119-s801

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 801 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 801

 To amend the Higher Education Act of 1965 to provide for fiscal 
accountability, to require institutions of higher education to publish 
 information regarding student success, to provide for school 
 accountability for student loans, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 February 27, 2025

 Mr. Lee introduced the following bill; which was read twice and 
 referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

 A BILL

 To amend the Higher Education Act of 1965 to provide for fiscal 
accountability, to require institutions of higher education to publish 
 information regarding student success, to provide for school 
 accountability for student loans, 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 ``Higher Education Reform and 
Opportunity Act''.

 TITLE I--FISCAL ACCOUNTABILITY

SEC. 101. SIMPLIFICATION OF FEDERAL STUDENT LOANS.

    (a) Termination.--

Section 451 of the Higher Education Act of 1965 
(20 U.S.C. 1087a) is amended--

    (1) in subsection

    (a) , by adding at the end the following: 
 ``No sums may be expended after September 30, 2028, with 
 respect to loans under this part for which the first 
 disbursement is after such date, except Federal Direct 
 simplification loans under 

section 460A.''; and

    (2) by adding at the end, the following:
 ``
            (d) Termination of Authority To Make New Loans.--Notwithstanding 
subsection

    (a) or any other provision of law--
 ``

    (1) no new loans may be made under this part after 
 September 30, 2028, except Federal Direct simplification loans 
 under 

section 460A; and
 ``

    (2) no funds are authorized to be appropriated, or may be 
 expended, under this Act, or any other Act to make loans under 
 this part for which the first disbursement is after September 
 30, 2028, except Federal Direct simplification loans under 
 

section 460A, or as expressly authorized by an Act of Congress 
 enacted after the date of enactment of the Higher Education 
 Reform and Opportunity Act.
 ``

    (e) Student Eligibility Beginning With Award Year 2025.--
 ``

    (1) New borrowers.--No loan may be made under this part 
 to a new borrower for which the first disbursement is after 
 June 30, 2025, except Federal Direct simplification loans under 
 

section 460A.
 ``

    (2) Borrowers with outstanding balances.--Subject to 
 paragraph

    (3) , with respect to a borrower who, as of July 1, 
 2025, has an outstanding balance of principal or interest owing 
 on a loan made under this part that is not a Federal Direct 
 simplification loan under 

section 460A, such borrower may--
 ``
        (A) in the case of such a loan made to the 
 borrower for enrollment in a program of undergraduate 
 education, borrow loans made under this part that are 
 not Federal Direct simplification loans under 

section 460A for any program of undergraduate education through 
 the close of September 30, 2028;
 ``
        (B) in the case of such a loan made to the 
 borrower for enrollment in a program of graduate or 
 professional education, borrow loans made under this 
 part that are not Federal Direct simplification loans 
 under 

section 460A for any program of graduate or 
 professional education through the close of September 
 30, 2028; and
 ``
            (C) in the case of such a loan made to the 
 borrower on behalf of a dependent student for the 
 student's enrollment in a program of undergraduate 
 education, borrow loans made under this part that are 
 not Federal Direct simplification loans under 

section 460A on behalf of such student through the close of 
 September 30, 2028.
 ``

    (3) Loss of eligibility.--A borrower described in 
 paragraph

    (2) who borrows a Federal Direct simplification loan 
 made under 

section 460A for which the first disbursement is 
 made before September 30, 2028, shall lose the borrower's 
 eligibility to borrow a loan under this part that is not a 
 Federal Direct simplification loan under 

section 460A in 
 accordance with paragraph

    (2) .''.

    (b) Federal Direct Simplification Loans.--Part D of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by 
adding at the end the following:

``

SEC. 460A. FEDERAL DIRECT SIMPLIFICATION LOANS.

