending such institution, or the families of such students, as applicable; and“(B) ensure that the report required under subparagraph (A) is made available to the public and provided to students attending or planning to attend such covered institution and the families of such students.“(3) Code of conduct.—“(A) In general.—Each covered institution, and each institution-affiliated organization of such covered institution, that has a preferred lender arrangement, shall comply with the code of conduct requirements of subparagraphs (A) through (C) of section 487(a)(25).“(B) Applicable code of conduct.—For purposes of subparagraph (A), an institution-affiliated organization of a covered institution shall—“(i) comply with the code of conduct developed and published by such covered institution under subparagraphs (A) and (B) of section 487(a)(25);“(ii) if such institution-affiliated organization has a website, publish such code of conduct prominently on the website; and“(iii) administer and enforce such code of conduct by, at a minimum, requiring that all of such organization’s agents with responsibilities with respect to education loans be annually informed of the provisions of such code of conduct. “SEC. 154. LOAN INFORMATION TO BE DISCLOSED AND MODEL DISCLOSURE FORM FOR INSTITUTIONS PARTICIPATING IN THE WILLIAM. D. FORD FEDERAL DIRECT LOAN PROGRAM.“(a) Provision of Disclosures to Institutions by the Secretary.—Not later than 180 days after the development of the model disclosure form under section 153(a)(2)(B), the Secretary shall provide each institution of higher education participating in the William D. Ford Direct Loan Program under part D of title IV with a completed model disclosure form including the same information for Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, and Federal Direct PLUS loans made to, or on behalf of, students attending each such institution as is required on such form for loans described in section 151(3)(A).“(b) Duties of Institutions.—“(1) In general.—Each institution of higher education participating in the William D. Ford Direct Loan Program under part D of title IV shall—“(A) make the information the Secretary provides to the institution under subsection (a) available to students attending or planning to attend the institution, or the families of such students, as applicable; and122 STAT. 3126“(B) if the institution provides information regarding a private education loan to a prospective borrower, concurrently provide such borrower with the information the Secretary provides to the institution under subsection (a).“(2) Choice of forms.—In providing the information required under paragraph (1), an institution of higher education may use a comparable form designed by the institution instead of the model disclosure form developed under section 153(a)(2)(B).” .