Amendments to the Higher Education Act of 1965

The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended as follows: (1) Section 487(d)(1)(D) (20 U.S.C. 1094(d)(1)(D)) is amended— (A) in clause (ii), by striking and at the end; (B) in clause (iii), by inserting and after the semicolon; and (C) by adding at the end the following: (iv) in the case of an OBF product (as such term is defined in subsection (h) of section 140 of the Truth in Lending Act (15 U.S.C. 1650(h))) made by a proprietary institution of higher education, only the amount of OBF payments (as defined in such subsection) received during the applicable institutional fiscal year, to the extent the amount of such payments on the OBF product does not exceed the amount financed under such OBF product;. (2) Section 153(a) (20 U.S.C. 1019b(a)) is amended— (A) in paragraph (1), by adding at the end the following: (C) Additional information for OBF products (i) In general By not later than 180 days after the date of enactment of the Outcomes-Based Financing (OBF) for Students Act, the Secretary, in coordination with the Bureau of Consumer Financial Protection, shall determine the minimum information that OBF providers, covered institutions, and institution-affiliated organizations of such covered institutions, participating in preferred lender arrangements shall make available regarding OBF products. (ii) Consultation and content of minimum disclosures In carrying out clause (i), 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, and OBF providers; (II) include, in the minimum information under clause (i) that is required to be made available, the information required to be disclosed under section 128(e)(12) of the Truth in Lending Act (15 U.S.C. 1638(e)(12)); 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 prospective OBF recipients and the families of such recipients the following information for each type of OBF product offered pursuant to such preferred lender arrangement: (aa) The terms and conditions of the OBF product for the next award year. (bb) An itemization of the fees or range of fees required to obtain the OBF product. (cc) The annual or aggregate maximum financed amounts. (dd) The average financed amounts provided by the OBF provider to students who— (AA) graduated from such institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable; and (BB) obtained an OBF product of such type from the OBF provider for the preceding year. (ee) The consequences for the OBF recipient for defaulting on an OBF product. (ff) Contact information for the OBF provider. (gg) Other information suggested by the persons and entities with whom the Secretary has consulted under subclause (I). (iii) Definitions In this subparagraph the terms OBF product and OBF provider have the meanings given such terms in subsection (h) of section 140 of the Truth in Lending Act (15 U.S.C. 1650(h)).; and (B) in paragraph (2)— (i) in subparagraph (A)(ii), by striking the and inserting a before model disclosure form; (ii) in subparagraph (B)— (I) in the matter preceding clause (i)— (aa) by striking a before model disclosure; and (bb) by striking form that and inserting forms that; and (II) in clause (ii), by inserting (or in the case of an OBF product (as defined in subsection (h) of section 140 of the Truth in Lending Act (15 U.S.C. 1650(h)), sections 128(e)(12)(A) and 105(k) of such Act) after section 128(e); and (iii) in subparagraph (C), by striking form and inserting forms. (3) Section 154 (20 U.S.C. 1019c) is amended— (A) in subsection (a), by striking development of the and inserting development of a; and (B) in subsection (b)(2)— (i) by inserting one of before the model disclosure; and (ii) by striking form developed and inserting forms developed.