Sec. 453. Plain language disclosure form
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Section 455(p) ( 20 U.S.C. 1087e(p) ) is amended to read as follows: The Secretary shall, with respect to loans under this part and in accordance with such regulations as the Secretary shall prescribe, comply with each of the requirements under section 433 that apply to a lender with respect to a loan under part B. Not later than 24 months after the date of the enactment of this paragraph, the Secretary shall, based on consumer testing, develop and issue a model form to be known as the Plain Language Disclosure Form that shall be used by the Secretary to comply with paragraph (1).
The Secretary shall ensure that the Plain Language Disclosure Form— enables borrowers to easily identify the information required to be disclosed under section 433(a) with respect to a loan, with emphasis on the loan terms determined by the Secretary, based on consumer testing, to be critical to understanding the total costs of the loan and the estimated monthly repayment; has a clear format and design, including easily readable font; and is as succinct as practicable. In developing Plain Language Disclosure Form, the Secretary shall, as appropriate, consult with— the Federal Reserve Board; borrowers of loans under this part; and other organizations involved in the provision of financial assistance to students, as identified by the Secretary.
In carrying out paragraph (2), Secretary shall develop and implement an electronic system to generate a Plain Language Disclosure Form for each borrower that includes personalized information about the borrower and the borrower’s loans. Nothing in this subsection shall be construed to create a private right of action against the Secretary with respect to the form or electronic system developed under this paragraph. Beginning after the issuance of the Plain Language Disclosure Form by the Secretary under paragraph (2), a loan may not be issued to a borrower under this part unless the borrower acknowledges to the Secretary, in writing (which may include an electronic signature), that the borrower has read the Plain Language Disclosure Form for the loan concerned.
In this subsection, the term consumer testing means the solicitation of feedback from individuals, including borrowers and prospective borrowers of loans under this part (as determined by the Secretary), about the usefulness of different methods of disclosing material terms of loans on the Plain Language Disclosure Form to maximize borrowers’ understanding of the terms and conditions of such loans. . Not later than 3 years after the date of the enactment of this Act, the Secretary of Education shall submit to Congress a report that includes a description of the methods and procedures used to develop the Plain Language Disclosure Form required under section 455(p)(2) of the Higher Education Act of 1965 (as added by subsection
(a)of this section).
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Sec. 453
Plain language disclosure form
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