Bill Summary
The proposed Student Loan Advocacy Act aims to improve the delivery of federal student financial assistance programs. It establishes the Office of the Borrower Advocate within a Performance-Based Organization (PBO) responsible for managing these programs, prioritizing students and borrowers, and increasing oversight of institutions and contractors. The legislation also includes restrictions for the Chief Operating Officer of the PBO to prevent conflicts of interest. Additionally, the legislation authorizes the Secretary to pay a bonus to the COO based on their performance in meeting the goals set forth in their performance agreement. The legislation also requires performance agreements for senior management to include oversight of contractors. The Borrower Advocate, appointed by the Secretary, serves as a liaison for borrowers and is prohibited from having financial interests in entities that contract with the PBO. The Borrower Advocate's office is required to assist borrowers, compile and analyze data on complaints, and make recommendations to Congress and the COO. The legislation also requires the publication of borrower complaints and responses on the Department of Education's website and defines the term "third party servicer."
Possible Impacts
1. Students and borrowers will potentially have an improved experience with federal student financial assistance programs due to the establishment of the Office of the Borrower Advocate, which aims to prioritize their needs and increase oversight of institutions and contractors.
2. The Chief Operating Officer of the PBO may receive a bonus based on their performance in meeting program goals, potentially incentivizing them to improve the delivery of federal student financial assistance programs.
3. Borrowers of loans made under title IV will have access to a liaison in the form of the Borrower Advocate, who will assist them with resolving issues, analyze data on borrower complaints, and make recommendations to Congress for potential improvements to the program.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4596 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 4596
To improve service to students and other participants in the Federal
student financial assistance programs, to establish the Office of the
Borrower Advocate to replace the Student Loan Ombudsman, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 1, 2019
Ms. Omar (for herself and Ms. Scanlon) introduced the following bill;
which was referred to the Committee on Education and Labor
_______________________________________________________________________
A BILL
To improve service to students and other participants in the Federal
student financial assistance programs, to establish the Office of the
Borrower Advocate to replace the Student Loan Ombudsman, 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 ``Student Loan Advocacy Act''.
SEC. 2. PERFORMANCE-BASED ORGANIZATION FOR DELIVERY OF FEDERAL STUDENT
FINANCIAL ASSISTANCE.
(a) PBO.--Section 141 of the Higher Education Act of 1965 (20
U.S.C. 1018) is amended--
(1) in subsection (a), by amending paragraph (2) to read as
follows:
``(2) Purposes.--The purposes of the PBO are as follows:
``(A) To prioritize students and borrowers in the
decisionmaking process of the PBO.
``(B) To improve service to students and other
participants in the Federal student financial
assistance programs authorized under title IV.
``(C) To make such programs more understandable to
students and their parents.
``(D) To increase the efficiency and effectiveness
of such programs for students and their parents.
``(E) To manage the costs of administering such
programs.
``(F) To increase the accountability of the
officials responsible for administering the operational
aspects of such programs.
``(G) To increase oversight of institutions,
contractors, and third party servicers that participate
in the Federal student financial assistance programs
authorized under title IV.
``(H) To provide greater flexibility in the
management and administration of such programs.
``(I) To implement open, common, integrated systems
for the delivery of Federal student financial
assistance programs authorized under title IV.
``(J) To develop and maintain a student financial
assistance system that contains complete, accurate, and
timely data to ensure program integrity.
``(K) To increase transparency in the operations
and outcomes of Federal student financial assistance
programs authorized under title IV.'';
(2) in subsection (b)--
(A) in paragraph (1)--
(i) by redesignating subparagraphs (B) and
(C) as subparagraphs (C) and (D), respectively;
and
(ii) by inserting after subparagraph (A)
the following:
``(B) implement oversight and accountability
measures to ensure that the PBO carries out its duties
under this section efficiently, effectively, and in a
manner that accomplishes the purposes specified in
subsection (a)(2);'';
(B) in paragraph (2)(A)--
(i) by redesignating clauses (ii) through
(vi) as clauses (iii) through (vii);
(ii) by inserting after clause (i) the
following:
``(ii) in accordance with paragraph (3),
the collection, publication, and sharing of
longitudinal data that may be used to evaluate
Federal student financial assistance programs
authorized under title IV, including the
outcomes such programs achieve;''; and
(iii) in clause (vii), as so redesignated,
by inserting ``, including oversight of
institutions, contractors, and third party
servicers that participate in such programs''
after ``title IV'' ;
(C) by redesignating paragraphs (3) through (6) as
paragraphs (4) through (7), respectively; and
(D) by inserting after paragraph (2) the following:
``(3) Collection, sharing, and publication of data.--
``(A) Collection.--The PBO shall collect
longitudinal data, including student-level data, that
shall be used to evaluate Federal student financial
assistance programs authorized under title IV.
