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
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.
This Act may be cited as the
Student Loan Default Prevention
Voluntary, flexible agreements
by redesignating subsection (d) as subsection (e); and
by inserting after subsection (c), the following:
Supplemental student loan services
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.
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).
The services described in this paragraph for borrowers (including potential borrowers, if applicable) of loans made under this part or part D may include—
delinquency prevention and default aversion activities;
collection of defaulted loans;
monitoring of institutions participating in the program under part D;
training of financial aid officials; and
informational outreach to schools and students in support of access to higher education and financial literacy.
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.
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.
The Secretary shall publish in the Federal Register a notice to all guarantee agencies that sets forth—
an invitation for the guarantee agencies to enter into or revise agreements under this subsection; and
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.
The Secretary shall notify the members of the authorizing committees not later than 30 days prior to concluding an agreement under this subsection.
The text of any voluntary flexible agreements entered into or revised under this subsection shall be readily available to the public.