H.R. 6134: Student Transparency for Understanding Decisions in Education Net Terms Act

This bill, known as the Student Transparency for Understanding Decisions in Education Net Terms Act (or the STUDENT Act), aims to enhance the transparency of federal student loans by requiring additional disclosure of loan costs. Specifically, the key provisions of the bill are:

Interest Disclosure Requirement

The bill proposes an amendment to the Higher Education Act of 1965, focusing on the disclosure of information regarding federal student loans. It mandates that when students or borrowers receive information about federal loans, they must also be informed about:

• The total amount of interest that will be paid over the entire life of the loan.

The bill specifies that this information should be calculated using the standard repayment plan that corresponds with the total principal amount of loans that the borrower has taken out.

Purpose and Impact

The primary goal of the STUDENT Act is to ensure that borrowers have a clearer understanding of the financial implications of taking out student loans. By knowing how much interest they will pay over time, students can make more informed decisions regarding their borrowing options and repayment plans.

Implementation

Once enacted, schools and loan servicers would be required to include this interest information in the disclosures they provide to students as part of the loan process. This aims to promote transparency and potentially lead to more responsible borrowing among students.

Relevant Companies

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