Des Moines Sun

Senators Chuck Grassley and Joni Ernst have reintroduced bipartisan legislation aimed at improving transparency for students and families considering federal student loans. The Student Transparency for Understanding Decisions in Education Net Terms (STUDENT) Act would require that prospective borrowers receive a clear estimate of the total interest they would owe based on their loan’s outstanding principal.

“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.

Steve McCullough, President and CEO of Iowa Student Loan Liquidity Corporation, added: "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.”

The STUDENT Act has also gained support from Senators Amy Klobuchar, Tim Kaine, and Maggie Hassan.

Under current law, applicants are not required to be told how much interest they will pay over a loan’s lifetime based on their chosen repayment plan. The proposed act seeks to address this by making such disclosures mandatory before or during the borrowing process.

Grassley has put forward several related bills focused on helping families navigate higher education costs. These include efforts to improve access to net price calculators for early estimates of expenses and aid; establishing universal financial aid award letters for easier comparison between schools; and requiring annual counseling about likely loan costs relative to income before disbursement of new student loans.