House Study Bill 152 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON HIGHER EDUCATION BILL BY CHAIRPERSON COLLINS) A BILL FOR An Act concerning information regarding certain state and 1 federal student loan programs. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2124YC (4) 91 je/jh
H.F. _____ Section 1. SHORT TITLE. This Act shall be known and may be 1 cited as the Increasing Student Financial Aid Awareness Act. 2 Sec. 2. NEW SECTION . 261K.1 Definitions. 3 As used in this chapter, unless the context otherwise 4 requires: 5 1. Bureau means the bureau of Iowa college aid of the 6 department of education. 7 2. Corporation means the Iowa student loan liquidity 8 corporation. 9 Sec. 3. NEW SECTION . 261K.2 Student loan information. 10 The corporation shall provide the following information to 11 the bureau: 12 1. An estimate of the annual percentage rate of the federal 13 direct plus loan as well as the assumptions used by the 14 corporation to prepare the estimate. The corporation shall 15 provide this information annually after the interest rate for a 16 federal direct plus loan is established. 17 2. The address of the corporations internet site that 18 includes information on possible annual percentage rates for 19 a college family loan and partnership loan offered by the 20 corporation and the disclosures required by 34 C.F.R. 601.11. 21 The corporation shall notify the bureau when the annual 22 percentage rate for the college family loan or partnership loan 23 changes. 24 3. The address of the corporations internet site that 25 includes a chart comparing the terms and conditions of the 26 federal direct plus loan with those of the college family loan 27 and the partnership loan. The corporation shall notify the 28 bureau when any information on the chart is changed. 29 Sec. 4. NEW SECTION . 261K.3 Analysis of student loan 30 information. 31 Upon receiving information from the corporation as required 32 by section 261K.2, the bureau shall do all of the following: 33 1. Provide the estimate and assumptions required by section 34 261K.2, subsection 1, to the superintendent of banking. The 35 -1- LSB 2124YC (4) 91 je/jh 1/ 5
H.F. _____ superintendent shall review the estimate and assumptions and 1 report the superintendents findings as to the accuracy and 2 validity of the estimate and assumptions to the bureau. 3 2. Using the report provided pursuant to subsection 1 and 4 any other resources available to the bureau, determine if 5 the information included in the chart described in section 6 261K.2, subsection 3, is accurate. If the bureau determines 7 any information is inaccurate, the bureau shall notify the 8 corporation of the inaccuracy and the manner in which the 9 inaccuracy can be corrected. 10 3. Compare the estimated annual percentage rate for the 11 federal direct plus loan to the annual percentage rates for 12 the college family loan and the partnership loan and determine 13 if the college family loan or the partnership loan may offer a 14 lower annual percentage rate than the federal direct plus loan. 15 Sec. 5. NEW SECTION . 261K.4 Online statement. 16 If the bureau determines, based on section 261K.3, 17 subsection 3, that the college family loan or the partnership 18 loan may offer a lower annual percentage rate than the federal 19 direct plus loan, the bureau shall publish on the bureaus 20 internet site a statement that contains the information 21 required by this section. The bureau shall remove the 22 statement if a change in annual percentage rate results in 23 the college family loan or the partnership loan no longer 24 having the lower rate. The statement must include all of the 25 following: 26 1. An explanation that the supplemental student loan 27 program offered by the state of Iowa, which includes the 28 college family loan and the partnership loan, offers an 29 annual percentage rate that is lower than the estimated annual 30 percentage rate of the federal direct plus loan. 31 2. The estimated annual percentage rate of the federal 32 direct plus loan and the address of the corporations internet 33 site described in section 261K.2, subsection 2. The bureau 34 shall update this information as applicable interest rates and 35 -2- LSB 2124YC (4) 91 je/jh 2/ 5
