The state Senate has adopted legislation sponsored by Sen. Barbara Bailey, R-Oak Harbor to make student lending more transparent. Senate Bill 5022, known as the Student Loan Transparency Act, received unanimous support Tuesday evening and now moves to the House of Representatives for consideration.
“There are serious long-term effects of student debt,” said Bailey. “The more information that our college students have about their financing options the better. The Student Loan Transparency Act will help students make better decisions about their educational-financing needs.”
The legislation would require higher-education institutions to provide simple and concise information about the costs of borrowing when financial awards include loans. The notification must include an estimate of the:
- Total amount of student loans;
- Potential payoff amounts;
- Monthly repayment amounts, including principal and interest; and
- Percentage of federal-loan limits a student has reached.
“We made huge strides in tackling student debt when the Senate Majority Coalition Caucus cut college tuition,” said Bailey, who spearheaded the 2015 effort known as the College Affordability Program. “Now we can make sure there is more transparency in the real costs of college when students walk across that stage to get their diploma and have to start repaying their loans.”