House Passes Bipartisan Financial Aid Counseling Legislation

September 11, 2018

The U.S. House of Representatives has once again passed legislation to require additional financial counseling for federal student loan borrowers. The Empowering Students Through Enhanced Financial Counseling Act passed the House 406-4. Nearly identical legislation passed the House in 2014 and 2016. It is unlikely that the Senate will consider the legislation before the 115th Congress expires in January 2019.
Currently, federal student loan borrowers are required to participate in entrance counseling when enrolling in college. The Empowering Students Through Enhanced Financial Counseling Act, however, would require students to annually participate in counseling as a prerequisite for receiving their next installment of federal student loans.
The bill would also expand the universe of affected federal student aid recipients who are required to participate in loan counseling to include students who receive Pell Grants and students whose parents receive Parent PLUS Loans.  Pell and Parent PLUS recipients are not currently required to undergo such counseling. The bill also adds new information to exit loan counseling, including additional disclosures and explanations related to the terms of conditions of loan repayment, and requires the federal government to conduct a study on the effectiveness of such loan counseling programs before the expiration of the 115th Congress.
The full House of Representatives has not considered the comprehensive Republican HEA reauthorization legislation, the PROSPER Act, and the timing of the loan counseling legislation could indicate a desire to advance some higher education legislation before the expiration of the 115th Congress in the absence of support for a full reauthorization.

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