``(B) Sharing with nces.--The PBO shall make the
data collected under subparagraph (A) available to the
Commissioner of the National Center for Education
Statistics for purposes of research and policy
analysis.
``(C) Sharing with researchers.--The Commissioner
of the National Center for Education Statistics shall
make the data shared under subparagraph (B) available
to researchers for vetted research and evaluation
purposes. Data made available to researchers under this
subparagraph shall not include any data that would
reveal personally identifiable information.
``(D) Publication.--
``(i) In general.--Not less frequently than
once annually, and subject to clause (ii), the
PBO shall make the data collected under
subparagraph (A) available on a publicly
accessible website of the Department of
Education in a format that enables members of
the public to easily retrieve, sort, and
analyze the data.
``(ii) Privacy protections.--The data made
available under clause (i) shall not include--
``(I) student-level data; or
``(II) any data that would reveal
personally identifiable information
about an individual student.''.
(3) by amending subsection (c) to read as follows:
``(c) Performance Plan, Report, and Briefing.--
``(1) Performance plan.--
``(A) In general.--Not later than one year after
the date of the enactment of the Student Loan Advocacy
Act, and not less than once every five years
thereafter, the Secretary and Chief Operating Officer
shall agree on a performance plan for the PBO for the
succeeding 5 years that--
``(i) establishes measurable quantitative
and qualitative goals and objectives for the
organization; and
``(ii) aligns such goals and objectives
with the purposes specified in subsection
(a)(2).
``(B) Consultation.--In developing the five-year
performance plan and any revision to the plan, the
Secretary and the Chief Operating Officer shall consult
with students, institutions, Congress, contractors, the
Borrower Advocate, student aid experts, including
consumer advocacy and research groups, the Director of
the Bureau of Consumer Financial Protection, State
attorneys general, and other relevant parties.
``(C) Revisions.--The Secretary and Chief Operating
Officer may annually update the plan under paragraph
(1) to incorporate the recommendations made pursuant to
the consultation required under subparagraph (B) that
are accepted by the Secretary and the Chief Operating
Officer.
``(D) Areas.--The plan developed under subparagraph
(A) shall address the responsibilities of the PBO in
the following areas:
``(i) Improving service to students and
other participants in the Federal student
financial assistance programs authorized under
title IV, including making those programs more
understandable and accessible to students and
their parents.
``(ii) Managing the costs and increasing
the efficiency of such programs.
``(iii) Improving, integrating, and
investing in the systems that support such
programs.
``(iv) Developing open, common, and
integrated systems for such programs.
``(v) The collection, publication, and
sharing of data on such programs as described
in subsection (b)(3).
``(vi) Improving performance standards and
outcomes with respect to institutions,
contractors, and third party servicers that act
as agents of the Department or as agents of
institutions that participate in such programs.
``(vii) Any other areas identified by the
Secretary.
``(E) Public availability.--Each plan developed
under subparagraph (A) shall be made available on a
publicly accessible website of the Department of
Education.
``(2) Annual report.--
``(A) Report required.--Not later than one year
after the date of the enactment of the Student Loan
Advocacy Act and annually thereafter, the Secretary,
acting through the Chief Operating Officer, shall
submit to Congress an annual report on the performance
of the PBO.
``(B) Contents.--The annual report shall include
the following:
``(i) An evaluation of the extent to which
the PBO met the goals and objectives contained
in the five-year performance plan described in
paragraph (1) for the preceding year.
``(ii) A summary of the consultation
process under paragraph (1)(B) for the
preceding year, including the recommendations
that were accepted or denied by the Chief
Operating Officer during such year, and the
rationale for accepting or denying such
recommendations.
``(iii) An independent financial audit of
the expenditures of both the PBO and the
programs administered by the PBO.
``(iv) A summary of the actions taken by
the PBO to address--
``(I) the findings of the audit
described in clause (iii); and
``(II) consumer feedback.
``(v) Financial and performance
requirements applicable to the PBO under--
``(I) the Chief Financial Officers
Act of 1990 (Public Law 101-576); or
``(II) the Government Performance
and Results Act of 1993 (Public Law
103-62).
``(vi) The results achieved by the PBO
during the preceding year and whether such
results met the goals specified in the
performance plan under paragraph (1).
``(vii) With respect to the preceding year,
the evaluation rating of the performance of the
Chief Operating Officer and senior managers
under subsections (d)(5) and (e)(2), including
the amounts of bonus compensation awarded to
the Chief Operating Officer and senior
managers.
``(viii) Recommendations for legislative
and regulatory changes to improve service to
students and their families, and to improve the
efficiency and integrity of Federal student
financial assistance programs authorized under
title IV.
