Bill · S. 1559· Senate(119-S-1559)
Know Before You Owe Federal Student Loan Act of 2025
- Introduced
- 5/1/2025
- Last activity
- 5/1/2025 — Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Sponsored by
- Chuck Grassley
- Cosponsors
- - 0 - 2
- Introduced
- In Committee
What this bill would do
The "Know Before You Owe Federal Student Loan Act of 2025" changes the rules for student loan counseling. It replaces "Entrance Counseling" with "Pre-Loan Counseling" and requires this counseling for the first disbursement of every new loan. Borrowers will receive more detailed financial estimates and warnings about debt-to-income ratios. Students must now manually enter the exact dollar amount they wish to borrow. Additionally, lenders must provide quarterly statements to borrowers during periods when payments are not required.
Yes· 3 of 16
Would students be better off under this?+9
Directly benefits students by providing an informed framework for borrowing and ongoing balance transparency.
Would people in their twenties and thirties be better off under this?+8
Provides critical financial guidance to students entering higher education to avoid debt traps.
Would households on low incomes be better off under this?+7
Protects low-income students from taking on unsustainable debt through debt-to-income warnings.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
-
Better Financial Planning: Section 2(2)(A) provides borrowers with an estimate of monthly payments compared to estimated monthly income after taxes, living expenses, and health insurance.
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Informed Borrowing: Section 2(2)(B) requires statements telling borrowers they can borrow the minimum amount necessary and do not have to accept the full loan amount.
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Debt Awareness: Section 2(2)(M) provides a warning that higher debt-to-income ratios make loan repayment more difficult.
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Alternative Funding Guidance: Section 2(2)(N) gives borrowers options to reduce borrowing through work-study, scholarships, or reduced expenses.
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Academic Planning: Section 2(2)(O) explains the importance of graduating on time and how adding a year of study increases total debt.
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Control Over Loan Amounts: Section 2(3)(A) requires students to manually enter the exact dollar amount of funding they want to borrow.
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Transparency During Non-Payment Periods: Section 3 requires lenders to send quarterly statements showing current balances, interest rates, and total interest paid when payments are not required.
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Interest Management: Section 3(7) and (9) explain the option to pay accruing interest and how small payments can offset interest accrual over the life of the loan.
Potential Negative Impacts for People
- No negative impacts for individuals or groups are explicitly mentioned in the provided text.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Students+9Good For Young Adults+8Good For Low Income Households+7Good For Middle Class Households+5Good For African Americans+3Good For Asian Americans+3Good For Hispanic Americans+3Good For Native Americans+3Good For White Americans+3
- Economy And Finance
- Improves Consumer Protection+7Improves Fiscal Responsibility+5Reduces National Debt+2Improves Economic Growth+1
- Governance And Ideology
- Improves Government Transparency+5
- Education And Technology
- Improves College Affordability+4
- Social Issues And Justice
- Improves Poverty Reduction+3
- 5/5/2025
- 1 Cosponsor added.
- 5/1/2025
- Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 1 Cosponsor added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Maggie HassanDemocrat · New Hampshire
Tina SmithDemocrat · Minnesota