 ``

    (a) In General.--Beginning on July 1, 2025, except as provided in 

section 451

    (e) , the Secretary shall make loans to borrowers under this 
section. Loans made under this section shall be known as Federal Direct 
simplification loans.
 ``

    (b) Federal Direct Simplification Loans.--The provisions of this 
part shall apply with respect to Federal Direct simplification loans, 
except that Federal Direct simplification loans shall be made in 
accordance with the following:
 ``

    (1) The applicable rate of interest on a loan made under 
 this section shall--
 ``
        (A) in the case of such loans issued to 
 undergraduate students, for loans disbursed during any 
 12-month period beginning on July 1 and ending on June 
 30, be determined on the preceding June 1 and be equal 
 to the lesser of--
 ``
            (i) a rate equal to the high yield of the 
 10-year Treasury note auctioned at the final 
 auction held prior to such June 1 plus 2.05 
 percent; or
 ``
            (ii) 8.25 percent; and
 ``
        (B) in the case of such loans issued to graduate 
 or professional students, for loans disbursed during 
 any 12-month period beginning on July 1 and ending on 
 June 30, be determined on the preceding June 1 and be 
 equal to the lesser of--
 ``
            (i) a rate equal to the high yield of the 
 10-year Treasury note auctioned at the final 
 auction held prior to such June 1 plus 3.6 
 percent; or
 ``
            (ii) 9.5 percent.
 ``

    (2) Interest on a loan made under this section shall 
 begin to accrue on the date the loan is disbursed.
 ``

    (3) The maximum--
 ``
        (A) annual amount of loans under this section a 
 dependent undergraduate student may borrow in any 
 academic year (as defined in 

section 481

    (a)

    (2) ) or its 
 equivalent shall be equal to $7,500; and
 ``
        (B) aggregate amount of loans under this section 
 a dependent undergraduate student may borrow shall be 
 equal to $30,000.
 ``

    (4) The maximum--
 ``
        (A) annual amount of loans under this section an 
 independent undergraduate student may borrow in any 
 academic year (as defined in 

section 481

    (a)

    (2) ) or its 
 equivalent shall be equal to $15,000; and
 ``
        (B) aggregate amount of loans under this section 
 an undergraduate independent student may borrow shall 
 be equal to $60,000.
 ``

    (5) The maximum--
 ``
        (A) annual amount of loans under this section a 
 graduate or professional student may borrow in any 
 academic year (as defined in 

section 481

    (a)

    (2) ) or its 
 equivalent shall be equal to $18,500; and
 ``
        (B) aggregate amount of loans under this section 
 a graduate or professional student may borrow shall be 
 equal to $74,000.
 ``

    (6) The only length of repayment--
 ``
        (A) for a loan borrowed by an undergraduate 
 student shall be 15 years; and
 ``
        (B) for a loan borrowed by a graduate or 
 professional student shall be 25 years.
 ``

    (7) Repayment on a loan made under this section shall 
 begin--
 ``
        (A) after 125 percent of the normal time for 
 completion of the program of study for which the 
 borrower receives the loan under this section; or
 ``
        (B) if the borrower withdraws from the program of 
 study before the borrower completes the program, 6 
 months after the date the borrower withdraws.
 ``

    (8) The Secretary shall not repay or cancel any 
 outstanding balance of principal or interest due on a Federal 
 Direct simplification loan as part of a student loan 
 forgiveness program, including such a program under 

section 455
            (m) and 

section 493C.
 ``
            (c) Authorization To Limit Loan Amounts.--An institution of 
higher education that is required under State law to enroll all 
eligible applicants for an academic year may limit the amount of loans 
under this section that a student may borrow for such academic year to 
not more than the tuition and fees at such institution for such 
academic year.
 ``
            (d) Loan Fee.--The Secretary shall not charge the borrower of a 
loan made under this part an origination fee.
 ``

    (e) Repayment.--A borrower of a loan made under this section may 
accelerate without penalty repayment of the whole or any part of the 
loan.''.

SEC. 102. PHASING OUT LOAN FORGIVENESS.

 The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--

    (1) in 

section 455--
        (A) in subsection
            (d) (1) , in the matter preceding 
 subparagraph
        (A) , by inserting ``(except a Federal 
 Direct simplification loan)'' after ``borrower of a 
 loan made under this part'';
        (B) in subsection

    (e) , by adding at the end the 
 following:
 ``

    (9) Federal direct simplification loans.--Income 
 contingent repayment shall not be available for a Federal 
 Direct simplification loan.''; and
            (C) in subsection
            (m) , by adding at the end the 
 following:
 ``

