WASHINGTON—As American students and families face staggering student loan debt, U.S. Sen. Ron Johnson (R-Wis.) along with Sens. Joni Ernst (R-Iowa) and Chuck Grassley (R-Iowa) are proposing a new measure that would pull back the curtain and give prospective students a clear estimate of the costs they would owe years down the road before they take out a loan.
The senators’ bill—the Student Transparency for Understanding Decisions in Education Net Terms, or STUDENT, Act—would provide student loan applicants with an estimate of the total amount of interest they would pay, based on a standard 10 year repayment plan, during or prior to accepting a loan.
“With the current outstanding federal student loan debt at $1.61 trillion with 43 million borrowers, students borrowing to pay for college should be fully aware of the financial obligations they are taking on. Making student loan information more transparent is an important step in helping students make responsible borrowing decisions and understand the long-term costs of student loans. I am proud to introduce the STUDENT Act to shine a light on the true cost of education and give students a fair shake to not start their career with hundreds of thousands of dollars of debt hanging over them,” said Sen. Johnson.
As chairman of the Senate Committee on Homeland Security and Governmental Affairs, Senator Johnson held a committee hearing to expose the U.S. Department of Education’s effects on higher education and students. His committee heard witness testimony from both government and outside experts. All agreed that the federal government’s role in higher education must be reformed.
In 2017, Sen. Johnson introduced the bipartisan Empowering Student Borrowers Act to help students understand the financial implications of student loans and educational debt. The legislation required colleges and universities to send a letter to students every year detailing each student’s total loan debt, projected monthly repayment amounts, and the estimated interest rate for each loan. A Wisconsin state law went into effect for the 2017-2018 academic year requiring universities to send these annual letters to students.
The bill can be found here.