This bill would require an institution of higher education (IHE) that participates in federal student aid programs to require student borrowers to undergo financial counseling each year, rather than just entrance and exit counseling. Federal Pell Grant recipients and parent PLUS Loan borrowers would also be required to undergo annual counseling. Counseling would include comprehensive information on: terms, conditions, and responsibilities regarding a grant or loan; information on a typical student budget; the right to request an annual credit report; average income and employment data; and financial management resources.
Exit counseling information requirements would be revised and expanded to include: an outstanding loan balance summary; the anticipated monthly payments under standard and income-based repayment plans; an explanation of the grace period preceding repayment; the option to pay accrued interest before it capitalizes; the right to request an annual credit report; and loan servicer contact information.
The Dept. of Education would be required to maintain a consumer-tested online counseling tool that provides annual and exit counseling. The Institute of Education Sciences would be required to study the impact and effectiveness of exit counseling, annual counseling, and the online counseling tool.