    (5) Elimination of loan forgiveness.--
 ``
        (A) In general.--Notwithstanding any other 
 provision of this Act and subject to subparagraph
        (B) , 
 with respect to any loan made on or after July 1, 2025, 
 the Secretary may not cancel any outstanding balance of 
 principal and interest due on the loan for the borrower 
 of the loan pursuant to this subsection.
 ``
        (B) Loans for continuing program of study.--In 
 the case of a borrower whose first loan for a program 
 of study is made prior to July 1, 2025, the Secretary 
 may repay or cancel any outstanding balance of 
 principal and interest due on the subsequent loans for 
 that borrower for the same program of study pursuant to 
 this subsection for--
 ``
            (i) loans made during the time it takes 
 to complete that program of study; or
 ``
            (ii) loans made before July 1, 2028;
 whichever occurs earlier.''; and

    (2) in 

section 493C, by adding at the end the following:
 ``

    (f) Elimination of Loan Forgiveness.--
 ``

    (1) In general.--Notwithstanding any other provision of 
 this Act and subject to paragraph

    (2) , with respect to any loan 
 made on or after July 1, 2025, the Secretary may not repay or 
 cancel any outstanding balance of principal and interest due on 
 the loan for the borrower of the loan pursuant to this section.
 ``

    (2) Loans for continuing program of study.--In the case 
 of a borrower whose first loan for a program of study is made 
 prior to July 1, 2025, the Secretary may repay or cancel any 
 outstanding balance of principal and interest due on the 
 subsequent loans for that borrower for the same program of 
 study pursuant to this section for--
 ``
        (A) loans made during the time it takes to 
 complete that program of study; or
 ``
        (B) loans made before July 1, 2028;
 whichever occurs earlier.''.

 TITLE II--ACCREDITATION REFORM

SEC. 201. ACCREDITATION REFORM.

    (a) Definition of Institution of Higher Education.--

Section 102

    (a)

    (1) of the Higher Education Act of 1965 (20 U.S.C. 1002

    (a)

    (1) ) is 
amended--

    (1) by redesignating subparagraphs
        (B) and
            (C) as 
 subparagraphs
            (C) and
            (D) , respectively; and

    (2) by inserting after subparagraph
        (A) the following:
 ``
        (B) if accredited by an authorized accreditation 
 authority in a State that has an alternative 
 accreditation agreement with the Secretary, as 
 described in 

section 498C--
 ``
            (i) an institution that provides 
 postsecondary education;
 ``
            (ii) a postsecondary apprenticeship 
 program; or
 ``
            (iii) a postsecondary education course or 
 program provided by an institution of 
 postsecondary education, a nonprofit 
 organization, or a for-profit organization or 
 business;''.

    (b) State Alternative Accreditation.--Part H of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1099a et seq.) is amended by 
adding at the end the following:

 ``Subpart 4--State Alternative Accreditation

``

SEC. 498C. STATE ALTERNATIVE ACCREDITATION.

 ``

    (a) In General.--Notwithstanding any other provision of law, a 
State may establish an alternative accreditation system for the purpose 
of establishing institutions that provide postsecondary education and 
postsecondary education courses or programs as eligible for funding 
under title IV if the State submits a plan to the Secretary for the 
establishment of the alternative accreditation system. Such 
institutions, courses, or programs may include--
 ``

    (1) institutions that provide postsecondary education 
 that culminates in a certification, credential, or degree;
 ``

    (2) postsecondary apprenticeship programs that culminate 
 in a certification, credential, or degree;
 ``

    (3) any other postsecondary education course or program 
 provided by an institution of postsecondary education, a 
 nonprofit organization, or a for-profit organization or 
 business, that culminates in a certification, credential, or 
 degree; and
 ``

    (4) any of the entities described in paragraphs

    (1) through

    (3) that do not award a postsecondary certification, 
 credential, or degree, provided that such entity provides 
 credit that will be accepted toward a postsecondary 
 certification, credential, or degree at one or more of the 
 entities described in paragraphs

    (1) through

    (3) .
 ``

    (b) Alternative Accreditation Notification.--The alternative 
accreditation plan described in subsection

    (a) shall include the 
following:
 ``

    (1) The State's plan for designating one or more 
 authorized accrediting entities within the State, such as the 
 State Department of Education, another State agency, an 
 industry-specific accrediting agency, or another entity, and an 
 explanation of the process through which the State will select 
 such authorized accrediting entities.
 ``

    (2) The standards or criteria that an institution that 
 provides postsecondary education and a postsecondary education 
 course or program must meet in order to--
 ``
        (A) receive an initial accreditation as part of 
 the alternative accreditation system; and
 ``
        (B) maintain such accreditation.
 ``

