WASHINGTON, D.C.—Today, U.S. Rep. Randy Feenstra (R-Hull) introduced legislation to help aspiring college students understand the full cost and implications of taking out student loans. The Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act would provide student loan applicants with an estimate of the total amount of interest they would pay – based on a standard 10-year repayment plan – during or prior to accepting a loan.
Senators Joni Ernst (R-IA) and Chuck Grassley (R-IA) have introduced companion legislation in the U.S. Senate.
“When students consider the total cost of a college degree, interest payments on student loans should be a transparent component of their financial calculations,” said Rep. Feenstra. “The STUDENT Act provides students with the information they need to make sound financial decisions when it comes to their education. As a father of four, these are the commonsense tools that every family should have at their disposal when considering the full cost of college.”
“Students and their families should have a clear picture about the true costs associated with their loans so they can fully understand how they’ll impact their future,” said Senator Ernst. “Instead of unfairly shifting the costs of these loans onto the vast majority of Americans who didn’t take on debt, as President Biden and the Democrats want to do, let’s give our students and their families the tools to know what the real deal is with their federal student loans with this commonsense legislation that will help them make informed decisions. Thank you to my friend and colleague Congressman Feenstra for leading this effort in the House.”
“As the cost of college continues to skyrocket, I frequently hear from Iowa students surprised by the amount they owe and concerned about paying back their loans. Our STUDENT Act, along with several other bills I’ve introduced like the Know Before You Owe Student Loan Act, would help shine a light on the true costs students and their families face before they begin borrowing money. This transparency would also help students shop around and fully factor in the cost of college, letting the free market bring down the price of higher education. I’ll continue working with my colleagues on making higher education loans more transparent to empower our students to succeed,” said Senator Grassley.
Current law does not require the disclosure of the total interest amount that a student loan applicant would pay based on the applicable repayment plan. As a result, many students are not aware of the actual amount they will end up paying over the life of a loan. The STUDENT Act makes the disclosure of the total interest amount required during or before an applicant takes out a loan.
You can find the bill text HERE.
(contributed press release)
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