The House recently passed through a bill that would require all federal student loan borrowers to participate in annual financial counseling.
The House passed a bill on Sept. 5 that would require all federal student loan and Pell Grant recipients to participate in annual financial counseling. The bill is known as the “Empowering Students Through Enhanced Financial Counseling Act.”
House Speaker Paul Ryan issued a statement saying that the bill will “support students as they make decisions about how to finance their education and begin to repay their loans.” He added that “students and parents enrolled in federal loan programs will receive yearly counseling tailored to their needs.”
The bill was introduced by Rep. Brett Guthrie, who serves as chairman of the Higher Education and Workforce Development Subcommittee, and Rep. Suzanne Bonamici. The bill amends the original loan counseling requirements in the Higher Education Act.
In the original legislation, financial counseling is only required at the beginning and end of a student’s academic journey. Bonamici said the new bill is designed to improve “the timing, frequency, and content of financial counseling.”
Bonamici added that mandatory financial counseling will give borrowers a better understanding of their options and help them understand the impact student loan debt will have on their future.
The bill does not attempt to reign in student borrowing but it does require that students receive financial aid counseling before accepting federal aid. Going forward, borrowers would be required to receive yearly financial aid counseling. The counseling sessions will be available online or in-person.
The bill also aims to improve the quality of the support students are receiving so they understand the responsibility of taking on student loan debt. And borrowers will be given information about income-driven repayment programs and other useful resources. The bill also directs the Department of Education to provide an online tool that will provide annual and exit counseling.
This bill is the latest attempt to address the growing problem with student loan debt in America. Currently, 44 million borrowers owe around $1.5 trillion in student loan debt. Republicans and Democrats have been strongly divided on how to approach this problem. But the final 406-4 vote indicates that this bill passed with strong bipartisan support. The bill moved on to the Senate for consideration.