H.F. _____ annual percentage rates change. 1 3. The address of the corporations internet site described 2 in section 261K.2, subsection 3. 3 Sec. 6. NEW SECTION . 261K.5 Information required in offers 4 of financial aid. 5 By October 1 each year, if the bureau determines, based on 6 section 261K.3, subsection 3, that the college family loan 7 or the partnership loan may offer a lower annual percentage 8 rate than the federal direct plus loan, the bureau shall 9 send to each institution of higher education in this state 10 eligible to receive funds through the college family loan or 11 the partnership loan offered by the corporation the information 12 required by this section. Each institution shall include the 13 information in all offers of financial aid sent to prospective 14 students or their families. The bureau shall notify each 15 institution if a change in annual percentage rate results in 16 the college family loan or the partnership loan no longer 17 having the lower rate, in which case the institution shall no 18 longer be required to include the information unless notified 19 otherwise by the bureau. 20 1. An explanation as described in section 261K.4, 21 subsection 1. 22 2. The address of the bureaus internet site that includes 23 the statement required by section 261K.4. 24 3. The address of the corporations internet site described 25 in section 261K.2, subsection 3. 26 4. A statement that students and their families should 27 utilize federal loan programs for students before considering a 28 federal direct plus loan, college family loan, or partnership 29 loan. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanations substance by the members of the general assembly. 33 This bill concerns information regarding certain state and 34 federal student loan programs and provides duties of the bureau 35 -3- LSB 2124YC (4) 91 je/jh 3/ 5
H.F. _____ of Iowa college aid of the department of education (bureau), 1 the Iowa student loan liquidity corporation (corporation), and 2 certain institutions of higher education in Iowa. 3 The bill requires the corporation to provide specified 4 information to the bureau. Required information includes 5 an estimate of the annual percentage rate (APR) of the 6 federal direct plus loan as well as the assumptions used 7 by the corporation to prepare the estimate, the address of 8 the corporations internet site that includes information 9 on possible APRs for a college family loan and partnership 10 loan offered by the corporation, and the address of the 11 corporations internet site that includes a chart comparing the 12 terms and conditions of the federal direct plus loan with those 13 of the college family loan and the partnership loan. 14 The bill requires the bureau, upon receiving the required 15 information, to determine if the information included in 16 the chart is accurate and notify the corporation of any 17 inaccuracies. The bill requires the bureau to compare the 18 estimated APR for the federal direct plus loan to the APR for 19 the college family loan and the partnership loan and determine 20 if the college family loan or the partnership loan may offer a 21 lower APR than the federal direct plus loan. 22 If the bureau determines that the college family loan or 23 the partnership loan may offer a lower APR than the federal 24 direct plus loan, the bill requires the bureau to publish on 25 the bureaus internet site a statement that contains specified 26 information until the college family loan or the partnership 27 loan no longer has a lower APR. Required information includes 28 an explanation that the supplemental student loan program 29 offered by the state of Iowa, which includes the college family 30 loan and the partnership loan, offers an APR that is lower 31 than the estimated APR of the federal direct plus loan; the 32 estimated APR of the federal direct plus loan and the address 33 of the corporations internet site that includes information 34 on possible APRs for college family loans and partnership 35 -4- LSB 2124YC (4) 91 je/jh 4/ 5
H.F. _____ loans; and the address of the corporations internet site that 1 includes a chart comparing the terms and conditions of the 2 federal direct plus loan with those of the college family loan 3 and the partnership loan. 4 By October 1 each year, if the bureau determines that the 5 college family loan or the partnership loan may offer a lower 6 APR than the federal direct plus loan, the bill additionally 7 requires the bureau to send specified information to each 8 institution of higher education in Iowa eligible to receive 9 funds through the college family loan or the partnership 10 loan. Each institution must include the information in all 11 offers of financial aid sent to prospective students or their 12 families until the bureau determines otherwise and notifies 13 the institution. Required information includes an explanation 14 that the supplemental student loan program offered by the 15 state of Iowa, which includes the college family loan and 16 the partnership loan, offers an APR that is lower than the 17 estimated APR of the federal direct plus loan; the address of 18 the bureaus internet site that includes the statement required 19 by the bill; the address of the corporations internet site 20 that includes a chart comparing the terms and conditions of 21 the federal direct plus loan with those of the college family 22 loan and the partnership loan; and a statement that students 23 and their families should utilize federal loan programs for 24 students before considering a federal direct plus loan, college 25 family loan, or partnership loan. 26 -5- LSB 2124YC (4) 91 je/jh 5/ 5