Bipartisan legislation introduced by U.S. Sens. Cory Gardner (R-CO) and Dean Heller (R-NV) would provide counseling to students who receive financial aid to help promote smart decisions.
The Empowering Students Through Enhance Financial Counseling Act would ensure that students and parents who participate in the federal loan program receive interactive counseling each year that is tailored to individual financial situations.
“Student debt continues to negatively impact Coloradans and Americans across the country, and that’s why it’s important that students receiving federal financial aid have access to resources, including financial counseling, that will better inform their financial decisions prior to undertaking massive student loan debt,” Gardner said.
Americans currently owe more than $1.3 trillion in student loan debt, making it the leading source of non-housing debt.
“A high quality education provides students with the tools they need to succeed, and financial literacy is an essential component to achieving that success,” Gardner said. “I look forward to working with my colleagues on both sides of the aisle to advance this bipartisan proposal that provides institutions of higher education with the resources they need to expand educational opportunities.”
Under the bill, the secretary of education would be directed to maintain a consumer-tested, online counseling tool that enables institutions to provide loan counseling, exit counseling and Pell Grant counseling to borrowers on an annual basis.
“Recently, student loan debt rose to a record high of $1.35 trillion nationwide,” Heller said. “Now more than ever, it is critical to ensure that students are making smart decisions about financing their higher education. Navigating the student loan process can be complicated and confusing, and students deserve to have the tools they need to manage their loans in a responsible way.”
The measure would also require low-income students to be educated about the terms and conditions of the Pell Grant program each year.
U.S. Sens. Mark Warner (D-VA) and Tim Kaine (D-VA) also cosponsored the bill.