S.2459 - Know Before You Owe Federal Student Loan Act of 2014113th Congress (2013-2014)
|Sponsor:||Sen. Grassley, Chuck [R-IA] (Introduced 06/10/2014)|
|Committees:||Senate - Health, Education, Labor, and Pensions|
|Latest Action:||06/11/2014 Sponsor introductory remarks on measure. (CR S3596-3597) (All Actions)|
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Summary: S.2459 — 113th Congress (2013-2014)All Bill Information (Except Text)
Introduced in Senate (06/10/2014)
Know Before You Owe Federal Student Loan Act of 2014 - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require institutions of higher education (IHEs) to provide pre-loan counseling at or prior to the first disbursement of a new loan to a student borrower under the William D. Ford Federal Direct Loan program. (Currently, such counseling is limited to students who are first-time borrowers of such loans.)
Adds to the information to be provided to students as part of such counseling:
- an estimate of their projected loan debt-to-income ratio upon graduation and their estimated total student loan debt, calculated for their particular program of study;
- a statement that they should borrow the minimum amount necessary to cover expenses;
- information about the default risk of having a projected loan debt-to-income ratio greater than 12%;
- options for reducing borrowing through scholarships, reduced expenses, work-study, or other work opportunities; and
- an explanation of the importance of graduating on time and of how adding an additional year of study impacts total indebtedness.
Requires each IHE, prior to certifying a Federal Direct Loan for disbursement to a student borrower, to ensure that the student manually enters, either in writing or through electronic means, the exact dollar amount of such loan that the student desires to borrow.