Student Loan Transparency: Clearer Information for Borrowers
This act introduces new rules for informing students about their federal loans. It ensures students receive clear, understandable data on loan costs, including interest and total repayment amounts, both before disbursement and monthly throughout the loan's life. The goal is to help borrowers better understand their financial obligations and avoid unexpected costs.
Key points
Before loan disbursement, you will receive detailed information on the principal amount, interest rate, number of payments, and estimated total amount to repay.
Monthly statements will provide data on all your loans, including current balance, accrued interest, and payments made to date.
Statements will include reminders about changing repayment plans and explanations of interest capitalization and the benefits of early payments.
The act requires consumer testing to ensure the new disclosures are useful and understandable for borrowers.
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