    (3) A description of the appeals process through which an 
 institution that provides postsecondary education or a 
 postsecondary education course or program may appeal to an 
 authorized accrediting entity if such institution, course, or 
 program is denied accreditation under the State alternative 
 accreditation system.
 ``

    (4) Any State policy regarding public accessibility to 
 certain information relating to institutions that provide 
 postsecondary education and postsecondary education courses and 
 programs accredited under the State alternative accreditation 
 system, including--
 ``
        (A) the information described in subsection

    (e)

    (1) ; and
 ``
        (B) information about the rates of job placement 
 for individuals who have graduated from an institution 
 or completed a course or program that is accredited 
 under the State alternative accreditation system, if 
 available.
 ``

    (5) An assurance by the State that under the State 
 alternative accreditation system, only institutions that 
 provide postsecondary education and postsecondary education 
 courses or programs that provide a postsecondary certification, 
 credential, or degree, or credits toward a postsecondary 
 certification, credential, or degree (as defined by the State 
 in accordance with paragraph

    (6) ) will be accredited.
 ``

    (6) The State's definition of a postsecondary 
 certification, credential, or degree, as such term applies to 
 the requirement described in paragraph

    (5) .
 ``

    (7) A description of the agreements that the State will 
 enter into with institutions that provide postsecondary 
 education and postsecondary education courses or programs that 
 are accredited under the alternative accreditation system for 
 purposes of accreditation regarding requirements for learning 
 outcomes or labor market outcomes, in lieu of the requirements 
 described under 

section 496

    (a)

    (5) .
 ``

    (8) A description of the agreements that the State will 
 enter into with institutions that provide postsecondary 
 education and postsecondary education courses or programs that 
 are accredited under the alternative accreditation system for 
 purposes of accreditation regarding requirements for 
 instructional time, in lieu of the requirements described under 
 

section 481

    (a)

    (2) .
 ``

    (9) A description of the agreements that the State will 
 enter into with institutions that provide postsecondary 
 education and postsecondary education courses or programs that 
 are accredited under the alternative accreditation system 
 regarding requirements for credit hours or clock hours, or 
 other measures of student learning, in lieu of the requirements 
 described under 

section 481

    (b) .
 ``
            (c) Review and Approval.--Not later than 30 days after the 
Secretary receives a plan from a State regarding an alternative 
accreditation system, the Secretary shall submit to the State and 
Congress, and make publicly available, a response to the State's plan. 
The Secretary shall approve the plan and allow the State to establish 
the alternative accreditation system if the plan meets the requirements 
described in subsection

    (b) .
 ``
            (d) Time Limit.--Each plan approved under subsection
            (c) shall 
allow a State to carry out an alternative accreditation system in the 
State for a period of 5 years.
 ``

    (e) Reporting Requirements.--States that establish an alternative 
accreditation system shall submit a report to the Secretary every 3 
years following the implementation of the alternative accreditation 
system. The report shall include--
 ``

    (1) in the case of a postsecondary education course or 
 program that is accredited through the State alternative 
 accreditation system--
 ``
        (A) the number and percentage of students who 
 successfully complete each such postsecondary education 
 course or program; and
 ``
        (B) for postsecondary education courses or 
 programs that lead to a certification, credential, or 
 degree, the number of students in such course or 
 program;
 ``

    (2) in the case of an institution that provides 
 postsecondary education that is accredited through the State 
 alternative accreditation system--
 ``
        (A) the number and percentage of students who 
 successfully obtain a postsecondary certification, 
 credential, or degree from such institution; and
 ``
        (B) the number and percentage of students who do 
 not successfully obtain a postsecondary certification, 
 credential, or degree from such institution but do 
 obtain credit from such institution toward a 
 postsecondary degree, credential, or certification; and
 ``

    (3) a description of any requirements for third-party 
 verification of information contained in the report.''.
            (c) Title IV Eligibility Requirements.--Part G of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by 
adding at the end the following:

``

SEC. 494A. STATE ACCREDITED INSTITUTIONS, PROGRAMS, OR COURSES.

 ``Notwithstanding any other provision of law, an institution, 
program, or course that is eligible for funds under this title in 
accordance with 

section 102

    (a)

    (1)
        (B) and meets the requirements of 

section 498C--
 ``

    (1) shall not be required to meet the requirements of 
 

section 496; and
 ``

    (2) shall not be required to meet the requirements 
 described in subsections

    (a)

    (2) and

    (b) of 

section 481.''.

