UTAH — Rep. Ben McAdams has signed on to a bill that would require more transparent and simple disclosures to be provided when college students take out loans.
The Student Loan Disclosure Transparency Act of 2019 was sponsored by Florida Rep. Donna Shalala and is cosponsored by McAdams, Utah Rep. Chris Stewart and three others from various states.
“Students borrow to invest in their education and improve their economic future, not to end up with crushing debt. We can do a better job of helping students understand what they are taking on over the life of the loan, not just when they receive the money or start repaying it,” McAdams said in a press release.
The total amount of student debt was approximately $1.6 trillion in June, and the average 2019 graduate owed more than $30,000, according to McAdams.
McAdams said current student loan disclosures are unnecessarily long, complicated and unclear on how much will have to pay. He says 2/3 of students with loans express some misunderstanding or surprise.
The new act would require more simplified disclosures and terms, more frequent disclosures during the life of the loan, and projected payment estimates based on the amount a student has borrowed. Currently, lenders only need to send a disclosure when the loan is taken out, at or prior to repayment and during repayment status. The bill suggests monthly disclosures.
“This is a commonsense bill that provides for standards of disclosure that apply to other consumer loans and certainly should apply to the very first consumer loan many people take — their student loan,” McAdams said.