Student Transparency for Understanding Decisions in Education Net Terms Act; STUDENT Act
Summary
H.R. 6134, the STUDENT Act, aims to amend the Higher Education Act of 1965. It mandates that lenders disclose the total interest paid over the life of certain federal student loans. This disclosure would be included with other loan information provided under section 433(a).
Expected Effects
The bill's passage would require lenders to provide borrowers with a clearer understanding of the total cost of their student loans. This enhanced transparency could influence borrowing decisions. It may also encourage borrowers to explore repayment options more diligently.
Potential Benefits
- Increased transparency regarding the total cost of student loans.
- Empowered borrowers to make more informed decisions about loan options.
- Potential for borrowers to better manage their finances and repayment strategies.
- May encourage borrowers to seek out lower-interest loans or alternative repayment plans.
- Could lead to a decrease in defaults due to a better understanding of long-term costs.
Most Benefited Areas:
Potential Disadvantages
- The disclosure requirement may add a slight administrative burden to lenders.
- The bill does not address the underlying issues of rising tuition costs or student debt.
- The impact on borrowing behavior may be limited if borrowers are primarily focused on immediate monthly payments.
- The effectiveness depends on borrowers understanding and utilizing the disclosed information.
- The bill only applies to certain federal student loans, potentially excluding some borrowers.
Constitutional Alignment
The bill falls under Congress's power to regulate commerce and provide for the general welfare, as outlined in Article I, Section 8 of the Constitution. Specifically, it relates to interstate commerce through the regulation of federal student loans. The bill does not appear to infringe upon any individual liberties or rights protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).