``(ix) Financial statements that provide a
rationale for appropriately funding the
activities of the PBO.
``(x) A summary of the management and
compliance of contractors managed by the PBO in
the preceding year, including corrective
actions taken by the PBO with respect to such
contractors.
``(xi) A description of how the PBO used
the authority under paragraph (5) of subsection
(b) for making personnel and procurement
decisions in the preceding year, including the
number of individuals hired through such
authority and the bonuses provided to staff
during such year.
``(xii) A summary of the oversight
activities of institutions, contractors, and
third party servicers that participate in the
Federal student financial assistance programs
authorized under title IV including--
``(I) fines levied on such
institutions, contractors, and third
party servicers, disaggregated by
entity;
``(II) instances of fraud or
misrepresentation by such institutions,
contractors, or third party servicers;
and
``(III) violations of provisions in
this Act by such institutions,
contractors, or third party servicers
disaggregated by entity and type of
violation.
``(xiii) A summary of any improvements made
with respect to transparency and any new types
of data made available in the preceding year.
``(xiv) A description of the progress made
in the preceding year towards the specific
measurable organization and individual goals
specified in subsection (d)(5)(A).
``(xv) The report submitted to the
Secretary under subsection (f)(7).
``(xvi) Other such information as the
Director of the Office of Management and Budget
shall prescribe for performance based
organizations.
``(3) Consultation with stakeholders.--The Chief Operating
Officer, in preparing the annual report described in paragraph
(2), shall establish appropriate means to consult with
students, borrowers, institutions, student aid experts,
including consumer advocacy and research groups, the Director
of the Bureau of Consumer Financial Protection, and others
involved in the delivery and evaluation of student aid under
title IV--
``(A) regarding the degree of satisfaction with the
delivery system; and
``(B) to seek suggestions on means to improve the
performance of the delivery system.
``(4) Briefing on enforcement of program integrity.--The
Secretary shall, at the request of the authorizing committees,
provide to the authorizing committees a briefing on the steps
the Department of Education has taken to ensure--
``(A) the experiences of students and borrowers are
accounted for in decision making; and
``(B) that contractors, lenders, and guaranty
agencies and third party servicers are adhering to the
requirements of title IV, the terms of any contract
with the Secretary, consumer protection laws, Federal
regulations and guidelines, and directives of the PBO.
``(5) Coordination with the director of the bureau of
consumer financial protection.--Not later than 180 days after
the date of the enactment of the Student Loan Advocacy Act, the
Secretary shall enter into a memorandum of understanding with
the Private Education Loan Ombudsman in accordance with section
1035(c)(2) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5535(c)(2)).''.
(4) in subsection (d)--
(A) in paragraph (1), by striking ``management
ability'' and all that follows through the period at
the end and inserting ``management ability, including
contractor management, expertise in the Federal student
financial assistance programs authorized under title
IV, experience with financial systems, and knowledge of
consumer financial protection laws, and without regard
to political affiliation or activity.'';
(B) by redesignating paragraphs (2) through (5) as
paragraphs (3) through (6);
(C) by inserting after paragraph (1) the following:
``(2) Restrictions.--
``(A) Preservice and in-service restrictions.--An
individual may not serve as the Chief Operating Officer
if such individual--
``(i) is employed by, or has a financial
interest in, an entity that contracts with the
PBO; or
``(ii) was employed by, or had a financial
interest in, any such entity in any of the five
years preceding the date of the individual's
appointment as the Chief Operating Officer.
``(B) Postservice restrictions.--An individual who
served as the Chief Operating Officer may not accept
employment with an entity that contracts with the PBO
until a period of five years has elapsed following the
date on which such individual's service as the Chief
Operating Officer terminated.'';
(D) in paragraph (5), as so redesignated--
(i) in subparagraph (A)--
(I) by inserting ``specific''
before ``measurable''; and
(II) by inserting ``and metrics
used to measure progress toward such
goals'' before the period; and
(ii) in subparagraph (B), by inserting ``on
the website of the Department'' before the
period; and
(E) in paragraph (6), as so redesignated, by
amending subparagraph (B) to read as follows:
``(B) Bonus authorized.--The Secretary may pay to
the Chief Operating Officer a bonus in an amount that
does not exceed 50 percent of such annual rate of basic
pay. The decision to pay such a bonus, and the amount
of the bonus, shall be based solely on the Secretary's
evaluation of the performance of the Chief Operating
Officer with respect to the goals set forth in the
performance agreement as described in paragraph
(5)(A).'';
(5) in subsection (e)(2), by striking ``organization and
individual goals'' and inserting ``specific, measurable
organization and individual goals and the metrics used to
measure progress toward such goals. Performance agreements for
senior management responsible for procurement shall include
metrics that measure ability to oversee contractors.'';
(6) by amending subsection (f) to read as follows:
``(f) Borrower Advocate.--
``(1) In general.--There is established in the PBO an
`Office of the Borrower Advocate' (referred to in this
subsection as the `Office'). The function of the Office shall
be to provide timely assistance to borrowers of loans made,
insured, or guaranteed under title IV by performing the duties
described in paragraph (6).
