Know Before You Owe Federal Student Loan Act of 2014

Summary

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.

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3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 10 June 2014

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• Introduced in Senate (PDF)

  Introduced in Senate · EN · 10 June 2014

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• Introduced in Senate

  summary · EN · 10 June 2014

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