Grassley, Ernst, Colleagues Reintroduce Bipartisan Legislation to Give Students Clear Estimate of College Costs

Grassley, Ernst, Colleagues Reintroduce Bipartisan Legislation to Give Students Clear Estimate of College Costs

WASHINGTON - Sens. Chuck Grassley (R-Iowa) and Joni Ernst (R-Iowa) reintroduced bipartisan legislation to provide more transparency to students and families before taking out a federal loan. The Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act increases transparency by giving prospective students and families a clear estimate of the total amount of interest they would owe based on the outstanding principal of all the students' loans.

"As college students return to school, many are overwhelmed watching interest pile up on loans they never understood in the first place. Our STUDENT Act, along with other legislation I've introduced, shines a light on the true costs that students and families face. By increasing transparency, our legislation helps students make more informed decisions and empowers them to succeed," Grassley said.

"The only time students should be given a cheat sheet is to reveal the true cost of college tuition. My bipartisan bill will pull back the curtain and give our students and their families the tools they need to make the best decisions for their financial future," Ernst said.

"Students make better choices when you have the information necessary to do so. They need to understand the impact of the interest they will be charged, and this bill provides this vital information," President and CEO of Iowa Student Loan Liquidity Corporation Steve McCullough said.

Additional cosponsors include Sens. Amy Klobuchar (D-Minn.), Tim Kaine (D-Va.) and Maggie Hassan (D-N.H.).

Text of the legislation can be found HERE.

Background:

Current law does not require the disclosure of the total interest amount that a student loan applicant would pay based on the applicable repayment plan. As a result, many students are not aware of the actual amount they will end up paying over the life of a loan. The STUDENT Act makes the disclosure of the total interest amount required during or before an applicant takes out a loan.

Grassley has introduced several bipartisan bills to help provide students and their families with better information about the costs of college, including:

1. The Net Price Calculator Improvement Act - improves the effectiveness of and access to tools that provide students with early, individualized estimates of higher education costs and financial aid before they decide where to apply.
2. The Understanding the True Cost of College Act - creates a universal financial aid award letter so that students could easily compare financial aid packages between schools.
3. The Know Before You Owe Federal Student Loan Act - makes counseling about the likely cost of loans compared to income an annual requirement before new student loans are disbursed.

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