Seeking a way to better help American students fulfill their higher education goals and make sound financial decisions, U.S. Sens. Dean Heller (R-NV) and Cory Gardner (R-CO) on Monday introduced a bipartisan measure to provide financial counseling services to college and university students receiving federal financial aid.
The Empowering Students Through Enhanced Financial Counseling Act would require students and parents participating in the federal student loan program to receive interactive financial counseling. It would also counsel students and parents about the scope of their loan responsibilities and require their consent before they receive federal student loans.
“This legislation empowers Nevada’s students and Americans throughout the country with the tools needed to make well-informed, sound financial decisions related to their college and education,” said Sen. Heller. “It’s a positive step toward addressing student debt and preparing young students for a successful future.”
Typically, institutions of higher education counsel students who are first-time federal student loan borrowers. The bill would replace that introductory counseling with annual counseling. The bill would also require that low-income students receiving Pell Grants be counseled annually on the grant terms and conditions.
“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. “This bipartisan proposal will help tens of thousands of students better plan for their future.”
S. 2081 also would call for the U.S. Department of Education to develop an online counseling tool for higher-education institutions’ use in their annual loan and Pell Grant counseling, and their exit counseling for graduating students.
Higher education loan debt – with more than $1.45 trillion owed – is the largest category of non-housing debt in the United States, ahead of credit card and automobile loans, Heller’s office said.
Virginia Sens. Tim Kaine and Mark Warner, both Democrats, joined Heller and Gardner in introducing the bipartisan bill.
A companion bill, H.R. 1635, sponsored by Rep. Brett Guthrie (R-KY), is pending in the House. According to the House bill text, the Department of Education’s Institute of Education Sciences would study the impact and effectiveness of both exit and annual counseling and an online counseling tool.