NAICU Washington Update

Bill Would Call for Additional Counseling on Private Loans

April 09, 2012

Senators Dick Durbin (D-Ill.) and Tom Harkin (D-Iowa) have introduced legislation that would require colleges to provide additional counseling to students on terms and conditions of private student loans.  

According to a news release from Durbin's office, the Know Before You Owe Act of 2012 (S.2280) also would require colleges to confirm the student's enrollment status, cost of attendance, and estimated federal financial aid before a private loan would be approved. Private lending institutions would likewise be required to obtain such information.

Durbin has been concerned about the debt burden of college students and that fact that private student loans are not dischargeable through bankruptcy. (See March 23 Washington Update story.)  The bill, introduced March 29, would amend the Truth in Lending Act and the Higher Education Act of 1965, and would be considered by the Senate Banking, Housing, and Urban Affairs.

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