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Student Loan Disclosure Transparency Act of 2023
1/23/2024, 8:15 AM
Summary of Bill HR 1371
Specifically, the bill requires that institutions provide students with information about the total amount of their loan, the interest rate, the monthly payment amount, and the total amount that will be repaid over the life of the loan. This information must be provided to students before they take out the loan, as well as annually while they are in school and after they graduate.
Additionally, the bill requires that institutions provide students with information about alternative financing options, such as scholarships, grants, and work-study programs. This is intended to help students make more informed decisions about how to finance their education. Overall, the Student Loan Disclosure Transparency Act of 2023 aims to empower students to make more informed decisions about their education financing options and to help them avoid taking on more debt than they can afford.
Congressional Summary of HR 1371
Student Loan Disclosure Transparency Act of 2023
This bill requires lenders disbursing federal student loans to disclose additional information to borrowers and increase the frequency of such disclosures.
Specifically, prior to disbursement, the lender making a loan must disclose (1) the principal amount, interest rate, and number of required monthly payments to be made on the loan; (2) the estimated balance owed by the borrower; and (3) the estimated aggregate amount the borrower will pay.
Prior to repayment, the lender must disclose the projected total of interest charges that the borrower will pay on the loan, as well as projections of the borrower's monthly repayment amount.
The bill also requires certain disclosures for the life of the loan. In particular, lenders must disclose information about loans on a monthly, rather than periodic, basis. Lenders must also provide borrowers who are not in a repayment status (e.g., a borrower who is in school or in a deferment period) with a monthly statement.
The Department of Education must obtain feedback from borrowers and report on the usefulness and effectiveness of such disclosures.