 TITLE III--TRANSPARENCY IN HIGHER EDUCATION

SEC. 301. TIME FOR TRANSPARENCY IN HIGHER EDUCATION.

    (a) In General.--Title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) is amended--

    (1) in 

section 487

    (a) , by adding at the end the following:
 ``

    (30) The institution will publish information in 
 compliance with 

section 494B.''; and

    (2) in part G, by adding at the end the following:

``

SEC. 494B. INSTITUTIONAL PUBLICATION OF INFORMATION.

 ``

    (a) Publication of Information.--
 ``

    (1) In general.--Each institution of higher education 
 participating in a program under this title shall publish on 
 the institution's website and in an alternative format, on an 
 annual basis, the information described in paragraphs

    (2) and

    (3) . To the extent that such data is available, an institution 
 may use data that the institution is already collecting in 
 accordance with other Federal requirements.
 ``

    (2) Information.--Each institution of higher education 
 described in paragraph

    (1) shall publish, with respect to the 
 institution as a whole and with respect to each program of 
 study offered by the institution, the following information for 
 the most recent fiscal year for which the information is 
 available, to the extent the information is available:
 ``
        (A) For each of the following, the percentage and 
 number of students enrolled at the institution or in 
 the program of study, as applicable, who receive the 
 following:
 ``
            (i) Federal grant aid, including Federal 
 Pell Grants under subpart 1 of part A, Federal 
 Supplemental Educational Opportunity Grants 
 under subpart 3 of part A, or any other Federal 
 postsecondary education grant aid or subsidy.
 ``
            (ii) Federal student loans, including 
 Federal loans under part D.
 ``
            (iii) State grant aid.
 ``
            (iv) Institutional grants.
 ``
            (v) A student loan from a State.
 ``
        (B) Student body enrollment status, including as 
 a--
 ``
            (i) first-time, full-time student;
 ``
            (ii) first-time, part-time student;
 ``
            (iii) non-first-time, full-time student; 
 and
 ``
            (iv) non-first-time, part-time student.
 ``
            (C) Information about students that includes the 
 following:
 ``
            (i) The percentage of students who do not 
 complete the program of study the student 
 initially started upon enrollment.
 ``
            (ii) The percentage of students who 
 transfer.
 ``
            (iii) The percentage of students who 
 complete the program of study the student 
 initially started upon enrollment.
 ``
            (iv) The average length of time for a 
 student to complete the program of study.
 ``
            (v) The percentage of students who 
 continue on to higher levels of education.
 ``
            (vi) The percentage of former students 
 who received financial aid who are employed at 
 2, 4, and 6 years after graduating, 
 disaggregated by program of study.
 ``
            (vii) The median earnings of former 
 students who earned a degree or credential and 
 received financial aid on the date that is 5, 
 10, and 15 years after the date the students 
 first enrolled in a program of study at the 
 institution, disaggregated by program of study.
 ``
            (viii) The median earnings of former 
 students who received financial aid on the date 
 that is 5, 10, and 15 years after the date the 
 students first enrolled in a program of study 
 at the institution, disaggregated by program of 
 study.
 ``

    (3) Publication of default and non-repayment rates.--In 
 addition to the information described in paragraph

    (2) , each 
 institution of higher education described in paragraph

    (1) shall publish, with respect to the institution as a whole and 
 with respect to each program of study offered by the 
 institution, the following information for the most recent 
 fiscal year for which the information is available:
 ``
        (A) The average amount of total Federal student 
 loan debt accrued upon graduation.
 ``
        (B) The average amount of total Federal student 
 loan debt accrued by students who leave the institution 
 without having graduated.
 ``
            (C) Federal student loan default rate.
 ``
            (D) Federal student loan non-repayment rate.
 ``
        (E) Default and non-repayment rate, including as 
 a--
 ``
            (i) first-time, full-time student;
 ``
            (ii) first-time, part-time student;
 ``
            (iii) non-first-time, full-time student; 
 and
 ``
            (iv) non-first-time, part-time student.
 ``
        (F) Default and non-repayment rate, of--
 ``
            (i) students who complete a program of 
 study;
 ``
            (ii) students who transfer; and
 ``
            (iii) students who do not complete a 
 program of study.
 ``

