Bill > S1559

This bill, known as the "Know Before You Owe Federal Student Loan Act of 2025", aims to enhance student loan counseling and transparency by implementing several key provisions. The bill requires educational institutions to provide more comprehensive pre-loan counseling for students, including detailed estimates of monthly loan payments relative to potential income, living expenses, and other financial obligations. Borrowers must now manually confirm the exact dollar amount of loans they wish to borrow, ensuring a more deliberate borrowing process. Additionally, during periods when loan payments are not required (such as while in school or during deferment), lenders must provide quarterly statements that include detailed loan information, such as original principal amounts, current balances, interest rates, total payments made, and explanations about interest accrual. The bill emphasizes the importance of borrowing minimal amounts necessary, understanding potential repayment challenges, and exploring alternatives like scholarships and work opportunities. It also highlights the financial benefits of graduating on time and making even small voluntary payments during non-repayment periods to reduce long-term interest accumulation. These changes are intended to help students make more informed decisions about student loans and better understand their financial obligations.

Health and Social Services

https://www.congress.gov/bill/119th-congress/senate-bill/1559/all-info