U.S. Rep. Randy Feenstra (R-IA) and U.S. Sens. Joni Ernst (R-IA) and Chuck Grassley (R-IA) introduced Monday the Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act to provide clarity to student loan applicants regarding interest they would pay during or before accepting a loan.
The legislation noted the interest is based on a standard 10-year repayment plan and would aid aspiring college students in understanding the full cost and implications of taking out student loans.
“When students consider the total cost of a college degree, interest payments on student loans should be a transparent component of their financial calculations,” said Feenstra. “The STUDENT Act provides students with the information they need to make sound financial decisions when it comes to their education. As a father of four, these are the commonsense tools that every family should have at their disposal when considering the full cost of college.”
Current law does not require the disclosure of the total interest amount a student loan applicant would pay based on the applicable repayment plan, resulting in many students not being aware of the actual amount they will end up paying over the course of a loan.