Increased Awareness Before Taking Federal Student Loans
New regulations aim to better inform students about federal loans. Before taking out each new loan, students will receive detailed information about costs and potential consequences, and will also have to manually confirm the amount they wish to borrow. Additionally, during periods when repayment is not required, borrowers will receive quarterly statements to better track their debt and accruing interest.
Key points
Mandatory, expanded pre-loan counseling for each new student loan, including estimated monthly payments relative to after-tax income and living expenses.
Requirement for students to manually enter the exact dollar amount of the loan they wish to borrow, instead of automatically accepting the full available amount.
Quarterly statements for borrowers, even when not required to make payments, providing information on balance, interest, and early repayment options to avoid debt accumulation.
Expired
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