Know Before You Owe Federal Student Loan Act of 2023

Summary

Know Before You Owe Federal Student Loan Act of 2023 This bill expands lender disclosure requirements and revises loan counseling requirements. First, the bill requires a lender to provide a quarterly statement to a Federal Family Education Loan or Direct Loan borrower during a period when loan payments are not required. The statement must include specified information on the loan and interest amounts and explain the option to pay accrued interest while in deferment or forbearance. In addition, the bill requires an institution of higher education (IHE) that participates in federal student-aid programs to provide pre-loan counseling to a student borrower of a federal student loan upon or prior to the first disbursement of each new loan. Currently, an IHE must provide one-time entrance counseling to a student who is a first-time federal student loan borrower. The bill also revises and expands required elements of pre-loan counseling to include an estimate of the borrower's monthly payment amount compared to the borrower's estimated monthly income after taxes and other expenses, a statement to borrow the minimum necessary amount, a warning that a high debt-to-income ratio makes repayment more difficult, options to reduce borrowing, and an explanation of the importance of on-time graduation. Prior to certifying a Federal Direct Loan disbursement to a student, an IHE must ensure that the student manually enters the exact dollar amount of the loan.

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Timeline

1. 27 February 2023

   Introduced

   Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

   Source: IntroReferral

2. 27 February 2023

   Introduced

   Introduced in Senate

   Source: IntroReferral

Votes

No vote records are attached yet.

Versions

• Introduced in Senate · 27 February 2023 · Official file

Documents

3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 27 February 2023

  ViewDownloadOpen at official source

• Introduced in Senate (PDF)

  Introduced in Senate · EN · 27 February 2023

  ViewDownloadOpen at official source

• Introduced in Senate

  summary · EN · 27 February 2023

  Open at official source

Sponsors

• Chuck Grassley · R · Sponsor
• Sen. Smith, Tina [D-MN] · D · Sponsor
• · sshr00 · Standing

Related records

• related to ← Know Before You Owe Federal Student Loan Act of 2023
• related to ← Know Before You Owe Federal Student Loan Act of 2021