A bipartisan coalition of senators introduced legislation this week that would offer financial counseling services for students who receive federal financial aid.
The Empowering Students Through Enhanced Financial Counseling Act – sponsored by Sens. Dean Heller (R-NV), Mark Warner (D-VA), Tim Kaine (D-VA), and Cory Gardner (R-CO) – is designed to promote financial literacy and help students make better financial choices.
“This legislation empowers Nevada’s students and Americans throughout the country with the tools needed to make well-informed, sound financial decisions related to their college and education,” Heller said. “It’s a positive step toward addressing student debt and preparing young students for a successful future, and I encourage my colleagues to support it.”
Student loan debt is the leading source of non-housing debt in the country as Americans owe more than $1.45 trillion in student loan debt.
“More than 60 percent of Virginia’s college students will graduate with some form of student loan debt, and average debt in the Commonwealth tops $29,000 per graduate. I would not have had the opportunity to be so successful in business had I graduated with such a financial burden,” Warner said. “We would be empowering students to make smarter choices about their financial future. This legislation aims to provide a full picture on the loans they are receiving, allowing them to take full advantage of the opportunities available to them.”
The bill ensures that student borrowers – and their parents – who get a federal loan receive annual financial counseling, which they must consent to as a condition of getting the loan.
consent each year before receiving federal student loans.
“Too many families in Virginia are weighed down by massive student loan debt, sometimes because they lacked services and information that could’ve helped them make a better-informed decision on a loan,” Kaine said. “I’m proud to once again join Senators Warner, Gardner and Heller on this simple but important bill that makes it easier for students and families to access financial counseling.”
A recent survey of students with debt found that more than 40 percent could not recall having received financial counseling. Many students graduate not knowing how to manage their loans.
“Access to financial counseling will help students who receive federal financial aid better understand the process before undertaking massive student loan debt,” Gardner said. “A high-quality education provides students with the tools they need to succeed, and financial literacy is an essential component to achieving that success. This bipartisan proposal will help tens of thousands of students better plan for their future.”