Congressman Ben McAdams joins Florida Congresswoman Donna Shalala and Utah Congressman Chris Stewart on a measure that requires more transparency and disclosure for students who take out federal college loans—across the entire life of the loan. McAdams has signed on to the bipartisan Student Loan Disclosure Transparency Act of 2019 (H.R. 4193).
McAdams said that as of June, the total amount of student loan debt is approximately $1.6 trillion. During the 2018-2019 school year, the average college senior who borrowed, graduated with more than $30,000 in loans.
“Students borrow to invest in their education and improve their economic future, not to end up with crushing debt. We can do a better job of helping students understand what they are taking on over the life of the loan, not just when they receive the money or start repaying it,” said McAdams.
McAdams says the legislation seeks to correct concerns about current student loan disclosures that are unnecessarily long, difficult to read and fail to accurately inform borrowers of the amount they’ll have to pay. The Student Loan Disclosure Transparency Act includes the following requirements:
Simplified disclosures in easy and understandable terms. Two-thirds of borrowers express some misunderstanding or surprise about their student loan disclosures.
Regular monthly disclosures during the life of a loan. Under current law, a borrower is only required to receive a disclosure at three points: disbursement, at or prior to repayment, and during repayment status.
Projected payments based on the amount borrowed. Included in the monthly disclosures would be projected monthly payments based on how much a student has borrowed with an option to pay any interest that accrues while a borrower is still in school.
“This is a commonsense bill that provides for standards of disclosure that apply to other consumer loans and certainly should apply to the very first consumer loan many people take—their student loan,” said McAdams.