House Passes Guthrie, Bonamici Student Loan Bill
WASHINGTON, D.C. – Today the U.S. House of Representatives passed Congressman Brett Guthrie’s (KY-02) and Congresswoman Suzanne Bonamici’s (OR-01) bill, the Empowering Students through Enhanced Financial Counseling Act (H.R. 1635) by a vote of 406 to 4.
The Empowering Students through Enhanced Financial Counseling Act improves the timing, frequency, and content of financial aid counseling for college students. This bill would require counseling before accepting federal student loans and would then require annual financial counseling while a student remains enrolled. The bill would also enhance the quality of the counseling so that students have a better understanding of what taking on student loans means for their future financial obligations. Importantly, the bill requires that borrowers get information about income-driven repayment programs.
“Student loan debt has surged to more than $1.4 trillion nationally, surpassing both auto loan debt and credit card debt,” said Guthrie. “The Empowering Students through Enhanced Financial Counseling Act will help students better grasp the amount of loans they are taking out and their responsibility in repaying the loans after school. Unfortunately, many students enter into binding loan contracts without fully appreciating the gravity of the financial decision they are making and the consequences it can have on their futures. By requiring annual counseling, students will be able to make better-informed decisions about their loans – saving themselves and taxpayers money. I want to thank Congresswoman Bonamici for working with me on this important issue, and I urge the Senate to pass it as soon as possible.”
“For many borrowers, student loan debt affects the ability to buy a home, purchase a new car, afford childcare, or access capital to start a small business,” said Bonamici. “One of the frustrations I’ve heard from student loan borrowers in Oregon is that they didn’t understand the jumble of complex terms in their loan agreement or the differences between federal and private student loans. The Empowering Students through Enhanced Financial Counseling Act will help current and future students understand their rights and obligations as borrowers and grant recipients so they can make informed decisions now for the years ahead. I appreciate Congressman Guthrie’s partnership in taking this important step to protect students and borrowers. The Senate should act on this legislation quickly so students can benefit from the protections it offers.”
Specifically, the Empowering Students through Enhanced Financial Counseling Act:
- Requires that students and parent borrowers who participate in federal loan programs receive individualized counseling each year.
- Provides awareness about the financial obligations students and parents are accumulating by requiring borrowers to consent each year before receiving further federal student loans.
- Informs students about the terms, conditions and obligations of the Pell Grant program through annual counseling that will be provided to all grant recipients.
- Directs the Secretary of Education to maintain and disseminate a consumer-tested, online counseling tool institutions can use to provide annual counseling.