Student Loan Transparency: Mandatory Counseling and Quarterly Debt Reports.
This act mandates enhanced pre-loan counseling for federal student loan borrowers, requiring institutions to provide realistic debt-to-income ratio estimates based on expected starting wages. Students must now manually certify the exact dollar amount they wish to borrow, preventing automatic acceptance of the maximum eligible amount. Furthermore, borrowers will receive quarterly statements detailing accrued interest during periods when payments are not required, increasing awareness of rising debt costs.
Key points
Realistic Financial Forecasts: Before borrowing, you will receive an estimate of your monthly payment compared to your projected income after taxes and living expenses, factoring in all your student debt.
Active Loan Amount Selection: You must manually enter the exact dollar amount you want to borrow, encouraging students to take only the minimum necessary funds.
Quarterly Interest Statements: You will receive statements every three months detailing accrued interest during periods of non-payment, along with a clear warning about interest capitalization.
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