"Many students don't have a full understanding of the terms of student loans, the available repayment plants, or the consequences of default," Congresswoman Bonamici said. "Current law requires counseling at the beginning and end of college, and students often receive the counseling after their loans have been disbursed. The Empowering Students through Enhanced Financial Counseling Act requires annual loan counseling before students sign a promissory note, giving them a better understanding of the costs they're incurring. The bill also ensures that students receive personalized information each year about the amount they've borrowed, how much interest will accrue, and what they can expect their monthly payments to be after they leave college. Providing more transparency regarding these crucial details will help students plan their road to repayment."
The bill also requires financial counseling for all Pell Grant recipients so they understand their rights and the circumstances in which they are required to repay. Additionally, all financial counseling under the bill must be consumer-tested to make sure it's delivered in a format that's understandable to students.
More than 40 million Americans are carrying roughly
"This bill is good policy because it improves transparency for borrowers, but we must ultimately address the increasing cost of college so that students are not saddled with more and more student loan debt," Congresswoman Bonamici said. "Students should have an opportunity to pursue higher education, but they should also understand their rights and obligations if they have student loans or Pell Grants. The tools in this bill will help prepare students to navigate the financial aid process and make informed decisions for their future."
The bill passed the House 405-11.
Watch Congresswoman Bonamici's remarks here: https://www.youtube.com/watch?v=od3CjrHr8vw&feature=youtu.be
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