``(2) Head of office.--There shall be an official known as
the `Borrower Advocate' who shall serve as the head of the
Office. The Borrower Advocate shall be appointed by the
Secretary from among individuals who have worked closely with
the Federal student loan programs authorized under title IV.
``(3) Removal.--The Borrower Advocate may be removed only
by the Secretary who shall communicate the reasons for any such
removal to the authorizing committees.
``(4) Restrictions.--
``(A) Preservice and in-service restrictions.--An
individual may not serve as the Borrower Advocate if
such individual--
``(i) is employed by, or has a financial
interest in, an entity that contracts with the
PBO; or
``(ii) was employed by, or had a financial
interest in, any such entity in any of the five
years preceding the date of the individual's
appointment as the Borrower Advocate.
``(B) Postservice restrictions.--An individual who
served as the Borrower Advocate may not accept
employment with an entity that contracts with the PBO
until a period of five years has elapsed following the
date on which such individual's service as the Borrower
Advocate terminated.
``(5) Staff.--The Office shall be staffed sufficiently to
carry out the responsibilities of the Office under this
subsection.
``(6) Duties of the borrower advocate.--The Office of the
Borrower Advocate shall--
``(A) assist borrowers of loans made, insured, or
guaranteed under title IV in resolving problems with
the PBO and its contractors or other agents, including
by--
``(i) receiving and reviewing complaints of
such problems from borrowers;
``(ii) working to resolve such complaints
in a manner that is in the best interests of
borrowers; and
``(iii) transmitting such complaints to
States and recognized accrediting agencies or
associations, as appropriate;
``(B) attempt to resolve complaints within the
Department of Education and with institutions of higher
education, lenders, guaranty agencies, loan servicers,
and other participants in the Federal student loan
programs authorized under title IV in a manner that
will improve the experience of the borrower;
``(C) compile and analyze data on borrower
complaints and share such data with the Director of the
Bureau of Consumer Financial Protection;
``(D) publish, with any personally identifiable
information redacted, such complaints and responses of
the Secretary to such complaints on the website of the
Department; and
``(E) make appropriate recommendations to Congress,
the Chief Operating Officer, and Secretary with respect
to Federal student loan programs authorized under title
IV and the experiences of borrowers in repayment of
loans under such programs.
``(7) Public information.--The Chief Operating Officer
shall establish and maintain a public page on the website of
the Department of Education exclusively to provide members of
the public with information about the role of the PBO with
respect to the oversight of institutions of higher education,
lenders, guaranty agencies, contractors that contract with the
PBO, subcontractors of such contractors, and third party
servicers.
``(8) Report.--On an annual basis, the Borrower Advocate
shall submit to the Chief Operating Officer a report on the
activities of the Office during the preceding year that--
``(A) identifies the activities carried out by the
Borrower Advocate;
``(B) summarizes the complaints received from
borrowers, including the number of such complaints, and
explains the activities undertaken by the PBO to
address such complaints;
``(C) proposes changes in the administrative
practices of the PBO to mitigate problems experienced
by borrowers; and
``(D) identifies potential legislative changes
which may be appropriate to mitigate such problems.'';
(7) by redesignating subsection (i) as subsection (j); and
(8) by inserting after subsection (h) the following:
``(i) Third Party Servicer Defined.--In this section, the term
`third party servicer' has the meaning given that term in section
481(c).''.
(b) Definition of Third-Party Servicer.--Section 481(c) of the
Higher Education Act of 1965 (20 U.S.C. 1088(c)) is amended--
(1) in the matter preceding paragraph (1), by striking
``contract'' and inserting ``contract or other agreement,
including a revenue sharing arrangement,''; and
(2) in paragraph (1), by striking ``, through either manual
or automated processing, any aspect of such institution's
student assistance programs'' and inserting ``services on
behalf of the institution receiving student assistance funds''.
(c) Conforming Amendments.--
(1) Section 433(b)(13) of the Higher Education Act of 1965
(20 U.S.C. 1083(b)(13)) is amended by striking ``Student Loan
Ombudsman'' and inserting ``Borrower Advocate''.
(2) Section 433(e)(3)(E) of the Higher Education Act of
1965 (20 U.S.C. 1083(e)(3)(E)) is amended by striking ``Student
Loan Ombudsman'' and inserting ``Borrower Advocate''.
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