House Passes Bill Requiring Annual Counseling for Student Loan Borrowers
With this bill, “students and parents enrolled in federal loan programs will receive yearly counseling tailored to their needs,” said House Speaker Ryan.
The full House on Wednesday afternoon passed the Empowering Students Through Enhanced Financial Counseling Act, H.R. 1635, which provides annual financial counseling for student loan borrowers.
House Speaker Paul Ryan, R-Wis., said after the 406-4 vote that “college should be an opportunity for all those who want it. But with a complex federal financial aid system that provides little guidance to students, it’s often out of reach or leads to high student debt. Instead of this status quo, we should support students as they make decisions about how to finance their education and begin to repay their loans.”
With this bill, he continued, “students and parents enrolled in federal loan programs will receive yearly counseling tailored to their needs.”
The bill also extends these counseling services to recipients of Pell grants.
The bill, reintroduced by Reps. Brett Guthrie, R-Ky., chairman of the Higher Education and Workforce Development Subcommittee, and Suzanne Bonamici, D-Ore., amends, among other measures, the loan counseling requirements under the Higher Education Act of 1965.
In reintroducing the legislation, Bonamici said that for students receiving federal loans, financial counseling is currently only required at the beginning and end of their academic careers.
“Part of fixing the problem is ensuring that student borrowers grasp the extent of their financial obligations,” she said. “By requiring students to complete annual financial counseling when they accept federal student aid, we can help them better understand which financial options to draw from first and the implications of their future debt load and repayment scenarios.”
The legislation is designed to improve “the timing, frequency and content of financial counseling,” she added.