    (b) Privacy.--
 ``

    (1) Compliance with ferpa.--In carrying out this section, 
 an institution of higher education and any personnel of the 
 institution shall not share any personally identifiable 
 information and shall act in accordance with 

section 444 of the 
 General Education Provisions Act (20 U.S.C. 1232g, commonly 
 known as the `Family Educational Rights and Privacy Act of 
 1974').
 ``

    (2) Prohibition on use of information.--Information 
 published pursuant to this section shall not be used by a 
 Federal employee, agency, or officer, or an institution of 
 higher education to take action against an individual.
 ``

    (3) Penalties.--The Secretary shall establish penalties 
 for a violation of paragraph

    (1) or

    (2) that includes both a 
 monetary fine and up to 5 years in prison.
 ``
            (c) Rule of Construction.--Nothing in this section shall be 
construed to authorize or permit the Secretary or any employee or 
contractor of the Department to mandate, direct, or control the 
selection of practices or curriculum by an institution of higher 
education.''.

    (b) GAO Report.--

    (1) Study.--The Comptroller General of the United States 
 shall conduct a study that compiles all the institutional 
 publication of information pursuant to 

section 494B of the 
 Higher Education Act of 1965, as added by subsection

    (a) of 
 this section.

    (2) Report.--Not later than October 1 of the fourth fiscal 
 year after the date of enactment of this Act, the Comptroller 
 General of the United States shall submit a report containing 
 the results of the study under paragraph

    (1) to the appropriate 
 committees of Congress.

 TITLE IV--SCHOOL ACCOUNTABILITY FOR STUDENT LOANS

SEC. 401. SCHOOL ACCOUNTABILITY FOR STUDENT LOANS.

    (a) Default Rate Fine.--

Section 487 of the Higher Education Act of 
1965 (20 U.S.C. 1094), as amended by 

section 301, is further amended--

    (1) in subsection

    (a) , by adding at the end the following:
 ``

    (31) The institution will pay a default rate fine that is 
 determined pursuant to subsection

    (k) .''; and

    (2) by adding at the end the following:
 ``

    (k) Default Rate Fine.--
 ``

    (1) In general.--Each institution shall pay to the 
 Secretary an annual default rate fine in accordance with this 
 subsection in an amount determined under paragraph

    (2) .
 ``

    (2) Fine.--
 ``
        (A) In general.--Each institution shall pay a 
 default rate fine for a fiscal year in an amount that 
 is equal to the applicable percentage of outstanding 
 loans.
 ``
        (B) Applicable percentage.--In this paragraph the 
 term `applicable percentage' means a percentage equal 
 to--
 ``
            (i) 15 percent; minus
 ``
            (ii) the average rate of total 
 unemployment in the United States, as 
 determined by the Secretary of Labor.
 ``
            (C) Outstanding loans.--In this paragraph the 
 term `outstanding loans' means the total amount of 
 loans issued to students for attendance at the 
 institution, for which regular on-time payments are not 
 being made.
 ``
            (D) Regular on-time payments.--In this paragraph 
 the term `regular on-time payments' means payments that 
 are, at a minimum, equal to the fixed monthly amount 
 necessary to pay off the total amount of Federal 
 student loans of the borrower within the allotted 
 repayment time based on the borrower's repayment plan.
 ``

    (3) Credit for certain institutions.--Each institution 
 shall receive a $400 credit for a fiscal year for each graduate 
 of the institution who received a Federal Pell Grant while 
 enrolled at the institution during such fiscal year.
 ``

    (4) Flexibility in counsel and advice.--Notwithstanding 
 any other provision of the Act, the Secretary shall grant 
 institutions of higher education flexibility under this Act to 
 counsel and advise students on Federal financial aid, including 
 granting flexibility for institutions to award less than the 
 maximum amount of Federal student aid for which an individual 
 is eligible if the cost of tuition, room, and board at the 
 institution is less than such maximum amount.''.

    (b) Flexibility in Counseling and Advice.--

Section 485
            (l) of the 
Higher Education Act of 1965 (20 U.S.C. 1092
            (l) ) is amended by adding 
at the end the following:
 ``

    (3) Flexibility in counseling and advice.--In addition to 
 the entrance counseling under paragraph

    (1) , an eligible 
 institution may require any borrower, at or prior to the time 
 of a disbursement to the borrower of a loan made under part D, 
 to receive the information described in paragraph

    (2) with 
 respect to such loan, or any other financial counseling, 
 including financial literacy counseling.''.
 <all>